Still, he added, “we were guilty ourselves of patting ourselves on the back because we were growing 17 percent and 12 percent” in prior years. “We never really looked at what we could do better,” he said. He explained that TAPCO is doing a better job this year of educating retail agent customers that they can get $5,000 or $10,000 accounts done just as quickly as $2,000 accounts.

(Full details of TAPCO's model, which had previously bound accounts averaging $2,000 in premium, are described in a prior NU article, “Specialty Insurer, Broker Distinctions Amplified In Soft Market,” NU, Oct. 22, 2007, page 22.)

“A restaurant can be quoted and bound in five minutes,” he said, giving an example to contrast the small artisan contractor accounts that have been the bread-and-butter of TAPCO's five-minute model in past years. “In the same amount of time, we can land a $10,000 account–and that's a very important customer for the retail agent.”

In addition to binding larger accounts, Mr. Johnson said “the newest, coolest thing” TAPCO is doing this year is “managing people's brands”–doing all of the front and backroom processing for “some friendly [MGA] competitors” and some insurers.

Those organizations have “realized they don't have the passion for transactional processing, or they don't have the time or ability to build a 25-year old system,” he said. At TAPCO, “it's what we believe in.”

Explaining what he termed a “white label” process, he said, “It's still their brand. Their customers think they're talking to XYZ agency. They're really talking to TAPCO and we deliver the product under XYZ agency's brand,” he said.

Those MGAs and insurers that sign on to share his firm's processing expertise in this way compensate TAPCO through revenue-sharing arrangements, he said.

He sees this as a natural extension of what MGAs have done for carriers for years. “Insurance companies appointed MGAs because they were [coverage] specialists,” he said. “If we're printing specialists, quoting specialists, delivery specialists, [now] they'll just pay us for that specialty.”

GAs that decide to team up with TAPCO in this way instead of competing head to head have helped TAPCO as it expands to new territories. “Rather than me trying to meet every agent in California, if someone says, 'I have 1,000 agents. Do you want to service them and let's split the commission,' then I would love to do that,” Mr. Johnson said, adding that the opportunities have also served to keep some new TAPCO underwriters busy–those hired to ramp up for expansion last year.

Mr. Johnson said the toughest challenge he's faced in expanding to Texas, California and other states is getting appointments to tell his firm's story to retail agents. While TAPCO has signed on 800 retailers in Texas and 600 in California–effectively getting about a 50 percent acceptance rate once agents do agree to meet with his representatives–Mr. Johnson said “getting in the door” to demonstrate the model was the toughest task this year.

Up in Farmington Hills, Mich., another MGA, Alan Jay Kaufman, chairman, president and CEO of Burns & Wilcox, needs no convincing about the importance of developing a five-minute binding model.

During an interview earlier this year, Mr. Kaufman told NU that his firm has done its own independent research revealing the importance of timeliness to retailers. “The No. 1 reason they choose a business partner in our world is because of service,” he said. “You have to be agile, quick” as an MGA or wholesaler, he said.

“We are very much driven by the goal of being able to provide timely responses to the agents,” he told NU in an interview earlier this month. “We have some good technology now, but we want to be even more competitive with our technology–and to be quicker,” he said, reporting that his firm is in the midst of developing a new technology platform.

The new platform, set to launch in 2009, will enable Burns & Wilcox, “in most cases, to go from quote to bind in a matter of minutes.”

The firm has made a significant investment, purchasing the software, retaining consultants and hiring people with “the background and skills to help develop the product,” Mr. Kaufman said. The product isn't being completely developed in-house–”because we have purchased software which can deliver it–but the software has to be modified to meet the specific needs of our company and our niche in the industry.”

“To be global, this is an important step for us,” he added, anticipating that the technology, together with an ongoing acquisition strategy, will help bring customers in other parts of the world to his firm's doorstep.

Burns & Wilcox took an initial step to move from a national to international platform in April, when it formed a new business with C.J. Coleman & Company, a London-based wholesaler in mid-April. “We became global, leveraging our position as a provider of contract business to London by forming an entity named Coleman and Kaufman Ltd.,” Mr. Kaufman noted.

Explaining the impetus for the joint venture recently, Mr. Kaufman hinted that Burns & Wilcox is setting its sights well beyond London, but declined to be specific about whether an Asian or European platform was in the works.

“In our long-term plans, we want to be global. This is one of the important ingredients,” he said. “We are working on some acquisitions right now that will take us outside the United States, and London facilities are more important for international business,” he said, suggesting that Coleman and Kaufman will serve as the base for broader expansion.

Explaining other drivers of the Coleman joint venture, he said Burns & Wilcox had already been among the largest providers of contract business to London, with London representing $100 million, or roughly 10 percent, of all the business that Burns & Wilcox does. “London is an important part of the package of where our business goes,” Mr. Kaufman said.

In addition, he said his firm has had a long-standing relationship with Coleman. Coleman owns a portion of a brokerage, called Corrie Bauckham Batts, with which Burns & Wilcox has done business for more than 30 years, he said.

Going forward, “both Coleman and Burns & Wilcox thought it would be a good idea to establish a [new] brokerage company for specific needs, in addition to the brokerage companies that we already use” in the London market.

“Different brokers bring different expertise and facilities. So we thought that by forming our own brokerage, we could bring some different expertise than we currently have in the London market, as well as maybe being able to develop some exclusive products that we may not be able to develop as easily with other brokers,” he said, noting that other brokers might have conflicts for one reason or another.

Giving an example of product needs, Mr. Kaufman cited entertainment–and the film industry in particular–as an area of Burns & Wilcox involvement that has greater needs globally.

Back in the U.S., TAPCO's Mr. Johnson recognizes limits for his service model in states TAPCO has already entered, and says a 50-state expansion is not in his plans.

For example, “We're not doing the Hollywood side of California,” he said. “We're not a real high-net-worth market [and] don't have Silicon Valley kind of model.” But Southern California does have a large migrant population, he said, noting TAPCO's historical expertise in placing plumbers, landscapers, masons, painters, gardeners and other artisans.

By the end of the year, TAPCO will be in 28 states, he said–states that represent about 90 percent of the U.S. surplus lines volume. It's about a $20 billion marketplace, [with] $18 billion of that in 28 states, he said. “It's hardly worth it” to expand further “for that last little kick.”

Both Mr. Johnson and Mr. Kaufman see potential for a different type of expansion–the possibility of using their five-minute binding models to speed up brokerage transactions in situations where they don't have binding authority.

“We're going to be able to search out the market very expeditiously in many situations,” said Mr. Kaufman, whose firm historically has done both binding and brokerage business.

Mr. Johnson, whose firm traditionally has not done brokerage business, agreed. “Although, we couldn't pull the trigger in five minutes,” he said, referring to lack of authority to make an underwriting decision on the phone, “we could route the transaction better, take a lot of human steps out of it, predict a lot.”

“If you can predict, and basically not waste [the insurers'] time with submissions they don't need [by doing] all the legwork ahead of time–basically getting [them] in a pattern of saying, 'Yes, I agree'” to accounts that do get routed through to them–”then you'll be popular and they'll be effective.”

In five minutes, “we could have 90 percent of the answer and then pass it to that human element,” he said.

While Mr. Johnson said his firm's U.S. expansion has kept him too busy to implement the steps to pursue this idea for now, the firm is becoming more involved with what he calls “up-sell” opportunities for products like employment practices liability and personal umbrellas–offering free quotes and brochures about the added coverages with e-mailed quotes for contractors or homeowners.

Mr. Kaufman reported that Burns & Wilcox has been active in new product development this year. “We try to be innovative, ahead of the curve,” he said, describing a line of “Green Impact” products launched by the firm in June to address exposures of homeowners, business owners, contractors and building owners involved in projects aimed at conserving energy or earning environmental tax credits.

“Anything related to the industries or concepts of going green we feel is ripe for the excess and surplus lines market,” Mr. Kaufman said. “New products are always tested in the E&S market.”

He suggested that another reason the market has a principal position in the green impact segment right now is that it's not huge. “The standard companies won't see the volume” that attracts them, he said.

In the same vein as the EPLI and umbrella offerings, Mr. Johnson said TAPCO is up-selling more standard products, like workers' compensation, and newer offerings like identity theft coverage, by simply adding two or three more questions–an addition of 30 seconds to the usual five-minute routine.

Mr. Johnson also said that products like identity theft coverage, credit life insurance and financial products are appealing to “the more economically impacted end of the scale”–the working men and women that make up the bulk of the ultimate customers served by TAPCO's retail partners. “The more financial solutions we have for them, the better,” he said.

He noted that another big focus this year has been to offer payment solutions. “A lot of the customers we have can't afford to pay even a minimum premium of $1,000,” he said, noting that TAPCO Three-Easy-Pay now bills the insured in three installments of one-third of that total.