AAMGA Reflects on Prosperous Year, Plans for the Future

The American Association of Managing General Agents (AAMGA) will hold its mid-year meeting at the Phoenician Resort & Spa in Scottsdale, Ariz., on Nov. 13-15. At the heart of this year’s meeting will be several industry roundtable sessions.

“A few of the roundtable topics include the availability and strength of the reinsurance market, carrier ratings and the adequacy of capital surplus,” Bernd Heinze, executive director of the AAMGA, said. Heinze noted that no doubt AAMGA members will address the sustainability of the current marketplace, both on a qualitative and quantitative basis.

The hard market has brought about prosperous times for those in the surplus lines industry. According to Heinze, the industry wrote $12.6 billion in annual premium volume in 2003, up $1.3 billion over 2002, in both admitted and surplus lines business. The increased business has exposed many AAMGA members to new faces in the producer workforce; creating relationships that managing general agents (MGAs) hope to maintain as the market begins to soften.

“In today’s marketplace, at the click of a mouse you can bind billions of dollars of business,” Heinze explained. “Even so, this is still a relationship business that needs trust. Trust comes with longevity. And you can’t establish longevity without having a trusting relationship between the agent, carrier and managing general agent.” Heinze claims that the rise in frequency of submissions has at least doubled during the last year. “2003 has been one of the most productive and important years for us,” Heinze said. “Our members have received an overwhelming number of inquiries from the retail producer market.”

To help its members maintain and foster relationships built with agents in recent times, the AAMGA University, a continuing education program, will hold a special session, “How to Grow and Strengthen Retail Agent Relationships,” at the November meeting. After the hard market subsides, perhaps positive “relationships” built during recent times will become the deciding factor when a retail agent or broker chooses an MGA.

When choosing a managing general agency, Heinze advises retail agents and brokers to look for the demonstration of quality and expertise. Designations such as AAMGA’s certified managing general agency (CMGA) offer some insight. “Continuing education often shows commitment to the business, helping the general agent to stand out from the rest,” Heinze added. “And from an insurer standpoint, carriers want to be sure that the MGA fosters their skills through education.” Currently, the University offers three designations: the CMGA, and two additional designations for individuals — the certified insurance wholesaler (CIW) and the certified wholesale insurance specialist (CWIS).

“An agency with a CMGA designation has met the criteria of eight hours of continuing education credits for each employee in their organization,” Russ Rado, CPCU, education director for the AAMGA, said. “This designation demonstrates the agency’s dedication to the professional development of their employees.”

The AAMGA University has had tremendous growth, adding its full curriculum online in April 2003, including the addition of Microsoft product training. The University’s courses, whether online or by conference, are available exclusively to member organizations and staff of either the AAMGA or the National Association of Surplus Lines Organizations (NAPSLO). Members are, however, able to sponsor a program that allows the University to take its curriculum on the road. “We recently took our advanced trucking and transportation course to Seaboard Underwriters in North Carolina, where they invited 78 retail agents and their company to take part in our 12-hour class,” Heinze said. According to Rado, the ‘sponsored programs’ are fairly common and provide an added-value tool for the retail agent, while working as a marketing tool for the MGA.

Heinze also noted the AAMGA’s continued involvement with insurance industry legislative organizations, such as the National Association of Insurance Commissioners, as worthy accomplishments. Recently, AAMGA worked in conjunction with NAPSLO and Western Insurance Cos. to advocate for the deregulation of surplus lines policy forms in New Jersey. The deregulation was signed into law in Sept. 2003.

But while most AAMGA members have experienced good financial times in 2003, they haven’t been excluded from today’s tight insurance market. The availability of errors and omissions (E&O) coverage for MGAs has become a critical concern as a number of carriers have left the marketplace or gone out of business. Heinze reports that many members have had extreme difficulties replacing their E&O policies at renewal and that the topic will definitely be on the table during November’s meeting.

Additional highlights include a blue ribbon panel discussion from industry executives and a special presentation in honor of Veterans Day.

The executive panel will touch on a cross-section of industry issues, including reinsurance availability, regulatory, licensing and legislative issues, as well as alternative risk strategies. Visit http://www.aamga.org/upcomingEvents/eventdetail.cfm?id=43 for more details.

Topics Trends Agencies Excess Surplus Training Development Insurance Wholesale Market Human Resources Professional Liability