New MGA Sees Opportunity for Independents in Growing Hispanic Market

By | May 16, 2011

With 30 years of insurance industry experience under his belt, one Texas-based insurance executive decided recently it was time to open his own operation to serve the insurance needs of the growing Hispanic population. While Dallas-based Hispanic Affiliates General Agency (HAGA) opened its doors earlier this year, the project has been years in the making, explained Tony Gonzalez.

Having served in executive roles with insurers that utilize the independent agency distribution channel of the property/casualty insurance business, such as Safeco and The Republic Group, Gonzalez’s expertise extends from marketing to sales to commercial underwriting and more. Now he’s adding company owner to his list of accomplishments.

The 2010 census shows that the Hispanic population in the United States grew by 43 percent between 2000 and 2010. In Texas, the census revealed a population increase of 4.3 million throughout the decade; 65 percent of the new Texas residents are of Hispanic origin.

Gonzalez believes this growing market is ripe for independent agents to explore as currently most Hispanics fill their insurance needs – for their homes, automobiles and businesses – via the captive side of the insurance industry. To tap into that opportunity, Gonzalez is actively recruiting Hispanic retail agents and aims to provide them with products and services, and access to admitted insurance markets, with which they in turn can serve their Hispanic customers.

Insurers would like to grow their market share with Hispanic consumers but are constrained by lack of an agency base.

While the 2010 census had some bearing on Gonzalez’s decision to launch HAGA this year, he said the idea for the business and plans for its implementation have been on the drawing board for some time.

Creating Access

Insurance companies that serve the independent agency system don’t have a developed channel through which to reach the Hispanic community, Gonzalez said. And while many companies would like to grow their market share with Hispanic consumers, in many cases they are constrained by the lack of an agency base through which to reach those customers.

During his tenure at Safeco and The Republic Group, both companies had charged Gonzalez with developing initiatives to reach out to the Hispanic community. As a result of his research, Gonzalez realized the time was right to create a vehicle through which independent agency companies could access a new and growing market.

“The numbers were dramatic,” Gonzalez said. “What I found out was that most of the standard or preferred type business, middle and upper-middle class Hispanics were with the captive channel.”

In his recruiting efforts, Gonzalez is focused on Hispanic independent insurance agents. There’s a good reason for that, he explained.

“They are especially qualified to deal with that [the Hispanic] market,” he said. “They know … to a great degree I would say, what that market looks like. What they need to know about specifically, the target market that we’re going after, middle and upper-middle class, is who has it, why they have that class of business, and what I’m providing them in order to go head-to-head against the captive agency to pull those customers into the independent agency system.”

Capturing Insurer Attention

Gonzalez said the 2010 census has caught the attention of insurers, in terms of the growth of the Hispanic community.

“That bodes well for me, I suppose, in what we’re trying to do here. But companies need to believe that this is a good model for distributing their products,” he said. “If I were still on that side, that’s what I would have to answer.”

While some companies bought into the idea quickly, others are taking a wait-and-see approach.

“The big question for them is, and I’ve heard them say this, where is this business? What does it look like? And, can an MGA get access to it?

“So, there’s still work to be done on that end with regard to the insurance companies themselves. … Most get it. Some are still waiting,” he said.

Topics Texas Insurance Wholesale

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