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NASSAU, Bahamas--Softening conditions in many areas of the commercial insurance market have standard lines insurers competing for business in areas that previously were the province of the excess and surplus market, but leaders of the association representing managing general agents see opportunity in the current market conditions.
"It's the old half full, half empty cup," Euclid G. Black, president of Black/White & Associates Inc. in Henderson, Nev., and president-elect of the American Assn. of Managing General Agents, said recently during the AAMGA's annual conference at the Atlantis Resort on Paradise Island in the Bahamas.
With the "surfeit of surplus" in the current market, "everyone's looking at new ideas," Mr. Black said. "If you're looking at the cup of opportunity, it's brimming."
Other top AAMGA officers speaking at the organization's annual gathering in May offered similar views.
"Companies have surplus. There's so much money out there and they're looking for ways to use it," said Scott M. Anderson, owner and executive vp of the Concorde General Agency in Fargo, N.D., and immediate past president of the AAMGA.
"There's always been a need to be flexible and adapt to changing market conditions," said Bernd G. Heinze, executive director of the AAMGA in King of Prussia, Pa.
And, said Thomas K. Albrecht, the AAMGA's new president and vp at Southern Insurance Underwriters Inc. in Montgomery, Ala., "We have the flexibility to make things happen."
"The way we do business as MGAs, we have the flexibility and wherewithal to make things work," he said.
The association's leaders noted that distribution can be one of the biggest barriers for companies looking to enter a new market, and MGAs are a proven commodity in distributing product. Also, many buyers are looking not just at rate but also service, they suggested.
Service, Mr. Albrecht said, "is one thing that we control. When someone is out there in the market trying to choose, it's often not just rate."
Those placing difficult risks will continue to look to MGAs, according to the AAMGA leaders.
"I personally believe the hard-to-place or the difficult markets are going to remain," Mr. Anderson said. "The smaller brokers are always going to be there and they have a need for the specialty products as well."
MGAs also provide stability to the clients they serve, as well as access to markets those clients might otherwise find unreachable, Mr. Black said.
"There is a role to play," he said. "There's the relationship piece and there's the market-access piece."
Working through MGAs, smaller retail brokers often can interact with more senior people at the insurance companies taking their risks than they might if they sought to place the business on their own, Mr. Black said.
The AAMGA leaders also are optimistic about passage of surplus lines regulation modernization legislation, currently pending in Congress.
"The House bill and Senate bill enjoy very broad bipartisan support," said Mr. Heinze.
The association has been working with its industry partners to promote the legislation and respond to questions about it, Mr. Heinze said.
"There are a lot of different ways that legislation can be interpreted, but there is only one way to move forward together," he said. "That is to stay focused on the consumer."
Mr. Anderson noted that whether or not the federal legislation is enacted, the association wants to see creation of some mechanism providing for the single payment of surplus lines taxes on multistate accounts.
Mr. Anderson discussed one of the initiatives of his tenure as AAMGA president, Project 2017, "a working group to look at the future and figure out what are we really going to look like."
"I'm fully embracing that," said Mr. Albrecht, the new AAMGA president. "One of my major themes is going to be where are we going to be five, 10 years from now."
"From a governmental affairs standpoint, there's no telling what's going to happen," Mr. Albrecht said. "And we've taken a position in the past few years that we're going to be proactive on the Hill."
"There's no such thing in this industry as business as usual," said Mr. Heinze.
American Assn. of Managing General Agents gathered for their annual conference in May at the Atlantis Resort on Paradise Island in the Bahamas.