"Knowledgeable retail agents who behave in a professional manner are the most important asset that a managing general agency has."
So says Thomas Jackson, president of the Summit Group of Companies, based in Las Vegas, Nevada. One reason Jackson feels so strongly in this regard is that, until fairly recently, he was a retail agent himself. Jackson started the Summit Group in 1997 after many years as a retail agent specializing in the construction industry.
"I decided to move to the MGA side of the insurance business because, frankly, I was frustrated by the fact that insurance carriers were paying too little attention to loss control in the construction industry," says Jackson. "For some reason, carriers seem to view quality loss control as nothing more than an expense dollar. From the carrier standpoint, Liberty Mutual has a good loss control program, but it goes swiftly downhill after that, even among the major nationals. We felt that we had solid loss control experience in the construction business, so we decided to become an MGA."
In fact, Summit operates as an MGA only in the construction industry, underwriting general liability and property insurance for all commercial contractors (no residential contractors) with a minimum premium of $50,000. "We have two programs that include 10 separate classes," Jackson says. "Our target markets are commercial general contractors, contractors that do street and road construction and electrical contractors. For our electrical contractors program, we have the sponsorship of the National Electrical Contractors Association."
At present, Summit Group does most of its business in California; but Jackson says the agency is branching out into Arizona, Oregon, Nevada and Washington. In the construction area, he notes, the hard market of the last few years appears to be leveling off. "As far as the construction business is concerned, we hit the top of the market last October," he says. "Depending on the class of business, we're seeing rate increases of about 15% on the average. Last year, the increases were triple that. I would say that, after the first quarter of this year, carriers are going to realize that they are making money on the business and premium hikes will be more moderate."
Jackson says he joined the Target Markets Association after he was approached by some board members who described the association and its goals to him. "Program administrators are unique in this business. We have unique interests, and I felt that what Target Markets is doing is just right," Jackson says. "There is no other association in the insurance business that is dedicated solely to the needs of program administrators, and I would very much like to become more involved in the association's activities."
Asked whether he thought the Target Markets Association might eventually become a venue for program sharing, Jackson said this is a possibility. "Let's say, for example, that one program administrator has some agents who are not only sophisticated in the area in which that program administrator operates but also have some expertise in the construction arena. That would be a valuable piece of information for me, and I'm certain I could provide something of value for that program administrator as well. That's why Target Markets is so important. It provides a forum for program administrators to communicate with each other and for MGAs like us to communicate with retail agents. And, don't forget, the association is fairly young. It has only just begun to scratch the surface of the values it can offer to program administrators, to retail agents and to carriers who are committed to the program area." *