AAMGA Leaders See Bright Future

By Mark E. Ruquet

NU Online News Service, May 21, 2:23 p.m. EDT, Phoenix,Ariz.?Managing general agents today are in the strongestposition they have ever been, and their position with insurers andretail agents should continue to be strong despite any marketplacesoftening, the leaders of an MGA association said.[@@]

That analysis came from the officers of the American Associationof Managing General Agents during a press conference at the King ofPrussia, Pa.-based group's annual meeting here.

"I've been an MGA for over 30 years. I've seen hard markets andsoft markets, and the MGAs today are in the strongest position thatI can recall, in any hard market or soft market," said Ronnie C.Moore, whose term as AAMGA president is expiring. Mr. Moore ispresident of The Southern General Agency Inc., in Bowling Green,Ky.

When it comes to the placement of difficult business, more oftenit is to MGAs that agents turn for help, and the professionals arefinding those markets, said Joseph P. Hutelmyer, incoming presidentof AAMGA and president of Seaboard Underwriters Inc., inBurlington, N.C.

"We have a lot to offer," said Mr. Hutelmyer, adding that thosein the association must meet some very tough business standards inorder to become members.

Echoing his comments in a speech made earlier in the day at theassociation's opening session, Mr. Moore said that being an AAMGAmember is equivalent to the Good Housekeeping Seal of Approval andshould be regarded that way. He promoted the idea that a member ofthe association should be identified with quality that says, "Weare the best."

Discussing their marketplace, AAMGA leadership said they see amoderation that will lead to long-term stability. Mr. Hutelmyersaid he believes the market will be stable for the next 15-to-18months.

Anthony R. Glotzbach, president of United Brokers Insurance inNew Albany, Ind., and chairman of the AAMGA Communication'sCommittee, said that technology has also lent itself to keepingbusiness profitable.

"With the information systems that exist between the insurancecompanies and the MGA's, we no longer have to wait six months or 12months for feedback on how we are doing," he said.

"Today, there exist information systems that allow you to tweaka particular program or product in a more gradual manner thateliminates the spikes and the unsettling, knee jerk reactions wehave experienced in the past. I think that is very positive for allof our customers."

Mr. Hutelmyer noted also that the technology revolution isdriving underwriters to ask for more information and to look formore information to understand risks.

"We are seeing the advent of a new paradigm," said Bernard G.Heinze, AAMGA's executive director. "Companies and managing generalagents are partnering and cooperating with one another [as theyhave never done in the past]. As we have heard from some CEO's, tosee what their wants and needs are, it gives us the opportunitiesto let them see what we can produce.

"There is an educational process that lets us see what it isexactly that they need in order to do business," he noted.

When asked about whether companies were seeking to add moreMGA's to their rosters, the officials said that as long as they areproducing profitable business for the companies they would not belooking elsewhere for representatives.

"We feel that as long as we are writing profitable business theyare not going to be adding on," said Mr. Moore.

Mr. Hutelmyer said that while profitability drives companydecisions, especially on the program side, he did not believecompanies are in a position to add on more representatives.

"There may be some more new programs, but I think they will belimited," he said. "I don't think there will be a masssign-on."

"I think you have a situation where there is a lot more supply,"observed Mr. Glotzbach. "I think there are a lot more people whowant to be MGA's than there are companies who could possibly meettheir expectations.

"It moves the bar up another notch," he continued. "In order tosurvive today, you have to be very, very good."