MGAs Measure Success Of Relationships Boca Raton, Fla.

Relationships with carriers and retail agents are critical to the success of any managing general agency and laying out the groundwork to manage those relationships can help an agency grow, a consultant said here last week.

Paul Balbresky, a consultant for Balbresky Consulting Services in Malton, N.J., led a seminar discussion titled “Sales Management and Coaching: Tools for Success,” during the annual meeting of the King of Prussia, Pa.-based American Association of Managing General Agents. Together with industry executives, he outlined strategies agents should use to pursue clients and carriers, and tools to measure success.

Agencies cannot continue to grow through acquisition and not pay attention to the growth of their sales cultures, he told the MGAs. “You cannot keep on acquiring businesses, cutting year-over-year to cover the expense [of acquisitions] and still keep up with quality of service.”

During the session, MGA attendees broke into working groups to work up ideas on how they would approach relationships with carriers and retail agents.

When cultivating a new relationship with a carrier, its important for an MGA to understand if the company fits in with your agency in terms of products, philosophy and business systems, said Kurt Bingeman, president of The Russell Bond & Co. Inc. in Buffalo, N.Y., speaking for his group.

Mr. Bingeman continued by saying that meetings set up between people designated within the company and key MGA personnel, give each the opportunity to understand one anothers culture and establish lines of communication. As the relationship develops, it should be reviewed every three-to-six months to check on its progress. It is also important to put an overall joint development plan in place to cement the relationship and make sure good decisions are being made on the way, he said.

When it comes to the actual management of the relationship, said Amy Zettel, vice president with United Brokers in New Albany, Ind., “communicating praise is just as important as discussing problems,” speaking for the next group.

As the relationship progresses, it is important that each party understand what the carriers plans are for keeping the relationship going. The MGA needs to emphasize the importance of the carrier to the MGA and, equally, how important the MGA is to the carrier, she said.

There should be ongoing meetings to see where the relationship is and how it is progressing, she added.

Mr. Balbresky said that as part of the management doctrine, the MGA should have an individual within the underwriters office designated as the contact, in case there are changes within the company. This person can also help the agency cut through the company politics.

On the retail agent side, in dealing with that initial relationship, Todd A. Barnhardt, a trainer and consultant with Barnhardt Development Associates in Eau Claire, Wis., speaking for his group, said the MGA needs to look at the agencys existing relationships closely to avoid competition with other agencies and companies.

The MGA needs to interview the producer–having the producer come to the MGAs office with the aim of getting a feel for one another. The process also involves seeing if the agent is serious about doing business with the MGA and developing a relationship, or whether the retail is instead just looking for a quick fix.

Developing that relationship, said Mr. Balbresky, is key to developing the trust between both parties, which he compared to a bank account that starts at zero and must be built up. “Face time” is the most important way of building trust between the parties, he said. Business today, he noted, is largely done through technology, which reduces “some of the power of the message” being communicated between the parties.

Peter Cottrell, president of the Professional Liability Underwriting Society, speaking for his group said, the MGA needs to understand the scope of the producers business in geographic terms and the problems he or she faces. There is an overriding need for communication between MGA and producer. Part of that communication means identifying a liaison in the MGAs office that will gather information and listen to the agencys problems. This also includes monitoring the work that is going on and “making sure all are on the same page.”

Measuring the success of these relationships is as important as knowing how to create and manage them, Mr. Balbresky pointed out, moving attendees to the second phase of seminar.

In order to measure the development of the carrier relationship, Joe Ricigliano, vice president of transportation with Arlington/Roe & Co. in Indianapolis, Ind., said there should be a check-off list of items each party should review to make sure every part of the relationship is being examined. Some of these items should include financial stability, hit ratios, underwriting guidelines, territory, volume and products, he said, speaking on behalf of his group.

The carrier and MGA should hold regular meetings to see where they stand on these items and discuss where they are going, he said.

In maintaining the company relationship, Jill Shelton, an underwriter also with United Brokers, said her group viewed the process of collecting data and information on the companys health as being important. The information can come from journals and association membership, she said.

Others said that those carriers who are open to new product developments and enhancements signal the carriers interest in the health of the relationship. One said that when a carrier representative quickly returns an MGAs phone call, that action indicates the carriers continued interest in keeping that relationship going.

On the producer side, it is important to set production goals and monitor premium levels as a measure of how well a new relationship is growing, said Emily Lomax, senior vice president with Heritage General Agency in Irvine, Calif.

Mr. Balbresky observed that by measuring the progress of this relationship the MGA can step in and coach the producer through the process to get the business the MGA expects.

As the relationship matures, the MGA manager needs to analyze the programs the producer presents to make sure they remain profitable and do not suffer unmanageable losses, said Alex L. Thomas, a broker with Adco General Corp. in Denver, Colo. He added, for his group, that the MGA should establish financial milestones as a measure of the quality of business being given.

Mr. Balbresky added that it is not a good idea to gather information for information sake but to make sure it is good quality information. He said the benefit in the end of all this planning is to achieve quality business and make money for everyone involved.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, May 26, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.

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