Why “market access provider”?

January 13, 2016

I’m often asked what we consider ourselves to be – “Are you an aggregator?” “Are you a broker?” Or, “Are you a wholesaler?”

And I’ll answer, “We’re none of the above. We’re actually a market access provider.” And that answer usually elicits an inquisitive look and a response, such as, “What’s that?”, or “What the difference between you and, say, an aggregator?” All good questions, and insightful as to the sign of the times.

The answer to these questions is in the evolution of the industry over the past 10 years along with our positioning statement:

10 years ago, Indium was established as an “aggregator” with the goal of helping independent agents gain access to the major national standard market carriers that agents couldn’t otherwise get access to. We aggregated premium to drive volume for our carriers and earn our revenue, while passing all commission income to our agents. And therein lies our “win-win-win”, one of our core founding principles that still guides our model today. At the time, it was one of the most unique and innovative models in the industry.

Fast forward 10 years, however, the models of third party platforms that play in this space between agents and carriers have grown, and continue to evolve. What was a fairly open space 10 years ago is now very crowded: brokers, intermediaries, wholesalers, aggregators, MGAs, clusters, alliances, networks, and holding companies. And the lines between the various models are getting blurred, so much so it’s easy to see how people think and speak of them interchangeably.

But Indium, arguably a leader in the “aggregator revolution” back then has evolved as well. And because the value we create for our agency and company partners extends beyond any one model we don’t associate ourselves with any of the aforementioned models at all. And here’s why:

Why we’re not an aggregator

"Aggregator" has become a dirty word in the industry. Carriers have caught on to the fact that aggregating premium volume for the sake of simply creating size only means more expensive premium to the carrier. Carriers expect growth. Which is why our model is built to drive profitable growth, before anything else, for everyone we do business with. To think of Indium as an aggregator is to understate our model and the value we bring to our agents and carrier partners. Certainly from a carrier perspective our volume is aggregated across our agency footprint for reporting and compensation purposes. But our focus is to enable our agents to grow profitably, which in turn drives profitable growth for our carrier as well Indium. That's our “win-win-win” founding principle.

Why we’re not a broker

While in a certain light one could make a case that our commercial operation acts like a brokerage – our agency partners work directly with us, we evaluate the risks, qualify the risk and find the best market for the risk. We’ll work directly with the company underwriters, and often bring them together with the agency's producer, to get the account written. However, our model seeks long-term partnership with our agency partners beyond just a transaction for a hard to place risk. Also, we're not underwriters and we don't have the pen with any carriers. And in working with our agents, if the risk has a history or propensity for losses, we won’t present it to our carrier partners (Off to E&S it goes). But when we do help win an account for an agency partner, in certain cases we don’t split the commission, unlike a broker.

Why we’re not a wholesaler

So why not a wholesaler? One could make a case that our personal lines operation acts like a wholesaler – our agency partners, through the appointment of a subcode, can quote, issue, bind, endorse, and print everything they need directly from the carrier systems. There is no intervention on our part (with the exception of Chubb, of course) and the agent gets paid full commission, directly. However, relationships matter to us. We manage our agency partner relationships in collaboration with our carrier partners for profitability and growth expectations. For example, one agency partner suggested that we shouldn’t care about his loss ratio because “it all comes out in the wash” (see also "why we're not an aggregator" above). But that’s not how we manage our relationships, both with our agency partners and our carriers. Profitable growth is the end-game, and we hold everyone accountable for helping achieve that outcome so that everyone wins (Have I mentioned the “win-win-win” yet?) And that’s why we don't think of ourselves as just a wholesaler.

Why we’re not an alliance or cluster

We call this unionizing versus strategizing. Although, these models are the most intriguing to me, and seem to be where the lines are blurring the most. But in simple terms, our agency partners are fully independent from us and from each another. We don't facilitate or dictate any sharing of back-office resources (people, technology, financial) among our agency partners, nor do we aggregate volume of select carriers in hopes of driving higher compensation or protect agencies from under performance. which is often what we see when agencies form or join an alliance or cluster. To the contrary, our focus is to facilitate independence for our agency partners, so much so they shouldn’t need to form or join an alliance or cluster. We value strategizing over unionizing.

Why we’re not an MGA or an “agency”

My least favorite comment is when someone refers to us an “agency”. What distinguishes us here is that we aren’t staffed with producers, we don't work directly with insureds, we don't pay our staff commissions, and we neither write or renew the business. With that, we don’t have any ownership in any of the business written through Indium. As we think of it, we are in that space in between an agency and the carrier, facilitating profitable growth for all parties.

 

To be clear, all of these models provide a certain value and will likely be an attractive solution for any agency, depending on their needs and strategy. The fact of the matter is, given all of the M&A activity and the ongoing pressures in the industries, many agencies are thinking (if not worrying) about any or some combination of these models as an “out” for their agency in the very near future.

And this is why time is of the essence for us to make sure agents who value being independent know about us and the value we can create, to give them an edge and to stay indie.

Why we are a market access provider

Being a market access provider is what we do at our core: we provide our agents with access to the most reputable standard markets in the industry. In doing so, it’s what we don’t do that differentiates us: we don’t take ownership of any business, we don’t charge exit fees, and don't have any non-compete clauses or first rights of refusal. These aspects are at the core for why our partnership agreement is the most agent-friendly agreement in the marketplace. Ours, unlike others, is a a two-way, mutually beneficial, agreement that facilitates the genuine partnership with our agents.

But what’s more is that being a market access provider also allows us to innovate around value creation for our partners (and the industry as a whole). Like, solutions for growth and perpetuation, technology and lending, training and knowledge capital, and other resources and solutions that will differentiate our agency partners, the “indie agent” (What’s an indie agent?), from all other models in the industry.

For Indium, it all starts with our “why” (Why Indium), also known as our new brand positioning statement:

Everything Indium does is meant to challenge the established model of insurance giving Indie Agents™ an edge now, and in the future. We do that by providing market access like no other provider through the use of unparalleled service and technology, making Indie Agents™ and the companies we partner with, winners. With the most agent-friendly relationship agreement in the marketplace, and solutions for growth, profitability, and perpetuation, you should partner with us.

Indium was built by and for agents. The indie agent. So when we say “stay indie”, it is not a marketing ploy meant to repackage an old model. “Stay Indie” is acknowledgment that an important and needed distribution model is under threat, and we are here to provide the platform by which the independent agent will win in the future. “Stay Indie” is a belief that indie agents, combined with the resources of Indium, are still the best means of distribution and, together, have the best chance of success in serving the insurance consumer. 

 

#GetAnEdge #StayIndie