Incoming President Ware Talks About Canadian Expansion & Why AAMGA Is More Than MGAs

The American Association of Managing General Agents (AAMGA) expanded its membership again in 2015 with the addition of eight new organizations, all based in Canada.

The Canadian organizations sought to become part of the AAMGA in an effort to access additional education on emerging risks and the ability to network with other MGAs and program managers all across North America.

But adding Canadian organziations to the AAMGA fold meant a change in organizational bylaws for the association, said Bernd G. Heinze, executive director of the AAMGA.

“We were approached by a group of Canadian managing general agents about two years ago, and they asked whether they could join the AAMGA,” Heinze said. “At that time, we didn’t have the ability to do that, so we changed the bylaws to allow them to join.”

In April 2015, the eight firms officially joined the association. Those members included:

• Creechurch International Underwriters, Ltd. in Toronto, ON
• Western Underwriting Managers, Ltd. in Vancouver, B.C.
• Aurora Underwriting Services, Inc. in Edmonton, AB
• National Brokerage Services, Inc. in Montreal, Quebec
• Groupassur, Inc. in Saint-Leonard, Quebec
• Beacon Underwriting, Ltd. dba Can-Sure Underwriters in Salmon Arm, B.C.
• Angus-Miller, Ltd., in St. John, New Brunswick
• Special Risk Insurance Managers, Ltd., in Langley, B.C.

AAMGA’s Incoming President Roger Ware said the Canadian managing general agents is a significant addition to the association’s vast pool of specialized and international underwriting talent.

“Given the number of underwriting specialties currently in the wholesale insurance market and the multitude of opportunities within Canada, furthering our engagement with our colleagues is mutually beneficial,” Ware said. “Our new Canadian members now have access to a deep network of resources and expertise, and AAMGA benefits by playing a bigger role in the shape of things to come in the Canadian insurance market.”

AAMGA will host a delegation of its new Canadian members at its annual meeting this month.

Insurance Journal: Why did you open up AAMGA to Canadian companies? What was the motivation?

Roger Ware: There were a couple reasons. First and foremost, Canada doesn’t really have an association similar to the AAMGA. … We have educational opportunities. We get involved in a lot of regulatory issues. We certainly have a voice at the table in London, and those were some of the things that these Canadian brokers wanted … On the flip side, from an association perspective, we’ve always realized that we could learn a tremendous amount by spreading our wings, and learning from people in different parts of the world. We all learned a tremendous amount from London, and I think London has learned a tremendous amount from us. … Having folks from Canada in our association is extremely exciting, because we can learn as much from them as they can from us.

Our association is there for the entire wholesale industry; it’s not just in the U.S. Canada is the first step, but none of us see it as the last step. We’re looking to see who fits in our association, really anywhere on the globe. If they can help us learn, and we can help them learn, we just think it benefits everybody….

Some of the Canadians do business in the United States, and some of our folks also do business in Canada. It’s a borderless economy, especially, with technology the way it is. … We think there’s the potential for more than 30 more Canadian members.

IJ: The AAMGA has changed its membership bylaws in the past couple of years. In 2013, the organization expanded to the broader wholesale industry; not just MGAs. Do you anticipate further expansion?

Ware: We are, and we have. We also incorporated anybody that’s in the program space. The way we look at it is that nobody really fits the definition anymore of a true MGA.

Almost everybody has transitioned over the past five to 10 years to doing more than just writing business for one or two carriers. Most of us have multiple carriers on both a binding authority and brokerage basis. Most of our members do programs. When you look at the membership and how it’s transitioned over the past five to 10 years, it made perfect sense to expand because all of our members have changed dramatically. …

Everybody is looking to grow their operations, and there has been a lot of her interactivity over the past four or five years. We’re more than just MGAs. Most of us have programs, we are aggregators, a lot of us do business on an admitted, standard market basis, and we are just providing those markets to retailers. Our business has just transitioned. … I think a lot of it has been driven by technology, and a lot of us can get our products out to a broader audience. …

Our membership does not look today like what it did five years ago, and it isn’t going to look the same three or four years from now as it does today. It’s constantly changing.

IJ: Are you seeing consolidation continue in the MGA space?

Ware: Yes, 15 years ago there were some people who thought MGAs wouldn’t survive 10 or 15 years. They thought an MGA would be a thing of the past. Not only have we survived, as an industry, as MGAs and wholesalers, we have thrived. Now, people want to own MGAs. They want to own the type of organizations that are members of the AAMGA. We are now very popular to a lot of people. I don’t think we’ve ever been more popular, as an industry, then, we are now. It seems every carrier wants to start an MGA type of division within their company – and there’s a reason for that.

If you go back five, 10, 15, 20, 30 or 40 years, MGA companies on the whole outperform most companies on a combined ratio standpoint by 10 points. That’s continued through today, and it’s been that way for the past 30 to 40 years.

IJ: Looking at AAMGA demographics, more than 85 percent of the membership is younger than 50. Some 63 percent are younger than 40. Are younger people more attracted to the wholesale side of the industry?

Bernie Heinze: We give presentations to students online and from around the country, and we always title our presentation, “E&S Insurance: The Exciting and Sexy Side of the Insurance Marketplace.”

That’s really what it is. We see more and more young people who are entrepreneurial, wanting to get involved in the E&S marketplace, because it gives them that freedom to be creative, to be competitive. To expand their minds beyond the rates and forms that you see in ISO forms, which are very good for the admitted side, and they work. But there’s also that side of the marketplace that we represent and that is exciting to young, fresh talent. …

We’re seeing students wanting to become involved in an industry where they can really exercise their minds, their innovative skills, their creative talents, and really rise above what admitted forms may be able to provide for them.

Topics Agencies Excess Surplus Underwriting Training Development Insurance Wholesale London Canada Human Resources