For Calvin Smith (pictured), owner of Active Underwriters, being successful is all about adapting to changes and staying nimble.
“As a wholesale broker, we frequently have to deal with changes,” he told Insurance Business. “There are always shifts in the markets, fluctuations in the economy, and disruptions due to certain catastrophes. It all trickles down, and we’re affected quite often.”
As Smith told IB, it’s not about the size of the challenges wholesale brokers are facing, it’s about accommodating those changes. And with insurers facing reinsurance challenges and sometimes narrowing their underwriting appetites, brokers must act quickly.
“It’s our job to seek out and find other markets that will consider writing that business,” Smith said. “Staying current on industry news and having discussions with other insurance professionals is key to how we handle it.”
One immediate concern for wholesale brokers here is the impact of tariffs on cross-border trucking. On Feb. 1, the US government announced new tariffs on Canada – going into effect on March 4. And while the sector is yet to see the true impact of these new levies, many brokers are understandably worried. Smith, however, remains cautiously optimistic – for the time being.
“Most of the truckers we work with are based in the US,” he said. “Those tariffs could trickle down and impact the trucking industry, I’m just not sure how quickly. If the US receives fewer shipments from overseas, it might slow things down, but it’s still unclear what that will look like.”
As the insurance market hardens, securing coverage for high-risk industries like construction and trucking is becoming increasingly difficult – with Smith emphasizing the role of wholesale brokers in filling the gap left by direct carriers.
“It’s getting increasingly difficult for retail agents to place business with their direct markets, which is where we come in as a wholesale broker,” he told IB. “Clients with distinct coverage requirements or specific trades that are deemed adverse by direct markets – that’s where we come in. It’s all about having efficient communication with your retail agents and carriers.”
The transportation sector, in particular, is seeing increased complexity. One aspect Smith pointed to in the transportation industry is the breaking out of lines of business.
“A commercial auto package policy may include multiple lines of business. In some cases, breaking out these lines individually can help reduce the insured’s premium and prevent significant increases at renewal.”
Beyond trucking and construction, Smith is open to expanding into specialized industries but remains strategic about how he identifies opportunities.
“If you want to expand outside of your specialty, there should be a market for it,” he said. “For me, I run a small agency with very few employees, so my best way to find out where to expand is through open communication with retail agents. They will tell you where they need help and where they’re having trouble placing business, you just need to ask them.”
“Competing companies may have dozens of carriers writing the same class of business, but larger firms might overlook areas with growth potential,” Smith said. “That’s where strong communication with retail agents becomes essential.”
Looking ahead, one thing is certain for wholesale brokers – that change is the only constant here. Technology will continue to challenge and innovate the sector, with more and more businesses opting to invest heavily in generative AI. However, the debate around how much generative AI should be used to automate the insurance process is still very much up for debate. In fact, research from Duck Creek Technologies found that 44% of consumers would prefer to interact with a human – up from 35% in 2022.
Smith, for his part, isn’t quite ready to give up the human touch in his firm.
“We’re a mom and pop shop,” he told IB. “Retailers like that about us. In a day and age where everything's automated, retail agents may not know who to reach out to when they need help. There’s the underwriter, the accountant, the auditor, etc. and a lot can get lost in translation.
“I know there's companies that do it very well, but there's also a certain type of agent who likes to pick up the phone and get in contact with their underwriter directly. That's where we come in. That being said, as for streamlining processes, I'm all about it. I just haven't found a good automated system that provides the service that we're striving for.”
