TECHNOLOGY
AgentSecure gives small and rural agents unaccustomed access
to small commercial coverages and big brand carriers
By Len Strazewski
J. Russell Reid (left) is president and chief executive officer of InsureZone; Ed Gillman is president of AgentSecure.
Hurricanes haven't ripped through the Alabama coast in nearly 20 years, but the big national insurance companies that underwrite businessowners package (BOP) policies for Main Street businesses around the United States still avoid the area like a plague zone, says Jacquelin Lawrence, vice president of HDL Insurance Inc., in Foley, Alabama. This makes life tough for the small independent agency.
Founded in 1998, HDL has five employees and a business mix of 60% personal lines and 40% commercial lines, but the commercial property coverage and small business packages have been the agency's biggest headache.
"We don't get much attention from the national carriers down here, and their underwriters just won't write business here because we are in the hurricane zone--even though we really haven't had significant hurricane losses in many years. As a result, in spite of a growing business environment, we have a real problem placing coverage here.
"Sure, there are plenty of surplus lines brokers and unadmitted carriers, but an agency always wants the best coverage and terms for their clients, so we have to fight for the best we can get. But it hasn't been easy," she says.
However, in late 1999, HDL made a small business coverage breakthrough, Lawrence says, when it signed on as one of 43 agencies to test the prototype of a fledgling Internet insurance marketer, AgentSecure, based in Alpharetta, Georgia.
AgentSecure brought HDL more than just another source of online applications to insurers that would reject coverage. Though not a windstorm or coastal solution, it opened the door to coverage at the reasonable rates available to other businesses around the rest of the country, Lawrence says.
"Small business customers in remote locations come out the winners. They now have more choices from the best carriers and ... with their trusted local agent ... [can] make informed purchases."
--J. Russell Reid
With the acquisition of AgentSecure, J. Russell Reid expects InsureZone to continue developing other opportunities for the combined Internet programs.
Founded by Ed Gillman, president of Gillman Insurance, Inc., a long-time agent in the Atlanta area, AgentSecure was designed to provide small and rural agents with access to national insurers and small business package policies. The project was rolled out nationally last year with five employees and coverage available from three national insurance companies.
Since then, it has been growing rapidly, thanks in part to a key business merger and endorsements from state independent agent associations. The online agency now has access to about 7,500 agencies nationwide through these connections, according to the company. About 400 agents are actively using AgentSecure.
"We were one of the first agencies to sign up with AgentSecure after we saw an ad in an agent trade publication (Rough Notes)," Lawrence says. "CNA was one of the first carriers to support AgentSecure and we were interested in trying to do business with CNA.
"In the past, the carrier wasn't interested in us because of our size and location, but through AgentSecure, we began placing business right away. Since then, AgentSecure added The Hartford and Zurich North America Small Business, so we can offer our customers some choices as well as insurance companies they recognize and trust."
The online agency specializes in small commercial policies, such as BOPs, workers comp, commercial auto and umbrella, that can be rated at the AgentSecure Web site. HDL Insurance's Lawrence says the application process was easy--the second time she tried it. "Online applications take little getting used to, but once you've used it successfully, the process is fast and efficient," she says. AgentSecure representatives report that the application process was updated in September 2001 and now offers a dynamic application in which the line of questioning--and therefore the length of the application--will change "on the fly" according to the applicant's business class and other variables.
Lawrence says she's also pleased with the commission rates from AgentSecure which are higher than those paid by regional surplus lines brokers and carriers.
AgentSecure founder Ed Gillman says the market access problems faced by HDL Insurance are common to many small agencies around the country. It's difficult for these agencies to meet the volume and underwriting standards set by the largest insurance companies. As a result, these agencies are frustrated in meeting the needs of their customers and competing with larger brokers.
"Typically, a smaller or rural agency has only one major carrier and a few regional carriers, which limits the number of protection options that these agencies can offer its small business customers," explains Gillman. "To profit in this marketplace, these agencies need an outlet through which they can efficiently access policies from big brand carriers. AgentSecure gives them that, with a generous commission structure and no premium volume requirements."
The online relationship also works well for insurance company participants, says Bill Griglock, senior vice president of marketing at Zurich North America Small Business in Baltimore, Maryland. He says the relationship with AgentSecure brings the carrier a flow of small business risks from agents that otherwise would not qualify for standard Zurich agency contracts.
"AgentSecure extends our reach into a huge pool of business that we would otherwise miss and gives us relationships with agents that have the confidence of more than 7 million small businesses," he says.
AgentSecure recently increased its array of insurance coverage and service options with a key business deal. In June, AgentSecure was acquired by InsureZone, a multi-channel agency based in Fort Worth, Texas, that markets a broad spectrum of insurance coverage and services, including turnkey e-commerce partnerships for other agencies, financial institutions and Web portals.
Founded in 1999, with venture capital from Buena Venture Associates, InsureZone is built around the insurance sales and marketing resources of Higginbotham & Associates, Inc., one of Fort Worth's biggest agencies.
Ed Gillman, president of AgentSecure, has been a long-time insurance agent near
Atlanta, Georgia.
The company also has a comprehensive Internet presence featuring an XML-based Internet technology platform that can be used to accept coverage application information via online rating from a variety of Internet sources, says J. Russell Reid, president and chief executive officer of InsureZone.
InsureZone also partners with brokers, banks and Web portals to provide small business customers with multiple quotes and products from its own roster of national insurers along with a Web-enabled customer contact center to deliver expert advice to agency clients 12 hours a day, five days a week, using instant call back, online chat, e-mail and fax.
"InsureZone was attracted by the AgentSecure first-to-market presence, its growing number of member agents and exclusive marketing alliances with some of the key state associations within the independent agency system," Reid says.
The two companies' goals were very compatible, focusing on small business customers and the resources of national insurance companies.
Small business clients are a fast-growing market for InsureZone, Reid notes. He cites a study conducted by Meridien Research that indicates that companies with 50 or fewer employees will generate more than $43 billion in premiums this year and $46 billion in 2002.
"Our acquisition of AgentSecure is another step toward our goal of making it easy for small businesses everywhere to buy high-quality, cost-effective insurance from the source most convenient to them," Reid says.
Reid notes that the technical expertise and quality service provided by independent agents are critical to this mission. "I envision a future in which our banking and portal partners may elect to give their customers the option of a face-to-face visit with a local agent," Reid says. "Through our AgentSecure network, we could provide that interaction."
Because AgentSecure is now a wholly owned subsidiary of InsureZone, the AgentSecure carrier platform has expanded to include AIG, Kemper, Safeco, and St. Paul. Gillman continues as president of the subsidiary and a leader in the continued growth of the combined companies, Reid says.
"Small business customers in remote locations come out the winners. They now have more choices from the best carriers and they can rely on their relationship with their trusted local agent to help them make informed purchases," he says.
AgentSecure also continues to strengthen its ties to the national independent agency system. In August, AgentSecure added five new state association co-marketing endorsements, bringing its total to nine, including Alabama, Arkansas, Georgia, Kentucky, New York, Oklahoma, South Carolina, Texas and Virginia.
The Eagle Agency, a managing general agency created for members of the Independent Insurance Agents of America (IIAA), has also signed a letter of intent to develop a co-marketing agreement with AgentSecure. The Eagle Agency provides agents in Alabama, Delaware, Georgia, Nevada, Pennsylvania, South Carolina, Tennessee, Utah, Vermont, Virginia and Washington access to standard personal lines markets without volume commitments. Through AgentSecure, Eagle agents can gain access to a comparable solution in the small commercial arena.
"By co-marketing AgentSecure's small commercial offering, we're providing our 300 Eagle agencies with the ability to offer consumers expanded coverages with key companies, while still maintaining policy ownership," explains P.J. Peters, Eagle Agency program director."
InsureZone's Reid says the AgentSecure acquisition triggers a period of expansion for the company as they develop other opportunities for the combined Internet programs. He expects the company to expand its small business coverage products to include directors and officers liability (D&O) insurance, professional liability coverage, employment practices liability, group life/health/disability, and bonds.
Reid and Gillman also have developed a companion Internet marketing program for large brokers using the BrokerSecure product name. *
For more information
Contact: Ed Gillman
Phone: (800) 684-0268
Email: ed@agentsecure.com
Web site: www.agentsecure.com
www.insurezone.com