At the annual conference of the Association of Managing General Agencies (AAMGA) now underway in Boca Raton, Florida, attendees are very much attuned to what’s going on up north in Washington, D.C.
What do AAMGA members think about what’s going on in Washington? What do those in Washington know about the role of the surplus and specialty lines insurance businesss? What effect is the economy having on AAMGA’s meeting?
Incoming AAMGA President Curtis Anderson, who is also president of national binding/programs for Risk Placement Services Inc., spoke with Insurance Journal’s Andrea Wells to answer these and other questions. RPS, based in Itasca, Ill., is one of the nation’s largest wholesale insurance brokers.
(Insurance Journal is serving as the official social media sponsor of the AAMGA conference. IJ National Editor Wells is posting live Twitter and Facebook updates of the conference that can be seen at www.insurancejournal.com/aamga. For more information or assistance with accessing Twitter or Facebook, contact Mitch Dunford at firstname.lastname@example.org.)
Insurance Journal:: Given today’s economy and market, has the AAMGA noticed a drop in conference attendance?
Curtis Anderson: Attendance is down a little bit, but it’s actually right on what we budgeted for. We are pleasantly surprised. I think many of our members, and definitely our associate members, all understand the necessity and the benefit of getting together all at one time, in one place, to create new opportunities and understand what is going on in the marketplace. A lot of the conversation is not just about the insurance marketplace these days. It’s the overall economy that’s impacting the insurance marketplace, as well.
IJ: There are a lot of things happening this year on Capitol Hill. What is AAMGA keeping an eye in Washington, D.C.?
Anderson: We have a very active association. First of all, our executive director is a lawyer and does understand Washington. He doesn’t so much act as a paid lobbyist for us, but is very active in the Washington area. We have a very active governmental affairs committee with people from around the country. They could be our active agent members, or they could be our associate members from the companies.
It’s just a grassroots effort to make sure that everybody’s on top of what is occurring, what’s going on. Then that committee pursues it and then goes to the members in those states for help where need be.
We’ve been very active, along with other associations, in the issues, which are the Soto issues going on in Florida. I think the efforts, combined with a bunch of people in numerous associations have actually gotten that issue resolved.
IJ: If the federal government plays a bigger role in regulation of the insurance industry, how would that impact MGAs?
Anderson: First of all, I’m not sure the federal government can do what they want to do because the state system works very well. We don’t know exactly now what it is they want to accomplish, whether they want to be federal completely, or they’re going to just have more federal oversight and still leave the state system in place. But anything that attacks the surplus lines industry itself could be negative for our membership. We’ve always been this stopgap. People go to the standard market, and if they can’t get coverage there, where do they go?
Our industry is that stopgap. Although it’s a very important piece of the industry, it’s still a small piece of the industry. It keeps an awful lot of businesses, new businesses, able to start. … To regulate us more would eliminate the flexibility … that makes the surplus lines industry and the MGA system so vibrant.
IJ: Do legislators have a good understanding of the surplus lines industry? Do they understand what you do and the difference?
Anderson: Some of them understand it well, but that would be a minority. That’s one of the things that our governmental affairs folks and our marketing committee work on diligently, along with other associations, such as NAPSLO, or PLUS, or Target Markets.. All of those are trying to educate the legislators, so that they truly do understand what our piece does. We’re also working with the retail associations because they have the same issues. They’re being fired upon by the legislators who don’t understand how insurance works.
They, our retail customers, understand the importance of the wholesale marketplace, so working with them also helps us to get the word out and educate legislators.
Every year, at our fall meeting … we bring in some legislators to have them talk about the things that are going on, but for them to also learn more about us. A lot of our members do that locally, as well.
IJ: Over the last couple of years, there has been some consolidation in the industry. I’ve noticed it in pretty much all different segments of the industry. Are you noticing, from the association level, more of your members merging, or being acquired, or even selling?
Anderson: Yes, as you said, there has been a serious amount of consolidation in the insurance company ranks, and the retail ranks, and also in the MGA, or wholesale ranks. Our membership, countwise, is actually fairly similar to what it’s been the last few years. As our members merge with each other, which reduces the membership, there are also new wholesale operations that are forming, or people that have maybe not been members of our association, that have either now become eligible or have decided that they needed to become a part of the association for multiple reasons and benefits to their business.
This trend, I think, will continue simply because you have an awful lot of people in the 50 to 70-year-old range that are figuring out what they do with their business. Some of them have got good perpetuation plans, and some of them don’t.
Insurance Journal is posting live Twitter and Facebook updates of the conference at www.insurancejournal.com/aamga. For more information or assistance with accessing Twitter or Facebook, contact Mitch Dunford at email@example.com.
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