Heading north

by Insurance Business Wholesale22 Oct 2015
The American Association of Managing General Agents has been looking north for its newest members.
The AAMGA has brought several Canadian MGAs under its umbrella, the first step in what the association hopes will be even more international expansion. Bernd G. Heinze, executive director of the AAMGA, said Canadian companies have been more enthusiastic about joining than he could have hoped.

“It’s going better than we could have expected,” Heinze said. “When we first approached the Canadian managing general agencies through Lloyd’s and found out there was shared interest there to do a collaborative membership, we were thrilled. We now have 12 Canadian members, and we’ve just received two other applications. So we have virtually all provinces, along with the maritimes, represented, and virtually all the larger managing general agencies in Canada.”

That works out well for the Canadians, too, since initial plans for a Canadian MGA association were turning out to be more complicated than expected.

“We were going to (start an association), but there aren’t that many of us,” said Nona McCreedy, owner of Aurora Underwriting Services in Edmonton, Alberta. “The cost and the work going into it became quite a big operation. So Hank Watkins, the Lloyd’s North American president, and Sean Murphy, the Canadian Lloyd’s president, suggested to us that perhaps we should talk to AAMGA, and AAMGA was very interested in making us a subgroup of theirs. … It saved us a great deal, and there’s no point in reinventing the wheel. AAMGA has been such an excellent organization and has done such great job that it’s a better vehicle for us right now.”

This cross-border alliance, however, won’t necessarily open huge Canadian markets for U.S. wholesalers and vice versa. Rather, says Heinze, it’s more about MGAs sharing competencies and forming a more effective voice for the industry.

“I think it provides us with an opportunity to collect all of the managing general agencies as well as all of the wholesale insurance professionals under the same umbrella so that when there are issues that impact the wholesale marketplace, we can have leverage to speak with legislators, regulators, courts and marketplaces with one voice,” he said. “I’ll give you a perfect example: Several years ago, one of the issues of doing business with Lloyd’s was that the contract with Lloyds had to be renewed on an annual basis. We said, ‘Why does this have to be done on an annual basis? Couldn’t we do a multi-year contract?’ So we worked on that opportunity with our colleagues at Lloyds, and (on Thursday), Lloyd’s released a new guidelines that said, ‘We are approving contracts for managing general agents and cover holders.’ That wouldn’t have been able to get done had we not been able to approach with a collective voice.”

McCreedy said membership in AAMGA also allowed Canadian insurance pros to share in the organization’s educational and social opportunities.

“It’s a tremendous opportunity for us to have relationships with like-minded people and like-minded businesses,” she said. “In Canada, without an association, there wasn’t the exchange of ideas and camaraderie, because we were competitors. By being part of AAMGA, we have the advantage of being able to access all of the things it already does. I was down in Washington at one of AAMGA’s conferences, and it was marvelous. It felt like we had a place to be. Talking with other MGAs in Canada, I think they all feel that way. We’re talking to people who have the same problems as us and the same successes, and that’s a real advantage.”

Heinze sees the addition of Canadian MGAs as a boon for their American counterparts as well.

“The world of insurance is extremely large in terms of the nature and scope of risks that exist. We need to look for continued ways to exploit those opportunities for the benefit of the risk holders and the risk takers. The community of the wholesale market, however, is a smaller one – and it’s continuing to contract based on mergers and acquisitions and other activities,” he said. “However, it is comprised entirely of entrepreneurs with unique and creative ideas. The more we can become diverse in exploiting those ideas for the benefit of the market, the better the market becomes overall. … Only by enlisting more MGAs and program wholesalers can we exploit those opportunities for the benefit of the market overall.”