There's no way around it: This is the information age. Twenty-first century brokerage general agents are beginning to jump on the technological bandwagon -- computers have revolutionized how we exchange information, which has placed tremendous stress on brokerage general agents. In today's environment, clients and producers expect information to be quickly transmitted. This has created tremendous opportunities for those BGAs who have embraced this and for the agents who work with them.
You can look at the BGA/producer relationship as more of a partnership than provider/customer relationship. A producer can be much more successful if they acknowledge what their BGA brings to the table and take advantage of the resources offered to them.
As a result, there are four areas of importance in taking advantage of today's technology: product, service, underwriting, and compensation. These areas should be among the criteria that agents use in selecting a modern BGA they'd like to work with.
1. Product
With the evolution of the Internet, many insurance products have become commodities. In many cases, consumers shop by price on the Web and are more tech savvy than they were 10 years ago. This can create more competition than there has been in the past. As a result, agents should make sure that they have access to numerous markets, if for no other reason than defensive purposes, and most BGAs can offer an agent one-stop access to all competitive markets.
2. Service
Service is probably one of the most important areas to analyze when choosing a BGA. This is where BGAs can vary drastically. A BGA who is responsive and has consistent and streamlined internal workflow processes and a good communication channel can mean the difference between placing a case or not. It is challenging for a BGA to work efficiently in the multi-carrier world, and a heavy investment in technology is the best way to do this. When looking for a BGA to partner with, it is important to keep an eye out for technology and what that means to you as an agent. Some questions to ask include:
o Does the BGA have a robust agency management system? An agency management system is the engine that drives the agency workflow. It makes for quick, efficient, and accurate communication among the carrier, the BGA, and the producer.
o Does the agency image files? Typically, cases can be processed more quickly, as the imaged files can be transmitted directly to the carriers' workflow.
o Does the agency have a Web site? This is an essential tool for producers working in today's world. You might want to look for quote engines and the availability of forms. Other areas that can be important to you are real-time case status, sales ideas, product information, online licensing and contracting, and commission information. The producer needs to decide which tools are necessary for them to run their practices. These tools can lead to huge savings for the producer because of the time that's saved by accessing this information.
Technology is important, but it is only as good as the people who run it. BGAs cannot expect to integrate technology and then have it run smoothly from the start. It should take significant effort to train staff members to use these tools. The BGA should be knowledgeable and responsive to your needs. With that said, a producer should look for an agency that has a stable staff with little turnover. It is important to develop a good relationship with the case managers, sales reps, and agency principals. These are your business partners, and they can workmagic for you.
3. Underwriting
One of the biggest pros of using a BGA is their success in helping you place tough cases. Look for a BGA who understands impaired risk underwriting and has a staff that is capable of this task. Often carriers are overwhelmed with trial files and cannot turn them around quickly enough. This has led to the "quick quote." A quick quote is a summary of medical records, provided by the BGA to various carriers, meant to get an indication of a possible offer. The accuracy of a trial offer relies on the BGA's ability to summarize the client's medical records. It is important for a BGA to have staff members who are trained to review and summarize medical records. The BGA should also have technology in place to efficiently shop cases to multiple carriers.
4. Compensation
It always amazes me when a producer's first question is, "How much commission will you pay me?" Obviously commission rates are extremely important as a business doesn't survive long without revenue. But the commission rate is unimportant if the BGA cannot provide you with an offer that can be placed within an acceptable time frame. Successful producers realize that it can be worth taking a commission cut of between 5 and 10 percent if they partner with a BGA who offers the complete package. A BGA's investment in staff and technology can lead to immediate savings to the pro-ducers who partner with them. Also, BGAs who are skilled in negotiating aggressive offers can lead to many sales that the producer would not have otherwise made. The bottom line is that while a producer should look for competitive commission, they need to weigh this against the rest of the package.
Doug Mishkin is president of Algren Associates Inc. He can be reached at doug@algren.com.
