The insurance business is undergoing a seismic change. For the past several years, there has been a significant migration of insurance intermediaries — that is, agents, brokers, and others who sell insurance products — away from many of the traditional insurance carriers. Often, the cause of this shift is the large number of products from those carriers that offer relatively low value and returns to consumers and are, therefore, frequently “unsellable.”
This migration has been an important factor in the development of numerous new inter-company agreements, or “deals,” between traditional insurance companies and mid-market specialists, as these companies try to find new ways to secure new premium growth and increased profitability. Some of these inter-company arrangements end up becoming traditional merger and acquisition deals, but many others are marketing partnerships or consultancy arrangements of one kind or another.
These kinds of arrangements, though not new, do seem to be picking up a lot of momentum. The increasing interest in these inter-company deals has led to the emergence of many traditional insurance companies swimming in new waters, and these ventures into a new way of doing business are always easier when they’re aided by personal relationships and personal networks.
It’s not news that industry organizations and conferences help foster these kinds of relationships and networks. For me and my firm, and for many others like us, the Inter-Company Marketing Group (ICMG) is one such organization. As the name suggests, their reason for being is to foster relationships that lead to inter-company marketing arrangements, and their annual meeting is one of the best for the purposes of networking.
If you’re unfamiliar with the way inter-company deals might work, there are actually many, many ways that a deal can develop — as many ways as there are companies with different business approaches. Likewise, there can be many reasons why a specific deal might develop in the first place. In general, these inter-company deals happen when Company A has a product or market or distribution system in place, as does Company B, and the people at the two companies see the value in putting their heads and resources together to complete a marketing agreement that will benefit both firms.
These new inter-company collaborations are typically forged by a chief executive officer or a chief marketing officer who is seeking to expand the opportunities available to his or her known brand. For example, the chief marketing officer may have a very strong critical illness product, but his or her company has no annuities for the firm’s producers to sell. If he or she develops a relationship with another marketing officer and learns that the second company has a great series of annuities and a field force that would love to have a solid critical illness policy to sell, the value of a marketing partnership between the two becomes clear.