The Role of a Broker of Record (BOR): Enhancing Insurance Productivity through AI, Data Insights, and Automation

12 min readOct 28, 2024

In the insurance world, a Broker of Record (BOR) serves as a critical intermediary between the insured (the client) and the insurer (the carrier). The BOR plays a key role in managing policies, negotiating terms, handling claims, and advocating for the client’s best interests. This blog will dive deep into the importance of the Broker of Record, the sequence of events in appointing a BOR, and how AI, data insights, and automation can enhance productivity, particularly from the insurer’s underwriting workstation.

What is a Broker of Record (BOR)?

A Broker of Record (BOR) is an insurance agent or agency that the policyholder formally designates to handle their insurance policies. This designation gives the broker exclusive authority to interact with the insurance carrier on behalf of the client. The BOR can negotiate terms, update coverage, and provide guidance, often replacing a previous broker.

Basic Sequence of Events in the BOR Process

1. Selection of a New Broker

The policyholder (individual or business) decides to work with a new broker who they believe is better suited to manage their insurance needs. The policyholder chooses a broker based on expertise, specialization, or better service offerings.

2. Broker of Record Letter (BOR Letter) Submission

The policyholder signs a Broker of Record Letter, officially transferring authority from their existing broker to the new broker. This document includes policy numbers, types of insurance, and other pertinent information that grants the new broker access to the policies. The BOR letter is submitted to the insurance carrier.

Broker of Record (BOR) Template

The Broker of Record (BOR) template is a standardized document that the policyholder (individual or business) completes to officially designate a new broker to handle their insurance policies. This document grants the new broker exclusive rights to manage the policy and communicate with the insurer on behalf of the policyholder. The template can vary by insurer, but the core elements are generally consistent.

Components of a BOR Template:

Policyholder Information: Name of the individual or business, contact information, and policyholder identification (if applicable).
Policy Details: List of all insurance policies being transferred, including policy numbers, types of coverage, and expiration dates.
Current Broker Information: Name and contact information of the outgoing broker.
New Broker Information: Name, contact details, and agency information of the new broker. This section may also include the broker’s license number and other regulatory identifiers, depending on state or industry requirements.
Authorization Statement: A formal statement by the policyholder authorizing the new broker to take over representation and requesting the insurer to transfer authority to the new broker.
Signature Section: Policyholder’s signature and date to validate the request. Some templates also require the signature of the new broker.

Example BOR Template

[Date]

To Whom It May Concern,

I, [Policyholder’s Full Name], the policyholder of the insurance policies listed below, hereby designate [New Broker’s Full Name and Agency] as my new Broker of Record, effective immediately. I authorize [New Broker’s Agency Name] to have exclusive access to all policy information and the right to manage my policies on my behalf.

Policyholder: [Full Name]
Policy Number(s): [Policy Number 1, Policy Number 2, etc.]
Insurance Type(s): [Type of Insurance]
Current Broker: [Outgoing Broker’s Full Name and Agency]

New Broker:
   - Name: [New Broker’s Full Name]
   - Agency: [New Broker’s Agency Name]
   - Contact Information: [Email, Phone Number, Address]

Thank you for your assistance in facilitating this change.

Sincerely,

[Policyholder’s Signature]
[Policyholder’s Printed Name]
[Date]

3. Notification to the Current Broker

Once the insurance company receives the BOR letter, they notify the current broker that their authority has been rescinded. The outgoing broker will no longer have access to the policy details or renewal information unless there are specific contractual obligations that allow otherwise.

Broker of Record Notification Letter

The Broker of Record Notification Letter is sent by the insurer to inform the outgoing broker of the change. This notification ensures transparency and allows the outgoing broker to release any remaining rights or responsibilities related to the policy. The notification letter can be generated automatically by the insurer’s underwriting workstation upon receiving and processing the BOR letter.

Components of a BOR Notification Letter

Insurer’s Contact Information: Details of the insurer, including name, address, and relevant contact information.
Date of Notification: The date the notification is sent.
Outgoing Broker’s Information: Name and contact information of the outgoing broker.
Policyholder Information: Name and policy details of the policyholder initiating the change.
New Broker Information: Contact details of the new broker who is taking over.
Effective Date: The date when the new broker assumes authority over the policies.
Acknowledgment of Rights Transfer: A statement acknowledging the outgoing broker’s loss of authority and clarifying the new broker’s role.

Example BOR Notification Letter

[Date]

[Outgoing Broker’s Full Name]
[Outgoing Broker’s Agency Name]
[Agency Address]
[City, State, ZIP]

Dear [Outgoing Broker’s Name],

This letter is to inform you that we have received a Broker of Record (BOR) letter from [Policyholder’s Full Name] designating [New Broker’s Full Name and Agency] as their new Broker of Record. Effective [Effective Date], [New Broker’s Full Name] will have exclusive rights to manage the following policy(ies):

   - Policy Number(s): [Policy Number 1, Policy Number 2, etc.]
   - Type of Insurance: [Type of Insurance]

As of the effective date, you will no longer have access to policy information, renewal information, or the authority to make changes on behalf of the policyholder. We appreciate your service to [Policyholder’s Full Name] and look forward to ensuring a smooth transition to their newly appointed broker.

Thank you for your attention to this matter.

Sincerely,

[Insurer Representative’s Signature]
[Insurer Representative’s Printed Name]
[Insurer’s Company Name]
[Contact Information]

4. Transfer of Rights

The new Broker of Record officially assumes responsibility for managing the client’s policies. This includes all communication with the insurer regarding underwriting, claims, and policy renewals.

5. Policy Management by the New BOR

The new BOR starts working with the insurer to adjust or maintain the policies as needed. They might negotiate better premiums, update coverage, or handle claims on behalf of the policyholder.

Purpose and Importance of BOR Template and Notification Letters

Authorization and Record-Keeping: The BOR template serves as an official record of the policyholder’s intent to change brokers. Both documents provide legal documentation for the change in representation, reducing the potential for disputes.
Transparency and Communication: The notification letter formally informs the outgoing broker of the transition, ensuring that all parties involved are aware of the change and can plan accordingly.
Efficient Transition: These documents facilitate a smooth transfer process by clearly outlining the effective date and the policies involved, reducing administrative confusion.
Compliance and Workflow Automation: From an insurer’s perspective, these documents support regulatory compliance and can be easily integrated into an automated workflow in the underwriting workstation. AI tools can help automate document validation, policy updates, and notifications, improving productivity.

These templates are crucial in maintaining an orderly and transparent process in the insurance industry, ensuring that both the client and insurer can rely on a secure and documented transfer of responsibilities.

BOR Grace Period

The BOR grace period is the time frame between the submission of a Broker of Record (BOR) letter by the policyholder and the date when the new broker officially assumes full authority over the policy. This period is typically established to give the outgoing broker an opportunity to address any final obligations and, in some cases, to contest the transfer if they believe it was submitted erroneously or in violation of contractual agreements.

Purpose of the BOR Grace Period

Allows Outgoing Broker to Respond: The outgoing broker has a chance to communicate with the policyholder and, in some cases, attempt to retain the account.
Ensures Compliance: Some insurers and brokers have service agreements that mandate specific periods for notification and transition.
Supports Error Correction: If there was an error in submitting the BOR, the grace period allows time to correct it before transferring control.

Typical Duration of the BOR Grace Period

The grace period usually lasts anywhere from 3 to 10 days, although it may vary by insurer or specific contractual obligations. It is intended to give a fair opportunity for all parties to address the transition.

Handling the BOR Grace Period

Notification Process: Once the insurer receives the BOR letter, the outgoing broker is notified and informed of the grace period. During this time, they may clarify with the client or insurer if any issues arise.
Workstation Management: The underwriting workstation tracks the grace period as part of the BOR workflow, marking it as “pending” until the period ends.
Transition Checks: Once the grace period expires, the new broker takes over, and permissions are updated within the insurer’s system, officially closing access for the outgoing broker.

In some underwriting workstations, AI and automation can be used to track the grace period and send reminders to ensure timely transitions. This minimizes manual follow-ups and provides transparency to both the outgoing and new broker.

BOR Countdown

The BOR countdown is a timer or countdown mechanism that tracks the time remaining in the BOR grace period, helping ensure that all parties are aware of when the new Broker of Record will officially assume responsibility.

How the BOR Countdown Works

Initiation: When the insurer receives the BOR letter, the countdown is automatically started, often displayed within the underwriting workstation for easy tracking.
Notifications and Reminders: Automated notifications can be sent to the insurer’s team and the brokers involved, updating them on how much time is left in the grace period.
Final Transfer: Once the countdown reaches zero, the underwriting system officially changes the Broker of Record, transferring all access and responsibilities to the new broker.

Using Automation for the BOR Countdown

Automated Alerts: AI and automated workflows can trigger alerts at key intervals in the countdown, such as a 48-hour or 24-hour reminder before the countdown ends. These reminders help insurers, brokers, and clients stay on top of the transition timeline.
Automatic Role Transition: At the end of the countdown, the system automatically updates the broker’s role in the system, transferring control to the new broker without manual intervention.

Example of a BOR Countdown and Grace Period Workflow

Day 1 — Submission of BOR Letter: The policyholder submits a BOR letter to the insurer. The grace period is set, typically for 5 days.
Day 2 — Notification to Outgoing Broker: The insurer notifies the outgoing broker, starting the countdown for the grace period.
Day 3–4 — Grace Period Active: Both the outgoing broker and the policyholder have time to clarify any issues or objections.
Day 5 — Countdown Ends: At the end of Day 5, if no objections have been raised, the countdown timer reaches zero. The underwriting workstation automatically transfers authority to the new Broker of Record, and the outgoing broker’s access is revoked.
Day 6 — New Broker’s Full Access: The new broker now has full authority to manage the policy and communicate directly with the insurer.

Benefits of the BOR Grace Period and Countdown in Insurance

Structured and Transparent Transition: By implementing a clear grace period and countdown, insurers and brokers reduce the risk of miscommunication and ensure that transitions are smooth and organized.
Compliance Assurance: The grace period respects contractual obligations and industry best practices, giving the outgoing broker a fair opportunity to address the change.
Enhanced Productivity with Automation: By using AI and automation to track and manage the countdown, insurers reduce manual oversight and ensure that BOR transitions happen seamlessly.

The BOR grace period and BOR countdown are essential components of managing Broker of Record changes. They provide a structured timeline that protects the rights of all parties, allows for any necessary adjustments, and ensures that the transition process is handled smoothly. For insurers, having an underwriting workstation equipped with automation, notifications, and AI-driven tracking can significantly improve efficiency, reduce errors, and enhance productivity in managing BOR transitions.

Example Scenario

Imagine a mid-sized retail business with a complex insurance portfolio that includes property, liability, and cyber insurance. The business feels that its current broker is not responsive enough, especially as they’ve had issues with cyber claims. After some research, the company decides to appoint a new broker with cyber expertise.

The company signs a BOR Letter and submits it to the insurer, transferring authority to the new broker. The new broker reviews the business’s existing coverage, negotiates improved cyber coverage, and ensures more responsive service during claims. The insurer updates their system to reflect the new Broker of Record, and all future policy communications go through this new broker.

Importance of a Broker of Record from the Insurer’s Perspective

For insurers, a Broker of Record simplifies the management of policies by consolidating communication and policy requests through a single point of contact. This not only streamlines operations but also allows for more consistent and accurate service delivery.

BOR Workflow in the Underwriting Workstation

From an underwriting perspective, the insurer’s workstation must handle the Broker of Record efficiently, automating tasks where possible to reduce errors and improve productivity. Here’s how the BOR process is handled from an underwriting workstation perspective:

1. Receipt and Validation of the BOR Letter

Once the BOR letter is received, the insurer’s underwriting workstation validates the policyholder’s details, policy numbers, and broker information. This can be automated to quickly verify the authenticity of the letter and the broker’s credentials.

2. Notification to the Outgoing Broker

The underwriting workstation triggers automated notifications to the outgoing broker, informing them that they no longer have access to the client’s policies. This helps ensure transparency and smooth transitions between brokers.

3. Policy Transfer to the New Broker

The underwriting team then reassigns policy control to the new Broker of Record. In the workstation, this involves updating system permissions and transferring all relevant policy information to the new broker.

4. Policy Review and Adjustments

At this point, the new broker may request policy modifications or adjustments based on the policyholder’s needs. This process often involves negotiating terms, rates, and coverage with the underwriter, a process that can be streamlined using AI and automation.

5. Workflow Automation and Document Management

All associated documents — policy updates, endorsements, and renewal notices — are managed and generated within the underwriting workstation. Automated workflows ensure that critical documents are sent to the new broker in a timely manner, reducing manual intervention and improving turnaround times.

Leveraging AI, Data Insights, and Automation to Improve BOR Processes

With the growing complexity of insurance policies and market demands, insurers can greatly enhance productivity in the Broker of Record process using AI, data insights, and automation.

1. AI-Driven Document Processing

AI can be used to scan and process BOR letters upon submission, automatically extracting key data such as policyholder information, policy numbers, and broker credentials. This reduces the need for manual data entry and ensures that records are accurately updated in the system.

2. Predictive Analytics for Policy Optimization

AI and data insights can help the new Broker of Record analyze the policyholder’s risk profile and coverage history. Based on this data, the AI-driven platform can recommend optimal changes in coverage, such as adjusting liability limits or suggesting cyber insurance enhancements. This gives the BOR valuable insights to negotiate more favorable terms with the insurer, thus improving client satisfaction.

3. Automated Broker Transitions

Automation can streamline the process of transitioning from the outgoing broker to the new BOR. By setting up predefined workflows in the underwriting workstation, the system can automatically notify brokers, update permissions, and transfer policy documents. This reduces delays and eliminates manual follow-ups, ensuring a seamless experience for the policyholder and both brokers.

4. Enhanced Data Sharing for Underwriting

The insurer’s underwriting team can use AI-driven data insights to better understand the risks associated with the policyholder’s business. This information can be shared with the new broker, enabling them to adjust policy details accordingly. For instance, AI might flag that a client’s industry is seeing a rise in certain claims (e.g., cyber incidents in retail), helping the BOR and underwriter adjust the policy accordingly.

5. Workflow Automation for Claims and Renewals

The workstation’s workflow automation can manage future claims and renewals on behalf of the BOR. Once the BOR is established, AI and automation tools can ensure that policy renewals are automatically flagged for review, and claims are routed to the appropriate parties. This ensures that the client and broker are proactively managed without unnecessary manual intervention.

6. AI-Powered Reporting and Insights

Insurers can use AI to generate detailed reports on the performance of brokers, including their success in retaining clients, improving premium negotiations, or managing claims. These insights can be shared with brokers to improve performance or identify training opportunities.

How AI and Automation Benefit Brokers and Insurers

For brokers, AI and automation provide valuable tools for improving service levels, speeding up claims processes, and optimizing policyholder risk profiles. With AI-powered data insights, brokers can gain a clearer understanding of market trends and provide tailored advice to clients.

For insurers, AI and automation in the underwriting workstation reduce administrative overhead, eliminate errors in broker transitions, and ensure compliance with industry regulations. With AI handling the majority of repetitive tasks, underwriting teams can focus on higher-value activities like policy customization and client relationship management.

Conclusion

The Broker of Record plays a vital role in the insurance ecosystem, acting as the primary advocate for the client while managing the relationship with the insurer. For insurers, managing BOR transitions efficiently within the underwriting workstation is critical to ensuring smooth operations and maintaining client satisfaction. By leveraging AI, data insights, and automation, insurers can streamline the BOR process, reduce manual work, and enhance overall productivity. These technological advancements not only simplify the Broker of Record workflow but also allow brokers to offer better service and deliver superior outcomes for their clients.