Last month we wrote a blog about whether or not independent agents really need two trade associations. As I mentioned, it's far from a new issue; the debate has been raging since I've been writing about insurance.

Since then, I've been getting a steady stream of commentary in my email box from readers wanting to weigh in on the issue.

Testifying to the longevity of this issue was one reader who's been tracking it since the early 1990s. From Ted Lussem, Brooks-Lussem-Clem Insurance, Urbandale, Iowa:

Back in 1993 I put together what I called a monograph about the Independent Insurance Agents in Des Moines…One paragraph spoke to this double association nonsense: They were (are!) protecting their own “kingdoms.” Back then I owned my own agency and was vocal about the need to merge. In 1991 or 1992, when my research was being done, there was even a vote by the members of both associations that overwhelmingly supported a merger of these two organizations; more than 90 percent were in favor of the merger, as I recall. I am told that the by-laws of the PIA today will not even allow the discussion of a merger in the future. Since I am not a member of the PIA I don't know the validity of that statement however. Today, while still working part time for the firm I sold in 2000, I have little power of suggestion on this subject that anyone would listen to.

Although my discussion centered on the practicality of a merged association–and several respondents stressed how important this was–I didn't realize that for some agents, the issue is emotional as well. For at least one reader, the discussion brought up memories of his father and the old stock-versus-mutual schism of the past. From Thomas C. Watson Jr., president, Watson Insurance Agency, Inc., Gastonia, N.C.:

My father founded our agency in 1934, and for years we were one of those so-called “mutual agents”…While it is true that the mutual insurance companies gave their agents price advantages in many instances through the dividends paid, I always believed Dad's success came more from his work ethic than from price. His favorite caricature would have been an old-line stock agent, sitting in his office at 2 p.m., still waiting for some company guy to drop by for a visit and buy his lunch. His favorite competition was the agent whose signage, stationery, pens and pencils all bore the names of insurance companies. Dad never asked for a commission schedule which wasn't commensurate with his premium volume and loss ratio. He thought it more valuable if he had something to sell at a reasonable price.
Dad and I both served the mutual agents association in the Carolinas as association president, and I was honored to be recognized as PIA's National Agent of the Year in 1980. Ultimately, the two state associations merged, an event we supported since we had been members of both, paying double dues for a number of years. We never thought it a waste of money belonging to both associations, but it was pleasant to pay only one dues schedule. The important thing is, to quote an outstanding former member of our organization, “It's a good thing we do!” I still can't come up with a better thought.

States that successfully merge organizations find the way to make it work is to set aside egos and have a common goal. From Ray Gallant, chair-elect, MAIA:

We have been a merged state for almost 20 years. Due to the courage and leadership of Mark Silva (PIA) and David McCormick (IIA), presidents at the time, the merger was cobbled together. To this day there are members of the staff that worked at either association. It took a little time, however, by checking egos at the door, to become a highly successful state association that speaks with one voice. It was the soundest move we could have undertaken and I would urge other states to do the same.

Anonymous in Illinois agreed:

The problem is the male ego; if you notice, the national boards of directors of both associations is predominantly white males. In the '90s, Illinois combined the two organizations. Both sides were mildly uncomfortable at first but today we have a good association, well capitalized, with about 1,300 members. Illiois was one of the first of only five states to merge. The impetus was duplication of efforts, save money and a spirit of “let's work together.” Administration was determined by going to the executive committees of each group and asking them to take turns being president. Ten years ago the organization deaffiliated with PIA National.

And just as I suspected, the worst-case scenario in an association blend comes when the 800-pound gorilla's interests supersede everything else. From Anonymous in Michigan:

When a merger happens, the dominant organization ends up taking over with their leadership and culture…That happened in Michigan, and the merged entity has slowly been controlled more and more by large agencies, mostly in the metro area of Detroit. Not good for agents in rural and smaller towns.
Some of the leadership of the old association who were cast out of their positions for disagreeing with the merger reformed the old association. It has been a weak, small organization since then, until just recently with a spark of new members. We kept a dual membership all along, not totally agreeing with the lack of competition between the organizations. However, we have been very active and supportive of the merged organization since the inception. I chaired the young agent board for several years, then later was elected to the association board serving three 3-year terms. During my tenure on the board, I saw an increasingly arrogant organization, one that squelched disagreement and outspoken people whenever they could. I also saw a CEO whose salary and bonuses dwarfed most of those he was “serving.” As the economy got tough, programs for agents were cut and costs for programs and dues increased. Staff was cut, but the CEO took very little cut in comparison…The organization is less than transparent, keeping sparse minutes of meetings and hiding behind attorneys to fight disagreements with the board.
This has caused many active members to seek an alternative. Thus, the new organization is enjoying a steady influx of new members. They have a long way to go, but there is hope from those newly joining that they have found an alternative association that will be more transparent and accountable to its members. My dad always said we needed two associations, the competition keeps them honest. He was right.

So what do you think: Paper or plastic? Kirk or Picard? More taste or less filling? Let's keep the conversation going…

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