AAMGA University Aims Fundamentals Class at Newbies

By | September 6, 2004

Something different was definitely in the air at a seminar put on by the American Association of Managing General Agents (AAMGA) last June. As the group of MGAs and wholesale brokers settled in for the introductory dinner on a Sunday night in suburban Chicago, the small talk didn’t concern perpetuation or grandchildren, but the town’s must-see hot spots. A few glances around the room immediately revealed an attribute common to many of the attendees but often lacking at insurance functions—youth!

It should not have been a surprise considering the setting. The 70 insurance professionals who gathered in Chicago were there for the AAMGA University’s Fundamentals of Insurance and MGA School, a three-day seminar and workshop aimed at helping people new to the wholesale side of the business—or new to insurance, period—hit the ground running.

The AAMGA University has been around for decades, offering seminars on various specialty lines as well as designations for individuals and brokerages. These offerings were aimed at professionals with many years of experience in the industry who were looking to fill in the gaps or gain more expertise within a given niche. But it was only a couple of years ago that feedback from members convinced the group to offer a course aimed at entry-level newcomers with one to five years’ experience in wholesale insurance.

The course, team-taught by employees of Deerfield, Ill.-based professional liability insurance wholesaler Shand, Morahan and Co., covers a broad range of subjects, according to Henry Lopez, a marketing executive for the firm.

“At Shand, we’ve got 80 underwriters who have been in the industry for 20 years or so, and who could help educate our newer members on professional lines, general liability and other classes,” Lopez told IJ. “We can help them understand how to build relationships with retail agents and company underwriters. We can help them understand the claims process and see how rates and reserves are developed.

“We’ve got all the pieces of the pie that we could offer to these students over three days or so to offer a base knowledge of the industry and how it works, not only from the product standpoint, but from a financial standpoint,” Lopez added. “The basic question we try to help answer for the students is, ‘What do they need to do as an MGA to offer the best products to their clients?'”

Shand, a division of specialty insurer Markel Corp., had access to a wide range of in-house talent, to judge from the breadth of material covered. Lectures covered: an introduction to basic insurance terminology, including a crossword puzzle—No. 7 down asked for an 11-letter word or phrase meaning “an insurer who is not licensed to write business in a particular state” (see the end of this article for the answer*); GL, property and special events; health care, medical malpractice, professional liability, financial stability and ratings agencies; actuarial science and claims; products liability; employment practices liability; the law governing MGAs; and, lastly, “selling and influence skills.”

Eyes on the prize
The real meat of the course, however, lay in a teamwork exercise around the case study of a fictional Medico Corp. The students were split into six teams, each assigned to examine a different portion of the medical diagnostic facility’s insurance portfolio, work with an underwriter on the submission, and make a presentation to a panel of Shand underwriters. Organizers put a little skin in the game by awarding each member of the team that made the best presentation a $50 American Express gift certificate.

“We wanted the students to build relationships among themselves,” Lopez said. “We put them in group dynamics to tackle various coverage issues so they could learn how to work within groups of people with different backgrounds, different areas of expertise and different levels of experience, because that’s how it is in the real world.”

With team names such as The DMs (e.g., Decision Makers), Managing Guru Association and Read Between the Lions, it was clear the students brought a mix of cheekiness and thirst for victory to the competition. Juliette Gamini, a broker for San Mateo, Calif.-based Brown and Riding who took the course, said she enjoyed the interaction with other members of her team, the Insurance Nerds.

“I think the most beneficial aspect of it was the dialogue we had amongst our group. Got to see and hear people’s different backgrounds,” Gamini told IJ. “Even more experienced people may have overlooked certain things than people newer to the industry. And also from the perspective of networking within a group. How do you come up with a solution? There was no really right answer for any of the groups. But can we work together and come up with different solutions?”

Lopez said that was the intention of the exercise.

“It forces every student there to get involved in the course,” he said. “You can’t sit back and not participate. Your group is going to require that you get involved in the case study and offer up your opinions.”

Lopez said that the case study also included irrelevant information to simulate real-life submissions, and that different teams were given surprise information in mid-course. In one case, the carrier had just been downgraded. In another, the retail agent had already received a competing quote and wanted an answer.

“I thought it was great,” said Jody Oster, a broker with A.J. Renner and Associates in Chicago. “It gave it a little bit of a competitive edge. Sometimes seminars get boring. This made you pay a little more attention, and made it a little more fun.” It’s impossible to know whether the fact that Oster’s team—The DMs—took home the prize affected his reaction to the team exercise. Anyone willing to bet a $50 American Express gift certificate that it did?

Relationship skills
Lopez said the course was designed to touch on three key areas: the technical aspects of coverage; how insurers develop and price their products; and building better relationships with retail agents and insurance carrier underwriters.

It’s that last piece “that we really, as an industry, don’t do enough educating about,” Lopez said. “The product of the MGA is not just the insurance policy. It’s the service they offer their customers—the turnaround time, the expertise, the knowledge of the markets, knowledge of what’s happening in the marketplace for that coverage. Understanding how to best apply that expertise to the needs of your retail agent is crucial. They’re not taught that. They don’t consciously think about that.”

Oster, who has been with A.J. Renner for about seven months, said it was the relationship-building skills he learned about at the workshop that he found most valuable. “I got a much better understanding of the relationship between wholesaler, agent and underwriter,” he said. “I got lots of hints and tips about how to have an underwriter view your risk, [and] not put it to the bottom of the stack, especially if you don’t have the best rapport with an underwriter. It seems like you’re always hounding and asking for something.”

Tips Oster took away included including a stronger narrative along with his submission and making phone calls instead of writing e-mails. Another tip Oster has used was to get out ahead of bad news with agents. He learned recently that a fiscal audit showed an insured owed $40,000. Oster e-mailed the retail agent and immediately followed up with a call to deliver the bad news personally so the agent could be prepared to talk with his client.

“Now I’m trying to call agents even if I don’t have to,” Oster added, “just to make sure everything’s going all right.”

A sound investment
Gamini, who is in her first year as a broker after more than 10 years as an underwriter, did complain about the lack of diverse viewpoints, since nearly everyone who participated in a panel discussion or gave a lecture was a Shand employee. According to Lopez, it’s not clear whether Shand will continue to teach the course or another firm will step in. This was only the second year the course had been offered.

As for the big $50 prize, Oster was asked whether he had safely stashed the money into a no-load mutual fund or similar far-sighted investment.

“Nah,” the lively young man said. “I invested it in some Coors Light.”

Welcome to the insurance business.
* The answer to 7 DOWN: nonadmitted.

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