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IF Perspective: Face time

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IF Perspective: Face time

Success in the highly specialized market of excess and surplus lines insurance requires more than sound underwriting judgment. One way to be successful involves a company's ability to differentiate itself within the marketplace—an opportunity created from the "human connection" that results from quality face-to-face time.

Accordingly, San Antonio-based Argonaut Group Inc., a national underwriter of specialty insurance, developed a program called "Walk a Mile in Your Shoes." The program was designed as a vehicle to smooth the path toward financial growth for Argonaut and its key wholesale agents and brokers.

"Walk a Mile in Your Shoes" is in the pilot phase at Colony Group, an operating entity within Argonaut's excess and surplus lines segment, with offices in Richmond, Va.; Scottsdale, Ariz.; and Denver. Colony focuses on difficult risks that the standard insurance market is unable to underwrite, for any price, due to the unique risk characteristics of the insured, which may be caused by physical perils, nature of the business or the insured's loss experience.

Many insurance experts agree: This industry is all about relationships. For excess and surplus lines carriers, it's especially true. Relationships with wholesale agents and brokers are vital for continued financial growth. According to a release from Bain & Co., "strong customer initiatives are the most important prerequisite for solid revenue growth and total returns." Boston-based Bain, a global business consulting firm, was commenting about its comprehensive study of property and casualty insurance providers.

BRAINSTORMING

Responding to this reality, Argonaut Group executives met in San Antonio to explore innovative ideas for improving customer focus. Initially, the executives considered sending underwriters to key customers with the goal of identifying their needs more clearly.

Ultimately, Argonaut Group's Marketing Round Table, a group comprising marketing and sales staff from various segments of the company, spun this idea 180 degrees and "Walk a Mile in Your Shoes" was conceived. Colony Group was chosen to run the pilot program inviting wholesale agents to visit Colony as part of the vehicle for creating a superior customer experience. The visits primarily would focus on forging better relationships between wholesale agents and their Colony counterparts with whom they place business on a regular basis.

One of Colony's largest wholesale customers is Hunt Valley, Md.-based All Risks Ltd. As a wholesale agent representing thousands of retail agents across the United States, one of All Risks' roles is providing access to excess and surplus lines for retail agents whose clients' insurance needs cannot be met in the standard insurance market.

All Risks partners with various surplus lines carriers to gain access to as many markets as possible and better serve its customers, the retail agents. "We need to have markets, or we don't have business. Understanding each carrier better helps us write more business and build better partnerships," said Sharon Denzler, corporate trainer at All Risks.

The "Walk a Mile in Your Shoes" program enables wholesale customers, such as All Risks, an invaluable opportunity to better understand Colony's underwriting appetite and learn more about what Colony is looking for from wholesale agents and brokers. Ultimately, wholesale agents need access to lots of different markets in order to write more business, and only surplus carriers can satisfy certain client needs. Understanding Colony's business increases All Risks' ability to place business compatible with Colony's risk appetite while building a better partnership for the future.

All Risks was the first customer presented an opportunity to walk a mile in Colony's shoes. The "mile" stretched over a two-day period, offering four new agents and brokers from All Risks a chance to experience many aspects of Colony's day-to-day operations at its Richmond headquarters.

On the first day, the trainees were invited to Argonaut Group's quarterly communication meeting. At this meeting, they were introduced to Mark E. Watson III, Argonaut's president and chief executive officer, and were shown Colony's business activities and results.

Later in the day, the trainees were introduced to their Colony counterparts, giving them an opportunity to place a face with a name for individuals they will exchange e-mails and telephone calls with on a daily basis. Meeting the Colony underwriters and learning about their unique preferences in how business is submitted facilitates future business transactions and was met with enthusiasm on both sides.

The Colony underwriters reviewed practical issues involving Colony's operations manuals, documentation standards and strategies to best navigate Colony's information system used by these agents to conduct Colony business. "When placing future business, these agents will have the ability to choose from four or five different carriers depending on the market," said Ms. Denzler, "and they will choose—all other things being equal—the carrier they have developed the best business relationship with."

GOING ONE BETTER

Last November, a second key customer—Naperville, Ill.-based Benchmark Management Group Inc.—participated in a more comprehensive version of this program. Benchmark's "mile" spanned a four-week period and involved just one recently hired wholesale agent. The first week consisted of a general rotation through key Colony departments, including an introduction to the nuances of its 11 unique underwriting divisions.

The final three weeks were spent in the contract department. This department oversees underwriting performed at the wholesale agency on behalf of Colony. Colony grants limited underwriting authority to agencies that have underwriting capability. Such agencies have the ability to receive submissions from retail agents, rate, and quote and bind coverage on behalf of Colony.

While in this department, the agent conducted agency audits, reviewed new submissions, corresponded with wholesale agencies, reviewed renewal business for continued acceptability and participated in premium audits. Most importantly, however, the agent developed trust and confidence in her Colony counterparts.

Historically, when asked about customer service, "nearly eight in 10 senior financial service industry executives believed their companies offered a superior customer experience. Yet just 6% of their customers agreed," said Ingo Wagner, head of Bain's financial services practice.

"That tells me that Colony has an opportunity to greatly improve our customer experience," said Dale Pilkington, president of Colony Group. "Today, Colony is 10 times the size it was 10 years ago and 'Walk a Mile in Your Shoes' is just one avenue for us to continue that trend."

EVERYONE WINS

The advantages of the "Walk a Mile" program come from both business entities that participate. Wholesale agents develop trust and confidence in Colony through better relationships with their underwriting counterparts. Colony differentiates itself from other E&S carriers and increases the probability of receiving appropriate submissions from their key wholesale agents and brokers.

"A program like 'Walk a Mile in Your Shoes' is an opportunity to forge new relationships, deepen our partnerships with clients and achieve mutual success," said Mr. Pilkington. IF

Doug Grant is senior vp of marketing at Richmond, Va.-based Colony Group, an operating unit of Argonaut Group Inc.'s excess and surplus lines segment.