Insurance Brokers (MMC, AON, AJG, WTW, BRO)

[UK]

16 minutes ago, dealraker said:

UK, anything you write is fair, I've seen it for a long time.

 

The answer begins with...it wasn't too long ago that we had a family member die and I was the person chosen to handle the trust.  I posted about that....that I bought some  AJG (this wasn't long ago) at $185 per share.  I put more though into Berkshire.  Someone asked me on this forum why I didn't put more into AJG vs Berk and I rambled some crazy response, but it was of course very likely a poor decision not to buy more AJG.

 

But price and time, and industry conditions, have changed.  Today I'd not invest in AJG at this valuation level.  Would this investment if done today likey outperform Mr. Market, the question most ask that I never consider?   Probably.

 

I'd wait, it seems we are somewhat too excited and happy right now as to this sector.  Won't last.  

 

 

 

 

Thank you for answering!

[dwy000]

I tend to agree with the transparency argument.  While complexity and customization is definitely a factor, in other industries most outsized broker or agency rates have come down due to transparency (as well as the internet taking away information advantage).  When you buy or sell a house, you know exactly how much you're getting for the house and how much the broker is getting.  When you buy a stock, bond or option, you know exactly how much the stock costs and how much the commission is (often free now!).  But when you buy insurance, all you see is the premium(s).  You have no idea how much of that is true underwriting risk, how much is administration and how much is commission.  If they were forced to break out those numbers in your premium it would be too easy to go to another broker and say "beat this price" and they could do it with the exact same underwriter.  I can't see a circumstance where anyone (other than the customer) wants to have that level of transparency and kill the golden goose.  So maybe the anomaly continues for the indefinite future.

[73 Reds]

4 minutes ago, dwy000 said:

I tend to agree with the transparency argument.  While complexity and customization is definitely a factor, in other industries most outsized broker or agency rates have come down due to transparency (as well as the internet taking away information advantage).  When you buy or sell a house, you know exactly how much you're getting for the house and how much the broker is getting.  When you buy a stock, bond or option, you know exactly how much the stock costs and how much the commission is (often free now!).  But when you buy insurance, all you see is the premium(s).  You have no idea how much of that is true underwriting risk, how much is administration and how much is commission.  If they were forced to break out those numbers in your premium it would be too easy to go to another broker and say "beat this price" and they could do it with the exact same underwriter.  I can't see a circumstance where anyone (other than the customer) wants to have that level of transparency and kill the golden goose.  So maybe the anomaly continues for the indefinite future.

Back in the day OTC stock commissions were hidden in the "spread".  And frankly, its not that different than going to your doctor and then getting a bill for the "uninsured" portion.