BUILDING good relationships among insurance carriers, MGAs andretail agents was the focus of a panel discussion at the NAPSLOannual meeting, which took place in September in Orlando, Fla. MarkWells, publisher of Insurance Journal, was the moderator of thediscussion, which featured three panelists: Steve Brown, presidentof the Hoffman Brown Co. in Sherman Oaks, Calif.; Brad Dickler,president of the Essex Insurance Co. in Glen Allen, Va.; andMichael J. Warfield, president of U.S. Risk Underwriters in Dallas,Texas. Each panelist delivered an opening comment and then answereda few questions from Mr. Wells and some audience members. An editedtranscript of the session follows.

Steve Brown: What I really sell as a retailagent is my ability to build relationships. This is true whetherI'm working with my clients or with wholesalers and carriers. Themost successful relationships we've had at each end of thetransaction are those in which the people we work with share thisunderstanding of the importance of building relationships.

We feel that a strong relationship has four essentialcomponents:

-Trust. The wholesalers we work with know more abouttheir products than we do. In effect, they are storing knowledge oftheir products for us. When we sell coverage, we have to trust thatour wholesalers' goal is to provide only the best products for ourclient. If we don't have that trust, it's difficult for us toprovide a product from a particular wholesaler.

-Responsiveness. One of our selling points to ourclients is that we respond quickly to our clients' questions. We'reable to make this claim only when our wholesalers respond quicklyto our requests.

-Clarity. The marketplace is constantly changing, andinsurance policies consistently grow more complex. Our wholesalersare the experts in the coverage they provide. When our companiesand wholesalers are clear in answering our questions, we can giveour clients the correct answers to theirs.

-Partnership. We don't simply flood the market withapplications. In fact, we work with only five wholesalers, whichhelps us build a real sense of partnership with them. We see thischoice as our responsibility to our clients. The process of issuingpolicies is wrought with potential problems, which always seem tosurface at just the wrong time. Our partnership with ourwholesalers helps us solve such problems more quickly.

The leadership of any organization is ultimately responsible forbuilding this relationship-centered attitude. The approach that theleader takes is the approach that will filter down through everyemployee-and it might take just one person in the chain to destroythe relationship.

Michael Warfield: For the past year, we havefocused on building good relationships by ensuring we're a good fitwith our partners and by maintaining a high level ofinteraction.

We represent about 30 carriers through our brokerage operationsand about 20 carriers as an MGA. On both sides of our operation,our goal is to interact with each company-and I mean other thanwhen we're submitting business-once or twice a year. Forprospective carriers-and we estimate there are approximately 60 to70 we might want to interact with in the future-we simply want tomaintain a presence. We monitor these carriers' comments andactions for indications of what they're considering for the future.For instance, we might observe that a carrier is moving toward anew class of business in which we're already successful, in whichcase we might seek a relationship with it.

For our brokerage operations, part of finding a good fit withcarriers is ensuring they really want representation in ourterritory. An appointment is nice, but it doesn't mean much ifwe're not needed. We also want to be sure a company can service ourproducers. We have at times obtained an appointment with a company,only to realize later that its underwriters were too busy to handlethe business we brought in.

As an MGA, the first thing we look for in a carrier is someonewith strong knowledge of a particular class of business. We bring alot to the table for our carriers, and we want them to bring theirexpertise-especially in the area of underwriting. We also want toensure companies are comfortable with giving us the pen, somethingwe have often found easier said than done.

We also strive for a high level of interaction with retailproducers. Outside of providing quotes, we want somebody from ourorganization to visit with each of our producers, face-to-face, atleast once a year. In addition, we want to have other contact withthem (e.g., via fax or e-mail) at least twice a month. This type ofcontact helps us maintain our "branding" with our retailagencies.

Our communication efforts center on learning some importantthings about our agencies and helping them understand what'simportant to us. First, we find out what their current needs are.Are we "touching" an agency in every possible area, or does theirmix of business include additional market segments that we couldserve? Repeated interaction with an agency also strengthens ourrelationship by allowing us to get to know more people at anagency, such as the CSRs who support the agents. The third thing wewant to learn is what an agency's growth plans are. We're investingour resources by working with an agency, and we want to know howthat investment could pay off in the future.

We want our agencies to be aware of everything we offer, interms of both coverage products and our service standards, so theywill turn to us when they have a need we can fill. Thoroughness isimportant to us as well-we are clear about our expectations withsubmissions, so agencies will give us the quality we are lookingfor.

Brad Dickler: We always speak about our MGAsand wholesalers as our partners. Building a good relationship withthese partners requires us to emphasize the elements of a goodexperience for them. Unless an insurance product is unbelievablycheap or its coverage unbelievably broad, we have to go beyondprice or coverage to create such an experience. This first meansproviding superior technical skill. Thus we devote considerabletime to ensuring that our own people have sufficient expertise-wewant them to know what they're talking about. We must be able totrust the information we receive from our partners, just as theirclients must trust the information they receive about us. When wedeal with wholesalers, the information we get about an account isoften second- or third-hand. We frequently work at a quick pace andon exposures of millions of dollars. We can handle business at thispace only if we trust the information we're using.

Our interest in functioning as problem solvers is important.This is especially relevant in the E&S market. Our legal systemconveniently creates lots of opportunities for us in this segment,but we frequently find those opportunities in the uncharted watersof new exposures. Outlines of the risks in which an insurer may ormay not be interested are useful, but a carrier that shows awillingness to solve a client's problem will differentiate itselffrom the competition.

An important challenge to relationships right now is thegenerational transition of agency ownership. Some long-standingrelationships are changing as agencies are passed from onegeneration to the next. It will be important for the oldergeneration to ensure that the corporate philosophy at the heart oftheir relationships is maintained. This effort includes not justpassing a sense of the value of relationships to the nextgeneration, but also the training and knowledge that make themeffective.

Mark Wells: Steve, from a retail agent's pointof view, what information do you seek about a carrier, and how doyou get it?

Steve Brown: This is where we depend on thewholesalers we work with. We expect our wholesalers to not justhelp us understand the specifics of a policy and the policy form,but also to tell us about the issuing carrier's overall quality andresponsiveness. For instance, until a claim occurs, we won't knowwhat kind of experience to expect when working with a carrier onone. We depend on our wholesaler to tell us what we shouldexpect.

Mark Wells: Brad, what do you look for in aretail producer, and how do you get your information?

Brad Dickler: The quality of a retail produceris a significant variable to us, and we depend on our generalagents to qualify the agents who ultimately sell our coverage. Thequality of the GA's efforts to qualify those retailers affects theintegrity of our transactions. We pay attention to our retailers'performance and often ask our GA who the retailer will be forcertain business. In some cases, alarms might go off at our end ifwe are aware that a particular retailer has a bad reputation.

Mark Wells: What kinds of things do you do tomake it easy for producers to do business with you?

Steve Brown: Our first step is ensuring wepartner with the right people. Then we ask what they expect fromus-and we give them our expectations-early in our relationship. Soour carriers know, for instance, that after we send a submission,we call to follow up quickly, asking if the carrier has received itand where the submission is in the carrier's workflow.

Brad Dickler: It's easier to do business whenour GAs prequalify accounts-including the retail agent, not justthe ultimate buyer. It helps if the GA asks some importantquestions before we get involved: What must the price be and whatcoverages are absolutely necessary for an account, and what is ourestimated chance of getting the business? It also speeds things upif the GAs are technically capable and have access to all theinformation we might need. We don't like having to go through threelevels of command to find someone who has the information we needto make a decision on an account.

Mark Wells: How important is price?

Steve Brown: Price is clearly one of theimportant elements. We must be "in the game" and deliver a pricethat makes sense to a client. But it's not nearly as important asensuring we're providing the right coverage for a client'sexposures. This is especially true in the E&S market. Ourclients know why they're talking to us-their exposures didn't fit astandard market, or they couldn't get the limits they wanted. Somost of the time, their primary expectation when they come to us isto get the coverage, and the price is secondary at best.

Brad Dickler: Especially during a soft market,some people do sell on price. But this never leads to the kind oflong-term relationship we look for with a client. We try to remain"in the pack" on price, and to be a leader in terms of expertiseand service.

Michael Warfield: I've seen the surveys thatconsistently rank price as about the fifth-most important factor inthe buying decision, and at times I question whether that's reallytrue. But when your primary goal is to solve a particular problemfor a client, finding the lowest price is not always apossibility-especially, as Steve said, in the E&S market. It'sour job to communicate to our clients that getting the rightcoverage for a given exposure is more important than price.