IIABA Goes International With Membership

In September, Mr. Takahashi and 22 other agents attended the IIABAs annual conference and InfoXchange in Las Vegas, meeting with officials and executives.

"By joining with IIABA network, we hope to learn and apply that learning in Japan," said Mr. Takahashi as translated by Setsuko Sue Noda, president of San Francisco-based SGN Pacific Insurance Brokerage Inc. Her firm specializes in forging relationships between U.S. and Japanese brokers, agents and companies.

"There is a lot to learn from [American independent agents] and their relationships with companies," he said. Mr. Takahashi went on to explain the current relationship between companies and agents in Japan.

Prior to 1996, there was no competition within the insurance industry in Japan, only tight control. In 1996, he explained, after deregulation, what had been a limited property-casualty market of 22 companies shrank to the 10 that exist today–and with that, the number of company-owned exclusive agencies also shrank from 600,000 to 300,000.

However, the 60,000 captive agents, who are defined as agents who work with two or more companies, has remained constant despite this contraction.

Neither of these types of agents own their own books of business. And the captives are independent business people who have to provide their own benefits and offices.

However, there is a third class of agent–the insurance broker–who does own its book of business.

All three classes of producers, Mr. Takahashi said, are limited to the selling of insurance. This is where Mr. Takahashi said he is looking to make the breakmoving beyond just selling insurance to also become a seller of services.

Risk management services, he said, have become a defining element of the U.S. brokers.

He said agents are limited in growth to small and middle market accounts, while the large corporate accounts work directly with the carriers.

He decided to become a member of IIABA to gain access to the associations reservoir of information and learn what it takes to become a successful agent. He said there is no intention to set up shop here in the United States. Mr. Takahashi explained that he only wishes to add risk management practices and other value- added services to his practice for his clients.

He noted, also, that he is looking to educate his staff in becoming "more professional" in insurance matters.

"I have brought five young staff members here," he said through the translator. "There are a lot of benefits and experiences here for them to witness–ranging from the general session to exhibits to software and products. All of this is of great benefit for our staff."

Mr. Takahashi said he is also turning to the educational insurance courses offered here to improve his staff.

"If they learn and study, they will have confidence in themselves and achieve good results in business," said Mr. Takahasi.

His vision of the future involves the development of professional risk managers in corporate Japan. To achieve that end, he said his countrys agents need to be risk management teachers for a profession that does not yet exist, and the agents clients need to all turn into professional buyers.

But to that end, Mr. Takahasi noted, Japan needs more markets to break the monopoly over services that insurers now have. It is important for more American companies to venture into Japan and provide the competition and leverage that would allow agents to become the service providers they need to become, he said.

For his part, Mr. Takahashis firm employes 35 people and has commission revenue of 600 million yen, equal to about $5 million U.S., said Ms. Noda.

Apparently the work that Mr. Takahashi is doing has paid off. Of the 23 people in the delegation who came to the IIABA conference, five more left as members, bringing the total to six international members, IIABA said.

And, Ms. Noda said, the interest continues to grow. Three years ago, 17 agents made the trip to the IIABAs conference, and she hopes more will visit the IIABAs conference in the future.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, October 17, 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.