Online marketplace MarketScout and Glenn Hargrove, former CEO of Crump, Inc., have teamed up to launch MarketScout Wholesale (MSW), which will combine wholesale brokerage and managing general agency (MGA) services with new distribution technology.
Hargrove and MarketScout say they see a need in the marketplace for a wholesaler that conducts business in a different format than others. MSW will build on the MarketScout Exchange technology platform but offer more than access to markets.
“Our approach to business is to be an insurance facilitator and work with the retailer in a number of capacities,” said Hargrove. “We don’t want to just deal with individual transactions, but go beyond that and do consulting, product development and be a full service partner to the agencies we work with.”
According to Hargrove, MSW’s role will be to provide marketing capabilities and technology for brokers to help add value to transactions.
“We really are trying to reestablish a different value proposition for what it means to be a wholesaler and bring some different things to the table for wholesalers,” Hargrove said. “We are on a good path to put that together and look forward to going out in marketplace and proving that to everybody.”
Hargrove will serve on the MSW board of directors and as president of MSW, which is based out of Dallas, Texas.
“It’s a joint venture between myself and MarketScout,” said Hargrove. “It was really about bringing together my background as CEO at Crump and the traditional wholesale brokerage model. We wanted to build a wholesale market that uses the traditional practices but also brings in new ways of operation.”
In addition to Texas, Hargrove said MSW plans three regional offices– western, central and eastern – and those will become fully operational in a few weeks. MSW will eventually build out those regions.
MSW plans to offer about 10 to 12 products at some point, but it is currently focusing on professional liability and financial lines. Hargrove said there are not any classes MSW will not touch, as long as the circumstances are right.
“MSW is really built on the people first as opposed to the classes,” he said. “My approach is to look at it and if I have a quality team and a group of people that have a good reputation and understand the business, we will do it. If we don’t have the talent and the people, we won’t go into that area. But there is nothing off limits at this point.”
Despite the soft market, Hargrove said he thinks MSW will be able to differentiate itself from the competition in a couple of ways.
“Number one is we are offering a different business model with different services involved,” he said. “The other aspect is that we are independently owned and don’t have debt service or financial institutions that are controlling our operations, which gives us the ability to control the plan of how we build out the business. Our focus is building quality and relationships. We don’t have an overall growth goal of how big we need to be and we are not trying to capture massive amounts of market share.”
MSW will be different than the MarketScout Exchange, which works as an online marketplace for agents to access different coverages through market specialists. However, MSW will use the technologies that MarketScout Exchange has developed, Hargrove said.
“The technology and ability to use the e-commerce platform they have is a significant advantage,” he says. “Will be a wholesale operation that will take advantage and be part of MarketScout Exchange.”
MSW will also provide wholesale solutions to The MarketScout Exchange.
Hargrove said some of the challenges in the current insurance cycle have blurred the roles between wholesalers, retailers, carriers and surplus line markets, which has created problems for those involved. He said this put pressure on all players in the chain to establish their value position.
“You need to clearly be able to define what value you are bringing to the table to be involved in that equation,” says Hargrove. “It is a challenge that is healthy to the industry, but it will take people awhile to sort it out.”
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