Ties that bind: in this market, brokers should not be selling products, but meeting clients' needs.

Recently, the story goes, an extremely dictatorial and highly unpopular, yet influential regional broker passed away. Two colleagues of the deceased decided to attend the funeral services. Upon arrival, they noticed the funeral home was packed and a waiting line had formed at the sidewalk enutrance. As they joined the long line, one broker said to the other, "Look at all of these people. While he was living no one could stand the man. Why are they here now that he is dead?" The other replied, "Give the people what they want and they will show up." While this story may not be true, it does exemplify the need for providing clients with what they want in our industry. Nowhere is it truer than in the broker-client relationship.

We are in a changing, dynamic marketplace. Brokerage firms have become more competitive and more driven to exceed expected returns. They have been scrutinized more closely by government agencies and continue to walk the tightrope between carrier and client. While recognizing this situation, the risk management community continues to call for more service, at competitive (read, reduced) prices and more importantly, a better understanding of their particular company needs. No longer can customers be thought of along the lines of the legendary ET. Barnum. The risk manager today is better informed, more involved, uses technology as a resource and remains "always right." The growing concern for brokers is if you do not give the customers what they want, then they'll go to the competition--or, increasingly, do it for themselves. Today, brokers should not be selling products, but meeting needs.

One of the ways brokers can better understand and meet the needs of the client is by developing a Quality Improvement Process similar to the one established by the Risk and Insurance Management Society. The QIP provides performance expectations for not only the broker to the client but from the client back to the broker. The process can help both the broker and the customer to become focused, innovative, fiscally prudent and strategic. It can help build time lines, action plans and accountability as agreed upon by both parties. The QIP and similar process metrics are currently being used by several Fortune 500 companies and even several midsize companies. But a well-working set of measurables alone is not the sole answer for building the client-broker bond. Fostering trust is an integral part of the relationship.

Trust is a two-way street with no traffic cop. If a broker pushes or drives only services and capabilities down the street at the client, it will not build trust, Clients tend to be wary and weary of the I-can-meet-your-every-need pitch. Instead, if the broker can show where specific value can be provided or gaps can be filled, this builds trust. The client, too, must not micromanage the broker to death, for that will surely defeat trust. If the clients open up and let the broker know their goals and how their company views risk management, the broker can then respond to assist the risk manager and the company. Trust has been and will remain built over time both in the office and out.

As the marketplace evolves, more corporations will embrace risk management as a vital core competency in their strategic management thinking. They will try to gain a competitive advantage by touting risk-management practices and procedures that their competition may not have attained. The practice of risk management will soon be demonstrated and understood by all divisions and departments across the company. In essence, risk management will continue to become more ingrained in the very fabric of the business-thought process so that it will become automatic for management to say, "What are the risks and what does risk management think about this?"

The "Age of Risk" that has descended upon the marketplace has forced risk-management professionals to hone their leadership and enterprise-risk-management skills. They will continue to move from middle management to upper management. They will enjoy more face time with the chief executive officer, the chief financial officer, board members and the corporate decision makers, but only if they are willing to stretch themselves professionally, as well as their key partners, especially their brokers. The future risk-management professional will be prepared to gain a better foothold in the decision-making process that shapes his or her company or organization. The future holds great promise and challenges for the broker and the risk-management professional. It is incumbent upon the savvy broker to anticipate the needs of the risk-management professional and provide the resources, tools and relationship for success.

Lance Ewing, a Best's Review columnist, is vice president, risk management, for Caesars Entertainment, and RIMS president 2003-2004. He can be reached at [e-mail].