When using a consultant to find company markets, there tend to be three types of agencies: those that have used a consultant; those that intend to use one; and those that haven’t — but wish that they had. This document by Andrew Barile looks at the value a market finder consultant can offer an independent agency.
The consultant can play a key role in preparing an Executive Profile of the agency to share with prospective company markets. The information in the Profile often generates more questions than it answers and requires intensive negotiations, especially in a hard market.
We were recently retained by an MGA that had lost its only E&SL market. We had to approach a number of surplus lines markets before finding the right cultural fit. Having access to a variety of markets offers a significant advantage in market finding.
The consultant must make a clear presentation of the agency’s program through all phases of discussions. Company CEOs and their underwriters, like agency principals, have limited time for such projects as market negotiations. Bear in mind that carriers usually must evaluate more than one program opportunity at a time and must decide on which opportunity to focus.
Presenting the program opportunity to the carrier consists of far more than describing the product. The agency must present the Executive Profile to a carrier that’s looking to write this class of business and has the resources to execute the program.
An effective market finding consultant should be well networked within the company markets community and able to communicate effectively with presidents and CEOs. Agency principals who try to negotiate their own agency/carrier agreements without help often find that the lack of a buffer between agent and carrier leads to failed discussions. A professional consultant won’t allow important issues to go unaddressed and negotiations to slowly fade.
An agent recently asked us to review a program and offer recommendations to keep the agency/carrier agreement alive. An experienced consultant can help agency principals by providing counsel on a disinterested basis.
Acting as an independent consultant to agency principals in finding markets is a highly specialized field. We believe that it takes the experience of individuals who have been through agent/carrier negotiations to understand how delicate the process is. Dealing with the nuances of a transaction from start to finish requires professional advice.
Andrew J. Barile, CPCU is president and CEO of Andrew Barile Consulting Corp., Inc., a national insurance and reinsurance consulting firm. Services include insurance company market finding for agents, merger and acquisitions, and litigation support consulting services to law firms.