The steady decline in the independent agent sales force is having a dramatic effect on the brokerage business today, and this realization was the impetus behind a breakout panel session at NAILBA 32 in Dallas on Friday.
The session, “Working with new markets,” focused on different ways BGAs can diversify their business. Panelists assumed that most BGAs at NAILBA 32 were heavily reliant on independent and career agents, figuring the channel accounted for between 70 percent and 90 percent of their business. Panelists warned that if BGAs don’t do a better job of diversifying, they run the risk of becoming irrelevant.
Panelist Carol Rando of PLAN Financial advised session attendees that if they really want to break into new markets, they must put a lot of time and effort into it. “Don’t consider it a hobby,” Rando said. “If you want to get into new markets, you need to focus on it.”
Rando said that breaking into the institutional market requires a heavy investment, but working with financial advisors can be very lucrative for BGAs who can gain access. Fellow panelist Dick Schuettner of Insurance Designers of America said that smaller BGAs are better off targeting local and regional entities for growth rather than going after national players like a Wells Fargo. “As an individual agency, you can’t really penetrate the institutional marketplace,” including wirehouses and banks, Schuettner said. “A single agency can have success dealing with local and regional organizations.” He identified smaller, regional P&C companies and local banks as opportunities for getting into new markets.