Why “market access provider”?

January 13, 2016

I’m often asked what we (Indium) 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” of 10 years ago, 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

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 this doesn’t tell the whole story. Simply aggregating volume is a zero-sum game. Which is why aggregating volume is not the focus of our model. Profitable growth is our focus. Our model is built to drive profitable growth, before anything else, for everyone we do business with. When we enable our agents to grow profitably, our carrier grow profitably, and in turn, Indium grows profitably. And therein lies 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 producer, to get the account written. The difference is, as mentioned above, one of our qualifying criteria is profitability. 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, we don’t split the commission, unlike a broker. Again, this is where our win-win-win” principle guides our model and our decision making.

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). However, we manage our agency partner relationships in collaboration with our carrier partners for profitability and volume expectations. For example, one agency partner suggested that we shouldn’t care about his loss ratio because “it all comes out in the wash” (of aggregation). 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?) With that, personal lines makes up less than half of our total premium volume and is one-fourth of our staffing capacity. And that’s why we can’t think of ourselves as just a wholesaler.

Why we’re not an alliance or cluster

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 one another. Indium doesn’t facilitate nor dictate any sharing of resources (people, technology, financial) among our agency partners, which is often what we see when agencies form or join an alliance or cluster. In fact, our relationship with our agents facilitates independence, so much so they shouldn’t need to form or join an alliance or cluster. If they do, then we are failing at our job.

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, nor underwriters. With that, we don’t have any ownership in any of the business written through Indium. As we think of it, we are neither an agency nor a carrier. We are in that space in between, facilitating profitable growth for all parties.

To be clear, all of these models serve a certain purpose and provide a certain value, and will likely be an attractive solution for any given agency. 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 termination fees, and we don’t split commissions. These aspects are at the core for why our brokerage agreement is the most agent-friendly relationship agreement in the marketplace. Ours, unlike others, is not a contract. It’s a two-way, beneficial, agreement that facilitates the most genuine partnerships 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.

You see, Indium was built by and for the indie agent. So when we say “stay indie”, it is not a marketing ploy meant to repackage a tired 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 system 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. This will be true because the indie agent will be the most informed, most educated, most capable, most engaged, most valued and most valuable in our industry.

#GetAnEdge #StayIndie