Agent Associations Bridge the GAP BetweenTradition and Technology

The IIAT and IIAA have the arduous task of integrating a century of traditional service with a new evolution of business and technology. And while many things are changing, much remains the same.

For over 100 years, small insurance agents around the country have signed on to become part of the Independent Insurance Agents of Texas (IIAT), a state organization affiliated with the larger Independent Insurance Agents of America, which currently represents more than 300,000 agents and agency employees nationwide. Many joined just to use the “Big I” logo; others to learn about insurance, to meet other independent agents and to network.

Tom Boren is one of those that joined for the well-known logo. But Boren, head of Western Insurance Agency in Copperas Cove, wound up writing over half a million dollars worth of insurance because of his affiliation with the organization.

Soon after he joined, the IIAT created a program that gave small agencies such as his access to large companies like Travelers. “I would not have had that access without this program. During the next two years we wrote over $600,000 worth of business with Travelers. And because of that we eventually got a direct contract with Travelers,” Boren said. Based on his agency’s work through the IIAT, Travelers was able to look at Western’s operation and decide it would fit in as a Travelers agent.

Boren said he also began attending IIAA and IIAT conventions. Through sessions geared specifically toward small rural agents, Boren secured a contract with Blue Cross/Blue Shield and, eventually, a contract with Safeco American States. “Everything I’ve done with them has really impacted us positively,” he said of the IIAT and IIAA. “So if you want me to sing their praises, I will.”

A century of experience
He’s not the only one. A century of work within one industry makes for a powerful organization. For the third year in a row Fortune magazine named the IIAA one of the most effective lobbying groups in Washington.

That ranking comes from the organization’s “enormous clout,” said IIAA CEO Paul Equale. “It comes from the grassroots. An individual agent is very effective in their local community and our state associations are very effective at the state level. But it’s the collective power of agents speaking with one voice at the national level that translates into government affairs effectiveness,” he said.

Equale has been CEO for two years—but has been with the IIAA for 18 years—and has watched its modern-day evolution. “The old saying that the more things change, the more they stay the same is somewhat true. Agents are still focused on the market and on their customers and want to maintain a good relationship with companies as well,” he said.

State associations are still an integral part of the Big I network. They are often a bit more nimble, Equale said, and if something is working very well for one state association they can export that to other states.

“Texas for instance, is one of our leading states in providing educational resources and many of the things they do at the state level in Texas have been extrapolated to other states,” he said.

Plans for the Big I
Yet even as Equale sings the praises of the IIAA’s system, big change is afoot, both at the national and state level. A major branding initiative has begun nationally, intended to raise public awareness of independent agents and the value they add to the insurance market.

“The difference between advertising and branding is that you take your brand and spend a lot of money to spread your brand through advertising. We are branding the IIAA as an insurance distribution channel of value and excellence,” Equale said.

And the CEO is also repositioning the organization, as one that will become a retail platform for financial service products and advice. In fact, Ernest Stromberger, executive director of the IIAT, said his organization has just created a company called IIAT Finance Company that will offer member agents two products. The first, premium financing services, can be used by agents to fund their customer’s premiums, and gives them an opportunity to place their premium finance business with an association-owned facility. The second is asset financing, which gives members a source for customers who need financing for equipment or other assets.

Stromberger said the asset finance program gives his members the opportunity to expand into financial services by connecting customers to a lending facility, something that is especially important in light of new federal laws integrating banking and insurance.

While the branding campaign and expansion into financial services is big news, the biggest changes by far for the IIAA and IIAT are web-based, designed to help agencies keep pace with technology and use it to enhance their businesses.

“Technology is changing the way agents do business. It will enable an insurance agent to be more mobile, using voice activated laptop computers, for example. I think personal relationships will always be part of the transaction but it’s the power of the marriage of personal relationship with technology that will give agents their future,” Equale said.

And that’s because the customer of the future is going to be spending a significant amount of time online. “The younger generation wants to use the Internet whenever they want. If it’s 2 a.m. and they just got home from partying but were stopped by a police officer and got a ticket, they want to go online and check their coverage or ask their agent a question about how it will affect their rates. We can’t do that yet today, but that’s what the consumer is going to be looking for,” Equale said.

To that end, the IIAA is expanding its web presence, beefing up its already sophisticated web site, and has just introduced its Virtual University, a 24/7 online resource for both state associations and the general membership, providing them with educational opportunities and informational resources.

Bill Wilson, director of the Virtual University, said the goal is a one-stop education and reference system for agents and the industry at large. “It will be accessible by companies, consultants, insurance attorneys, anyone—they don’t have to be IIAA members, although there will be a pricing difference for use. We don’t plan on turning anyone away,” he said.

The centerpiece of the VU is a research library with three sections—insurance, business and technology. Articles and insurance policy interpretations, sales information—just about anything an agent needs to know will be available at the library, Wilson said. “We will also offer online classes filed around the country for continuing education credits. We’ve got a student lounge, a free newsletter, and an ‘ask an expert’ service.”

The IIAA has recruited about three dozen volunteer faculty members to staff the expert line and has partnered with Anlon Systems in Minnesota to provide the online classes.

Also up and running in several states—yet not in Texas—is the Big I Market, an Internet-based password access system for agents who want to do business with their companies online. It enables them to conduct business in person, online and on the phone, all in real time, Equale said. “Right now it’s focused mainly on specialty coverages,” he said, “but eventually it will become the way insurance agents work with their companies.”

Changes on tap at IIAT
On the state level, the IIAT is also in the process of building up its web presence, adding information and offerings to its web site. Stromberger said that it’s an expensive undertaking, so he’s laid out a two-and-a-half year plan to do it. “We’re hiring someone to put the technical information we’ve traditionally prepared and presented through coverage handbooks online. Our goal is to have all the information online by next spring,” he said.

The IIAT plans to work with the national organization to take advantage of the interactive educational offerings through VU. The IIAT, though, already has a reputation for its educational resources and Stromberger said although the web offers tremendous opportunities, he doesn’t think online education will replace classroom education.

“Especially for customer service staff, we think classroom education will still be significant, because in their early years, a person new to the industry learns as much from other people in the classroom as they do from the instructor,” he said.

Among state associations, the IIAT is one of the most in-depth sources for technical insurance information for its members, said Stromberger.

The Texas association has developed an in-depth array of resources for members and intends to capitalize on the power of the Internet by converting significant amounts of those resource materials into an easily searchable database, he said.

Despite the flutter of new initiatives and work at the state level to become technologically current, membership at the IIAT isn’t increasing. Stromberger said it’s down 1 percent for the year and has been holding steady for the past three years.

“We feel membership is about as high as we can get it, because of mergers in Texas. There are lots of agencies forming clusters or merging or selling out. So it’s not that people are dropping out of the association, it’s that they are combining into smaller business units. The total number of people has remained the same,” Stromberger said.

What the future holds
Both Stromberger and Equale are hopeful about the future; both see the Big I as playing a significant role in the industry’s future. Equale likes to use a quote from hockey player Wayne Gretsky in illustrating the IIAA’s current mindset.

“Someone once asked Gretsky why he was a better player than anyone else and he said, ‘It’s because I don’t play where the puck is or has been, but where it’s going.’ That’s where we are,” said Equale. “Even though we spend some of our time looking at the past and valuing it, most of our time is spent planning for the next 104 years.”

Topics Texas Agencies Tech Training Development