The owners and producers of Japan’s estimated 300,000 insurance agencies can only dream of the success and freedom that the 40,000 independent agencies in the U.S. enjoy.
But they can still learn best practices from U.S. agencies to help them build toward the day when they might have enough clout to earn some of the same independence and success.
Once a year, the Independent Insurance Agents and Brokers of America (Big “I”) hosts agents from Japan for a series of management seminars and a tour of successful U.S. agencies.
Peter van Aartrijk, CEO and managing director of Aartrijk Branding Group, and Sue Noda, executive director of the Independent Insurance Agents & Brokers of Japan, accompany the agents on the tour. This year they stopped in on agencies on the East Coast including Antalek & Moore in Beacon, N.Y., and Lyons Companies in Wilmington, Del.
Noda, who is based in San Francisco, acts as translator for her 100 or so members not only during their U.S. visit but also throughout the year reporting on what is happening in the U.S. “I provide all the good ideas of what the U.S. independent agents are doing every day, like best practice agencies, what they do. They improve their management, and also they improve their profitability,” Noda said.
There are major differences between the two countries in insurance markets, regulation and the role of agencies but the producers share an entrepreneurial spirit.
“[I]t’s a vastly different system that they have in Japan,” said van Aartrijk, “but the one thing that we have in common is that the independent agents really are wanting to be independent. They want to own their businesses. They want to grow their businesses.”
Noda said the market has been consolidating in Japan. There used to be more than 50 carriers for agents to represent but, due to mergers, there are now only about three controlling about 90 percent of the market.
Independent agencies in the U.S. are defined in part by the fact they own their policy expirations and can control where their business is written. Japanese agents do not own their expirations, according to Noda. “That’s a big problem,” she said.
It’s not the only problem. Most Japanese agencies are small and don’t have anything approaching the automated agency management systems and standardized ACORD forms that U.S. agencies use.
“They were very much impressed with how quickly they could get their work done,” Noda said of the Antalek & Moore agency in New York that had a real-time agency management system.
The tour is meant to expose the Japanese agents to a variety of ideas they can bring back home.
“[E]ach agency we visit does something really well. They might have a really good agency management system. They might have good management practices that pay producers well and get the right kind of business. But the variety is what we try to do for them, to get some variety so they see the flexibility and independence of the system we have here,” said van Aartrijk.
Van Aartrijk said Japanese visitors were very interested in the aggregators and cluster efforts here in the U.S., perhaps, he suggested, as a way for them to grow their own businesses. “They’re really curious about how to grow. It’s hard to grow in Japan right now. But the smarter ones are here, and they’re learning ways they can grow,” he said.
Van Aartrijk said that there is potential for the Japanese Big “I” to have 20,000 members, which might allow them to gain more leverage with the carriers and the regulatory system in Japan.
“There is a lot of work to do. They are desperately in need of a good agency management system. They need ACORD forms. They need a better way to get to the companies over there because they can’t do the proprietary company screens that we got rid of here a decade or so ago,” he said.
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