Integra Financial’s Backend is Driving it Forward

In this new Insurance Journal series we will spotlight agencies that have made a name for themselves in the industry in special or unique ways.

Integra Financial Group does not operate as an insurance agency, but it grew out of one, Huntington Insurance Agency in Huntington, Texas. Founded by Shane Tatum, director of marketing and business development; Sandra Denman, director of sales and distribution; and Shane’s father and company president Rex Lowery, Integra Financial (www.integrafin.com) sees itself, rather, as an aggregator of insurance products, with Huntington functioning as its sister retail agency.

Insurance Journal recently had the opportunity to discuss with Shane Tatum the growth and development of Integra Financial, its back end technology system and the company’s plans for the future.

IJ: Can you describe Integra Financial?

ST: We are an agency network, our structure is that of a cluster. Each agent actually owns a small portion, a very minority share, of the organization. And the way we see ourselves from a marketing standpoint is an aggregator. Some aggregators are doing … one specific area, like maybe BOPs. … We believe we’re aggregating … on a larger scale. We aggregate commercial and personal lines for market access.

Plus we have that technology piece … where we have it set up so that an agent can get a slimmed down version of an agency management system and they can do that all through the Internet through our Web site. Basically, it’s a management system without accounting. Because we find that most smaller agents don’t utilize accounting.

IJ: Are your members typically small agencies?

ST: Typically our agencies would be less than $3,000,000 in premium.

IJ: What obstacles did you face, or are still facing, in setting up this business?

ST: Financial resources. We’ve taken on no outside funding, that’s a big deal. We’re doing good, but when you don’t take on outside funding, it has to go a little slower than we anticipated, because we grew out of revenue. We’re growing purely out of profitability and revenue of our own.

Between that and … providing adequate stability to markets that we feel like are necessary to do this type of model. We feel like we have to increase the stability of the marketplace for our group. And in the current market conditions, that’s pretty difficult, no matter how big you are.

IJ: What is the technology that allows you to do what you do?

ST: It’s branded Integra WebWorks and it has both personal lines and commercial lines functionality … to it. And then in the back end there’s also a management system. Now really what it is … it’s basically an ASP wrapped into an intranet site for just our group. … It’s not publicly accessible. You have to have a contract with us to get in. You have to be an affiliate-that’s what we call our members-affiliates. You have to have a user name and password, and to get a user name and password you must be a contractual member of the group.

What happens is, once they log into this site, there are various resources. Some are very common type resources to anyone who’s in the wholesale marketplace. Where you have your information sources-you’ve got various company underwriting information, or tools to do business. And then there’s an area, depending on what it is you’re needing to do, there’s a place where we have created a virtual desktop. It’s basically a link underneath the site, called My Software. And from there you can actually get, when you log in-depending on what applications you have access to-it’ll give you an icon for that application.

You may not have access to everything. … Maybe you’re not subscribing to the management system because it’s not mandatory, it’s just a tool. It’s totally separate from the market access. It’s priced at a point to where … it’s pretty much below market. I’m going to guess anywhere from 25 to 30 percent below market for typical ASP management systems.

IJ: Do member agencies pay an application fee or initiation fee?

ST: We have agents that do commercial lines and we have those that do all lines, and all lines include personal lines. On the personal lines (side) they would pay a set up fee or application fee of $295. … But what we’ve done with that is, that if they’re just doing commercial lines, there’s no monthly charges because … the underlying technology costs are not as high. But if they’re in a territory where we can get them a personal lines market or if that’s something they need and we can provide them, what happens then is … the $295 on the personal lines or the all lines side, includes the first 90 days. But then there is a decreasing monthly administrative charge on the personal lines side. And that’s basically to help subsidize the cost of the technology to do this.

IJ: What do you look for when deciding to take on an agency?

ST: We have a pretty extensive contract packet, affiliation packet, that collects basic agency data to profile their agency. We look at loss runs, we look at time in business, and that’s not necessarily a bad thing because … we’ve actually created independent agents through our model. We basically want to see how they perform. We’re not really in the business of taking on an agent that just decides to go get a license, that’s not where we’re at really.

But we have agents that have left their respective captive organizations, have become independent. Maybe they’ve taken their contract value with Farmers or they’ve left their Allstate arrangement and they want to go independent. We try to look at (the) experience they had. How long they’ve been in business. How long they’ve been an agent. We’re typically looking for someone that’s been an agent at least over five years, and has some experience there. …

We have over 350 members across three states, and going on four. (We’re in) Texas, Louisiana, Arkansas and Missouri right now, but trying to grow.

IJ: What carriers do you have relationships with?

ST: We have relationships with Safeco, Zurich, Foremost, and several regional carriers.

IJ: In your opinion, what sets your business apart?

ST: I really think the back end piece, the fact that we do have ways to write business, streamlined business, for agents to do business on the commercial side. We have basically a place for them to come in and get quotes in a very short amount of time, to write BOP or small commercial. We think we’ve streamlined the process.

That’s not really standing apart from what other aggregators have come up with and developed. But the big thing is, from a management standpoint, once you get that business on the books, how you manage it with your affiliates, with your subagents, is what we believe is a big, critical piece. That management system piece, the ability to tie an agent into our back office facility so that we can collaborate or get instant information through the system. We think it’s kind of an edge, a little bit of an edge there. …

Because we’ve really expanded our willingness to aggregate products outside of just pure insurance market access. … We have an agreement with ProgramBusiness.com, and in this market it’s a great business. Agents that are part of our group get … one of the best deals on the market for getting access to ProgramBusiness.com. …

It’s place where you subscribe to it, you pay a fee for every six months. You can enter a risk, it’s mainly for surplus and non-standard type business. … because that’s not something we do, we’re purely standard business driven. And our agents needed a place to … say, ‘here’s my risk, is there anyplace in the market that will take it?’ And that’s what ProgramBusiness does. So it was a good relationship for us. We’ve got, I think about 20 percent of our agents, we launched that in March and about 20 percent of our agents have signed on to that so far. It’s optional, it’s not mandatory.

We’re looking to duplicate our efforts throughout several other states. We’re licensed in 12, but we’re only doing business in three. Well, I’m going to say we’re doing business in Missouri because we just opened up there. We have a couple of agents that have come on.

Really, again, we feel like there’s got to be a stabilization to the small agent in the marketplace. Small, independent agents have a lot of things to do. They have businesses to run, they have so many things and our goal is to make life a little easier for them. …

As far as states, really that is product and carrier driven in this marketplace. We would love to be everywhere, because we think the opportunity is there. But we must have the carriers within those (territories). Since we do business in personal lines, it’s not like small business where you can just go out into 45 states and pretty much have everything be similar. If we’re going to write auto in 45 states, we’ve got to figure something out. It’s a little bit different. Personal lines, therefore, takes a little bit longer to get up and running. The agency universe study indicates that most small agents, the majority of their book is personal lines. That’s our goal, to enhance their ability to compete.

We’re about to launch a brand new small business electronic quoting and submission system. That’s projected to come on line in the next couple of months. And that’s going to really put our small business area in the same production capability as our personal lines today. Because all of our personal lines is driven through automation, and that’s what our commercial lines will do in a few months. It will also be driven through automation.

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Topics Agencies Tech Personal Auto