“Wholesale-nomics” White Paper Analyzes Value and Economics of Wholesale Brokerage Model

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White paper published by NAPCO shows how wholesale brokers add tremendous value to a placement team without adding to the cost

NAPCO, a wholesale broker specializing in catastrophic property coverage, has published a white paper analyzing the role of wholesale brokers and the value they bring when working as a team with retail brokers and their insureds. The paper was authored by NAPCO CEO David Pagoumian.

The paper, “Wholesale-nomics,” available at http://www.NAPCOLLC.com, suggests that retail brokers can improve their retention of existing clients, and compete more effectively for new ones, by introducing a wholesale insurance broker into the client relationship. It also describes how the compensation model of wholesale brokers does not increase costs.

The belief by some retail agents and brokers that they can reduce costs by eliminating the wholesaler is both misleading to the buyer and out of touch with today’s marketing realities, the paper states.

“One only needs to look under the hood of a program and brokerage relationship to see if an intermediary is truly adding to the cost or—more importantly—adding to the value,” Pagoumian says. “Those wholesale brokers who create client-relevant excellence through competitive pricing, coverage optimization and service enhancements add tremendous value to a placement team without adding to the cost.”

According to the paper, wholesale brokers bring value to both carriers and insureds:

  • For insureds, the additional market access offered by a wholesale broker provides greater pricing leverage. The result is premium savings for the insured.
  • For carriers, by relying on wholesalers, they avoid the cost of operating a large retail network and can be more productive and efficient because of the targeting of their appetite and quality of risk data.

Wholesale brokers that employ best policies and practices earn a role on the placement team through their use of structured data analysis and market intelligence, according to the paper. By establishing the right wholesale partnership, the paper concludes, retail brokers will find that they can meet more of their client’s and prospect’s needs.

NAPCO is a leading wholesale broker of commercial property and casualty insurance coverage. The company provides retail agents and brokers with an efficient, single-source independent marketing arm for difficult placements that have significant property and casualty exposure. NAPCO utilizes in-depth research and sophisticated risk modeling to implement coverage and cost-effective programs for its clients. Headquartered in Iselin, N.J., NAPCO provides access to the global insurance market, including major and specialty domestic carriers, excess and surplus lines markets, re-insurers and international providers of capacity.


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Gary Kimball
Kimball Communications
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