Broker amplification: 5 ways insurance agents & MGAs can partner for big profits

If you’re a broker, you’re always looking for an advantage. When your livelihood and providing for your family depends on your ability to write new business and retain your book — the stakes are high.

At any given moment, a broker might find a market that provides a pricing advantage significant enough to drive new business, but that is a short-term strategy. Price is always important, but the best agents know it’s not a reliable approach to long-term success.

Become invaluable

What is a strategy for long-term success? Create value.

Creating value requires productive partners. Productive managing general agent (MGA) partners recognize that to compete effectively, you need a differentiating strategy. It’s critical that the program manager (PM) understands distribution and appreciates the role of the broker/agent. The best way for a PM to build, maintain and grow profitable distribution is to be of greater value to the broker and their client — and to help brokers become invaluable.

How is value best manifested? At Glatfelter Program Managers, we use “broker amplification” to help our partners win and retain clients in our niche commercial markets. The idea behind broker amplification is making producers invaluable to their clients — so much so, that the idea of leaving would feel unimaginable and painful.

MGAs must provide these 5 tools

To help brokers amplify their success, MGAs must provide these 5 tools to their brokers:

1. Education.

Education is the cornerstone of specialization. And specialization is key to success in niche markets. Being a specialist requires a level of expertise that naturally attracts clients and makes an agent a valuable resource.

MGAs need to invest in the assets and infrastructure required to educate brokers and clients with resources like an online university, agent portals with information that are vital to success (and easy-to-access) and easy-to-use libraries full of great content for agents to share with clients.

2. Training.

As a broker, your goal is to reduce the cost of risk for your client and your clients need training to operate at their very best. MGAs should bring effective, accredited training to your clients, whether online or in a classroom. Providing access to best-in-class training to your clients, like driver courses or employment best practices, could save them time and money — and even potentially save their lives. This helps make you invaluable.

3. Predictable cost of risk transfer on a guaranteed cost basis.

For most small and middle market clients, insurance is a major expense. Like all expenses, insurance costs need to be budgeted — and the more predictable the cost, the more accurate the budget. Being a beneficial MGA partner requires insurance costs to be predictable because that increases the broker’s value to a client.

Guaranteed cost and predictable cost of risk transfer create a solid foundation to an effective risk management program, and when you bring together risk control and predictable insurance cost, you can drive down the real cost of risk assumption, not just the price of insurance.

4. Marketing best practices.

Best-in-class marketing is a necessity. From research papers that provide in-depth information about targeted industries, social media channels, blogs and videos — high-quality marketing is critical to generating true success. There is no amplification without a great brand. And there are no shortcuts in building a great brand.

When an MGA partner has built a great brand focused on bringing real value to the end-user, a broker can sell with great confidence. Ask any salesperson and they will tell you: a confident salesperson is a successful sales person. Representing a great brand and bringing quality resources to solve and manage your client’s risk challenges is central to building rewarding, long-term relationships.

5. Sales assistance.

It takes time to build expertise. In the interim, how is a broker supposed to move into a specialty class of business and sell effectively? Here is where the MGA’s expertise can heighten the success of a broker who is new to a class of business.

Truly effective MGA partners have specialized sales teams and specialized sales assistance. These teams know the industry, product, competition and competition’s product. They’re available to co-present, help close and provide expertise while the brokers develop theirs.

Today’s successful brokers are busier than ever. Ruthless competition and the pressure to grow is a challenge. The ability of an MGA partner to make the broker invaluable to their client is a proven pathway to success. And being invaluable to a client is the best foundation for a productive, long-term relationship.

Related: 5 ways to expand your book of business with current clients

Arthur B. Seifert is president of Glatfelter Program Managers, a division of Glatfelter Insurance Group, located in York, Pennsylvania. Seifert has almost 40 years in the insurance industry including positions in sales, financial consulting, underwriting and leadership in multiple companies. Connect with him at aseifert@glatfelters.com or on LinkedIn. Opinions expressed are the author’s own.