Economic crisis brings need for strategic advisory boardsArticle added by Andrew Barile on May 19, 2010
Andrew Barile

Andrew Barile


Joined: August 21, 2010

The owners of retail insurance brokerage firms, wholesale brokers, and managing general agencies are facing an economic recession, as well as a soft insurance pricing market. Premium growth, as well as revenue growth, have not happened as well as expected.

The need for insurance experienced strategic advisory directors to advise owners on their best course of action moving forward has reached its highest levels. Your agency should establish a board of directors providing needed expertise to add value to your agency.

Strategic advisory boards provide agent owners with expertise in the following areas:
    (1) Access to insurance company markets. Newly formed "A" rated insurers are aggressively looking for specialty niche programs. National conferences, such as Target Markets, NAPSLO, and AAMGA, are testament to this happening. Even attendance at the National Council on Compensation Insurance Annual Symposium was booming.

    (2) Access to capital for organic growth or strategic acquisitions. The strategic advisory director must be aware of the private equity firms operating within the insurance industry space. Throughout the past several years, many major private equity firms have acquired retailers, wholesalers, and MGAs, enhancing the agent owners "roll-up" strategies.

    (3) Access to owning U.S. domestic insurance companies. The price of "shell" insurance companies due to the recession has leveled off. The experienced strategic advisory director can be retained to search out these new profit centers.

    (4) Access to owning offshore agent-owned captive insurance companies. The feasibility study to do an agent owned captive can be provided by the strategic advisory director.

    (5) Access to superior insurance personnel. Strategic advisory directors visit a significant number of insurance conventions all over the country, coming into contact with a great many insurance people at all experience levels and in all disciplines, from executive to operational.

    (6) Access to new sources of reinsurance capacity. The strategic advisory director is aware of new reinsurance capacity, especially with Bermuda startups.
Owners of retail insurance brokerage firms, wholesale brokerage firms, excess and surplus lines brokerage firms, and managing general agents all need a strategic advisory director for their boards. Agent owners need insurance-experienced directors to guide them toward future success.

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