AAMGA Special Section

UFO helps prepare next generation

Under Forty Organization offers variety of learning experiences

By Phil Zinkewicz

Members of AAMGA’s Under Forty Organization (UFO) play PRIME, a computer-assisted management exercise which helps them learn how insurance companies operate.

When the AAMGA’s Under Forty Organization (UFO) was formed 15 years ago, the purpose was to provide younger members of the association with the opportunity to communicate with the older, more seasoned veterans—to network with various industry leaders. Recognizing that the insurance market requires innovative and dedicated leaders, the AAMGA established the UFO in order to focus special attention on the younger group of talented professionals. Initially, only “under 40” relatives of managing general agents were permitted to join the UFO, but later the organization was opened to anyone under 40 who was employed by an AAMGA member.

“Membership is certainly growing,” says Harry L. Johnson, II of Johnson & Johnson, Inc., Mgrs. in Charleston, South Carolina, “but we’re also growing in posture.” Johnson, who is chairman of the UFO, says that, more and more, the organization’s members are showing their value to the AAMGA and to the insurance industry.

Networking with older AAMGA members is only one benefit of the UFO, according to Johnson. “The UFO elects its own chair and vice chairs for the Board of Directors; holds an annual meeting in September of each year; sponsors a reception open to all attendees at the AAMGA’s annual meeting in May; and conducts special education and leadership training sessions. Also, through the auspices of Lloyd’s of London and London brokers and company markets, the UFO has for the past three years organized a trip for 15-20 of its members to travel to London to interact, develop relationships and learn from their counterparts in the United Kingdom. Those trips were extremely valuable to our members. When UFO members visit Lloyd’s,” continues Johnson, “they sit for a while in the underwriting boxes at Lloyd’s. They follow brokers around the floor to get a first-hand feeling for how Lloyd’s works. This year, we organized a trip to Bermuda to allow our members to learn more about the offshore insurance arena.”

Johnson says that another example of how UFO provides learning experiences for its members was last year’s annual meeting in Napa Valley where UFO members played a game called PRIME, a computer-assisted management exercise designed to acquaint participants with the decision-making process involved in running an insurance company. Participants were divided into teams and each team represented the management of an insurance company that had to make underwriting, staffing, financial and reinsurance decisions during the course of an eight-hour exercise. The teams’ collective actions shaped the competitive environment for each particular session.

PRIME, offered by Gen Re, is based upon a computer simulation of an insurance marketplace containing multiple insurers. Each insurer consists of a management team that controls the pricing of each line of business written by the company, commissions paid to producers, capacity offered, underwriting staffing levels, investment and reinsurance strategies. The exercise usually encompasses four years of operations. At the beginning of the exercise, each team receives the company’s prior three year’s financial statements. The object of the exercise is to maximize adjusted surplus at the end of the last year of operation.

“The value of this type of exercise is apparent,” says Johnson. “Many of our members have never been on the carrier side of the business. This was an opportunity to discover and get to understand what senior management goes through in the decision-making process. So, you see, UFO has grown from being only a networking organization—which is still important in and of itself—to an organization that stresses learning. Our members learn from traveling to other markets and from educational sessions like the Gen Re exercise. We’re not only growing in membership,” says Johnson, “we’re growing in ideas that help us be of more value to the AAMGA.” *