The question facing brokerage general agents (BGAs) today is how to keep existing customers while also finding new customers, according to Barbara Crowley. She is the 2014 chair of the National Association of Independent Life Brokerage Agencies (NAILBA).
Customers in this case are not consumers, but producers who provide insurance products, service and guidance to consumers. The BGA’s business purpose is to help its producer customers place cases with carriers.
As BGAs look for growth opportunities, they will continue to do what they normally do, Crowley said in an interview with InsuranceNewsNet in advance of her chairman’s address at NAILBA’s annual meeting in Hollywood, Fla. What BGAs normally do is provide access to products, services and underwriting to agents and other producers in the independent distribution channel.
However, some BGA firms are adding other types of producers to their customer list, said Crowley, who is president and CEO of Brokers Clearing House, West Des Moines, Iowa. These other producers range from big companies like property/casualty firms and banks to wealth mangers and independent advisors who have securities licenses.
The property/casualty and bank channels have been in the life insurance market for a long time, she allowed, but some BGAs are entering alliances with them now as part of their efforts to find new customers on a large scale.
The demand for broader services
Other firms, such as wealth managers and financial advisors, are more recent entrants into the insurance marketplace. Clients of these firms “are demanding something broader” than, say, just being able to buy an auto policy or a bank certificate of deposit. Some want to talk about life, long-term care and disability income insurance, for example.
“We are hearing that more and more,” said Crowley.
The result is that “wealth managers and advisors want to be able to talk about insurance with their clients” since the clients are bringing up the topic. If the firms don’t have this capability, they risk losing clients to competitors who do offer insurance, she cautioned.
That pressure creates a complication for executives at many of these firms. “These are not people who get up every morning and think about insurance,” the NAILBA chairman said. “In fact, they stay away from insurance.” But since clients are asking for help with insurance, some of those professionals are turning to BGAs for assistance.
“That is an opportunity for us. It will help us grow in a new direction,” she said.
This entails training
Crowley said her own firm has been building up business with wealth managers and advisors in recent years. This is a different kind of work than providing independent agents with quotes, she pointed out. It requires the BGA to offer specialized training and education to the professionals.
“Five years ago, these people wouldn’t even talk to us,” she recalled. “But now, the relationship is evolving. They want to provide a more holistic approach for their clients so they want to offer insurance. But they want the hand-holding, because they don’t want to learn the details about insurance.”
Three broad types of BGAs are taking steps to add other distribution channels. One is the “boutique” BGA, such as Crowley’s firm. A boutique BGA is a smaller brokerage that specializes in certain areas and meets unique client needs.
Another is the large brokerage firm that may do mass marketing and direct marketing, and otherwise engage with client companies on a national scale.
The third type is the specialty firm, which tends to work with one market, such pension profit sharing firms, wirehouses or banks.
In order to provide the training and support that wealth managers and advisors need, Crowley said that boutique BGA firms like hers need to learn more about how to provide training to producers. “For that, we need the carriers to equip us with training packages and turnkey opportunities that we can offer to our producers.”
Given that the pool of independent agents is shrinking, carriers will likely be interested in providing these resources, she predicted. “The market is changing and regrouping. They will need to react.”
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