Business relationships, differentiation from competitors, and passion and pride for both the business and the industry, are the keys to success in a soft market for specialty insurance, according to two different panels of executives – one made up of company executives and the other of principals of general agents – at the AAMGA University East, held Feb. 29 through March 2, at the Renaissance Hotel in Philadelphia.

The two panels were among the most well-attended courses offered during a weekend filled with a wide variety of educational opportunities, including agency management classes such as Driving Your Company, Business Income and Extra Expense, Workplace Management Issues, Employee Recruitment and Retention, and a Strategic Planning Panel. Other offerings included substantive courses such as Current Issues in Climate Change, Update on Trucking Regulations, Underwriting a Garage Risk, and the All You Can Eat Insurance Buffet, as well as professional development classes such as Interpersonal Skills and Public Speaking.

The CEO panel, offered Friday morning and moderated by AAMGA Executive Director Bernie Heinze, was comprised of four high-level executives from U.S. and international insurance and reinsurance companies: Thomas P. Nerney, chairman, president & CEO of United States Liability Insurance Group (USLI), Paul W. Springman, executive vice president, The Markel Corporation, Patricia Roberts, president and CEO, General Star, and Paul Goodwin, Senior Vice President-Chief Executive of National Clients of Munich Re America.

In four intense and lively hours of discussion, peppered with participation from the audience made up mostly of representatives from general agencies, as well as company representatives and students from Temple University’s Fox School of Management’s Risk, Insurance & Healthcare Management program, the members of the CEO panel offered their advice, experience and expertise on a broad range of topics, including the growing web of U.S. and international regulation, and the companies’ increased need to focus on compliance, to the effect of mergers and acquisitions on the structure of the market, from outsourcing – both domestically and overseas – and the impact on processes and efficiencies for both for carriers and wholesalers, to employee recruitment and retainment.

The audience’s main interest seemed to be the panel’s view on the current soft market for excess and surplus lines insurance. The panel members were split on their advice on the fundamentals for success, given the expected tough market conditions for the foreseeable future.

USLI’s Nerney cautioned against companies and general agents adopting a reactive strategy, stressing instead a disciplined approach. Nerney advised both companies and general agents to “know their own stories” – who they are and what they do best – and to instill a belief in that story at every level of the organization so that every employee is on the same page. Management must then stay energized – and keep their employees energized – about the path they’re on, rather than veering right and left in some attempt to react to market conditions. Nerney also stressed the need for organizations and their employees to be actionable – to understand that it’s their job to make things happen, to take initiative and therefore be proactive rather than reactive.

Markel’s Springman advocated a different strategy for dealing with current market conditions, specifically where he sees standard carriers increasingly encroaching on the underwriting of risks that were once the providence of surplus and excess lines carriers. The marketplace requires “trick plays,” he said. Companies “need to be nimble,” to be able to stay a step or two ahead, identifying new products and procedures, and differentiating themselves from their competitors. Springman said that successful wholesalers need to be nimble as well, differentiating themselves from others in the industry and thereby creating a pipeline of business that will sustain them.

Gen Star’s Roberts used a buffalo hunting analogy that quickly became one of the pervasive analogies of the University East weekend. Robert’s view was that in a softer market in which standard carriers seem to be taking on risks that were previously underwritten by excess and surplus lines carriers, there are “fewer buffalo to hunt” and the “real estate in which to hunt is going to shrink, whether we like it or not.”

Only the best tribes of hunters with the right mix of fundamentals – the “strongest bows, sharpest arrows and best hunters” – will survive, Roberts predicted. For Roberts, these fundamentals included a combination of underwriting within a dedicated circle of competence – not taking on underwriting for risks in areas you don’t know or understand – and stretching to develop a goal of 10 new products every year, identifying and filling in gaps in existing standard and surplus lines coverage.

In this way, Roberts suggested, general agents have a dual role as both hunter and harvester, looking for gaps in coverage and providing information about opportunities to cultivate, so that companies can “broaden their [hunting] real estate” by developing customized products to solve problems for the producers and their clients.

Roberts also said that another way for “hunters” – both companies and general agents -- to excel in the current market is to increase internal efficiency, to systematically speed up the processes of quoting, issuing policies and claims handling.

Munich Re’s Goodwin addressed the market related to reinsurance, highlighting the “client-centic” goal of his company to “know the client as well as the client knows itself” and its initiatives to coordinate its efforts internally across departments and expertises – “breaking down the silos” – not only to provide the best products to its clients, but to provide value-added services. Goodwin suggested that vision and entrepreneurial spirit would serve wholesalers well in the current market.

All of the panelists agreed that business and personal relationships – building and maintaining them both with companies and retailers – is integral to success in any market, whether soft or hard. Both the executives on the panel and the members of the audience who commented agreed that while the loyalty of a retailer may wax and wane, with some suggesting that the current market made loyalty a thing of the past, the goal of the relationship between the wholesaler and the carrier needed to be one of partnership, both in goals and in corporate culture.