With plans canceled for its traditional RISExpo at the convention center in San Marcos, the Independent Insurance Agents of Texas moved its seminars to a virtual platform over two days in early October, switching the event’s name to RISE Virtual Summit. The statewide RISE meeting was formerly the IIAT Small Agency Conference, changing names in 2020 to encourage small and medium sized agencies to embrace available tools for growth. RISE stands for Relevant Insights for Strategic Execution.
Missing out on the expo part of the experience, where agents could explore new market experiences with representatives of top carriers, MGAs and brokerage services in an exhibit hall, RISE Virtual Summit offered an hour conversation with Teri Martin, Amwins Brokerage, to explore ways the wholesale segment serves the retail agent.
Martin, who has been in the insurance business for nearly 40 years, is currently a broker specializing in directors and officers’ liability, employment practices liability, E&O, cyber liability and allied medical malpractice. IIAT’s Gunnar Kephart, E&O specialist with IIAT Advantage, facilitated the dialogue with Martin.
Despite the title of the session, How MGAs Can Work for You, Martin distinguished between the services that MGAs and brokers provide, even though much of her advice on developing relationships applies to both segments of the wholesale industry.
“The MGA has the pen on behalf of the insurer,” said Martin. MGAs can underwrite, quote and bind. The broker, said Martin, has a more unlimited market and can provide agents a number of markets to work with. Both wholesale entities broaden the scope of independent agents that work in all coverage lines.
Basically, MGAs are wholesale brokers that take on many jobs normally done by the insurer, such as underwriting and pricing, binding coverage and settling claims. MGAs may have only one insurer or specialize in a program. The broader insurance broker advises customers on their insurance needs and negotiates with multiple insurers on their behalf to get them the most appropriate coverage. Regardless, the insurance risk stays with the insurer, not the MGA or broker.
Kephart characterized the relationship between the independent agent and the wholesaler as between a generalist and a specialist. Wholesalers offer expertise in a particular area and they offer agents increased market access.
Martin said agents who think of the broker as an extension of the agency’s marketing department form the best relationships. “If I work with an underwriter every day, we have that relationship and trust.” Agents can use the broker’s clout in the market, which is greater than they can do on their own.
Kephart added that MGAs and brokers help agents penetrate a market by providing specialist services geared to the insured’s needs.
Brokers are especially helpful with newer coverages that agents might not be thoroughly familiar with. Brokers who are cyber specialists or D&O experts, said Martin, can talk to the insured about coverages, and the agent can get a professional proposal to deliver to his client. The retail client gains comfort, said Kephart. Clients want to know there is expertise for getting robust coverage, said Martin.
Nowadays, said Martin, cyber coverage is moving to stand alone policies where the client gets good risk management included in the policy. Martin added that coverages vary by carrier and it is important to read every word of the policy.
There have never been standardized forms in the wholesale market, said Martin, coverages are determined through negotiation. Kephart commented that admitted companies are no longer required to file forms for some commercial coverage, thus inching them away from standardized forms.
Martin, who got her start in the industry with a retail agency, cautioned agents not to be afraid to ask their client questions. She recalled an early experience as a retail agent where she skipped over the question of “Is there a swimming pool?” because she assumed the manufacturer’s answer would be “No.” She learned of the pool through the inspector, and the risk changed.
Kephart said it is important to know the history of an account for at least five years. Automatic renewals become an agent’s E&O exposure. He said he has seen many E&O claims due to endorsements not being attached at renewal. Martin agreed.
Renewals are your best and worst friends, she said. While it takes some of the work out, the agent and the broker need to have knowledge of changes. Martin said this is especially true of IT accounts.
With changes in the market, Martin said Amwins underwrites at renewal. Premiums fluctuate. Moving from one insurer to another, she said, can remove an endorsement, so it is important to check carefully.
Martin told agents that when they submit an application for umbrella coverage, the broker needs to see the primary coverage. “If primary has an exclusion, the umbrella has an exclusion.” Brokers, she said, are familiar with exclusions and “can be your best partner.”
Regardless of the coverage an agent seeks through the broker, Martin said, “the broker comes with a second set of eyes and additional clout to get as broad of coverage as possible.” She urged agents to form relationships with the broker and communicate well with them. Over time, “I know what I need from you, and you learn what I need.” Whether it is loss runs, specialty endorsements, risk management, additional named insured, Martin said it is best to “do it right up front. If we have to communicate six to 10 times to get an account bound, we have all lost money.”
Recordings of this session and the other three sessions conducted during the RISE Virtual Summit on Oct. 5 and 7 are available on the IIAT website.