DALLAS—Fresh off his two-year noncompete agreement with Crump Group Inc., former CEO Glenn Hargrove is embarking on a new wholesale brokerage venture he says will offer retail brokerages an alternative to traditional wholesale relationships.

Together with Richard Kerr, CEO of online wholesaler MarketScout Inc., Mr. Hargrove plans to launch Dallas-based MarketScout Wholesale in the second quarter and build the operation from scratch by recruiting individuals and teams of people.

MSW will become the wholesale arm of the 10-year-old MarketScout insurance exchange, which is used by more than 40,000 registered retail agents/brokers and other users to access qualified insurers. MSW also will operate independently in the market.

Acquisitions are part of MSW's growth strategy, though not initially, said Mr. Hargrove, who left Dallas-based Crump in January 2008, roughly two years after Marsh & McLennan Cos. Inc. sold Crump to private equity firm J.C. Flowers & Co. L.L.C.

“Our strategy is going to be on a very controlled and specific basis,” he said, noting that he's identified about a dozen initiatives to build out MSW. “How many we end up doing in the first year is solely dependent upon how many we feel we can do in a rational and controlled manner and put them on a footing for good success going forward.”

Mr. Hargrove, who serves as president of the new venture, said MSW is backed by individuals who have made private investments in the firm.

“Our goal is to be a long-term player and to build a quality player and hopefully show people a different way of how wholesalers can operate and bring something different to the table,” he said.

To do that, MSW will leverage the technology from MarketScout's insurance exchange in its business model. “It's not going to be point-click-and-bind status, but we will incorporate a lot of the ease and use of those technologies and platforms,” he said.

Moreover, MSW also plans to differentiate the way it serves its clients.

Rather than just provide products and services and market access, for example, MSW is looking to form strategic partnerships with retail brokers and help them build their businesses, Mr. Hargrove said. He noted that, in some cases, MSW may act purely as a consultant to help the retail broker build a new specialty program or specialty operation.

“We want to be with our retailers from the ground up to help them build their business as opposed to offering a set of products and waiting for someone to walk into our storefront and want one of them,” he said.

MSW also will take a “more selective approach” with its markets and will implement a teamwork-based approach and compensation plans with its own producers that are designed to drive institutional value, Mr. Hargrove said.

Mr. Kerr said that the decision to launch MSW was made when “the stars lined up just right and we were able to get Glenn Hargrove on board as president.”

“Glenn is a seasoned veteran with incredible experience who can build MSW into a real force by blending traditional methods with the new innovations that are breaking out in insurance distribution,” Mr. Kerr said. “Glenn's ability to assemble exceptional teams of people with new ideas, innovations and a blue-sky approach to building a better wholesale broker was incredibly appealing.”

Ken Crerar, president of the Council of Insurance Agents & Brokers in Washington, said, “whenever someone like Glenn gets time off to think about things, they always come back with improvements” to the system. “I think everybody will watch what Glenn does, and it may indeed change some of the game.”

Specifically, Mr. Crerar said he applauds Mr. Hargrove's efforts to strengthen relationships between the wholesaler, retailers and underwriters.

“The more focus you have on them, the better results you get in terms of providing” everyone—including the ultimate insurance buyer—what they need, he said.

Gary Heiligman, an assistant vp with Big I Advantage, the Independent Insurance Agents & Brokers of America Inc.'s for-profit arm, said “most wholesalers' focus...is on market access” rather than on the retail agent or broker.

“Small- to midsize agencies could benefit from an entity that provides additional support, there's no doubt about it,” he said. But it's not a new concept, he added. There are entities, including the Big I, that offer market access, as well as other services, to retail agencies.

Timothy J. Cunningham, a partner with OPTIS Partners L.L.C. in Chicago, noted that, regardless of its business plan, MSW is “sailing into heavy winds.”

“The wholesale space is relatively crowded, the prolonged soft insurance market continues and typically retailers have relationships with wholesalers that are difficult to supplant,” he said.

At the same time, he said he doesn't necessarily see the existing wholesale brokerage model as being “broken.”

“Good wholesalers deliver value-added, but like any business there's good, mediocre and bad. The retail space remains very fragmented, and one retailer's perspective of value added may not be the same as another's,” Mr. Cunningham noted.