60 Seconds With Bernie Heinze
We talk to Bernie Heinze, Executive Director of the American Association of Managing General Agents (AAMGA), about the challenges facing the US insurance sector and Lloyd’s as a market of ‘first resort’.
Who does the AAMGA represent in the US?
The AAMGA has been a voice of and for wholesale insurance professionals since 1926. Over 480 managing general agents, programme administrators and managers, brokers, aggregators, insurance and reinsurance professionals, intermediaries, and a diverse array of business service entities belong to the professional trade association.
How is the Lloyd’s market important to AAMGA members?
Lloyd’s is an integral market for members to place specialty risks. Over 185 Lloyd’s coverholders are members of the AAMGA and work through the network of trusted brokers in placing their risks and negotiating reinsurance treaties. The chain of financial security afforded by Lloyd’s gives members a trusted market with which to trade. Some believe that Lloyd’s is a market of ‘last resort’ for unique risks that are unable to be placed elsewhere. However, due to the financial strength of Lloyd’s and credibility of Lloyd’s brokers, underwriters, syndicates, and managing agents – who bring innovative solutions to unique risks, and advancements in the payment of valid claims - Lloyd’s has become a market of ‘first resort’ for appropriate risk exposures. The collective size of the market and its specific capital structure enable syndicates and their coverholder counterparts to compete effectively with large international insurance groups under the easily recognisable Lloyd’s brand.
The Lloyd’s market is also important to AAMGA members due to the trusted relationship fostered over the years between the Corporation of Lloyd’s and the AAMGA. When new guidance and processes are proposed, or details on emerging risks and research are completed, the reciprocal dialog with the association and its members aids in considering the impact certain issues will have before they are implemented.
Can you tell us about some of the key initiatives that you’re focused on over the coming year?
Over the past two years, the AAMGA’s board has been engaged in a deliberative process to strengthen further the AAMGA’s brand and continuity, as well as to enhance the composition of its membership. The strategic plan that has emerged will be implemented over the coming year and afford the association the ability to remain relevant, and to increase opportunities for its members to differentiate themselves in the market.
Another initiative is to continue providing US federal and state legislators and regulators a reliable source of information in respect of governmental efforts impacting the freedom of rate and form that is essential to the viability of the specialty market. This includes a key effort on which the AAMGA has been working for numerous years. The US House of Representatives recently passed the National Association of Registered Agents and Brokers II Bill (NARAB II), which is designed, among other things, to afford reciprocity between the states for agents and brokers trading across state lines. The association has also been providing federal agencies like the Department of the Treasury’s Federal Insurance Office and the Governmental Accountability Office with data and information relative to implementation of the Non-Admitted and Reinsurance Reform Act and other initiatives currently being undertaken at the request of the US Congress.
The AAMGA is also expanding its educational and professional curriculum to advance the capabilities and credibility of its members. This includes elements of the Lloyd’s and London Insurance Market Test taught by Lloyd’s representatives to members. An underwriting boot camp is also being arranged for July 2014, which aims to afford specific technical underwriting classes and access to industry leaders who will teach the courses.
The AAMGA also remains engaged in the Excess and Surplus Lines Joint Working Group with Lloyd’s and other industry practitioners to improve efficiencies and best practice workflows, utilising the Acord standards.
The association’s young professionals group (the ‘Under Forty Organization’) also continues growing in its membership and initiatives for networking and fostering relationships among US, UK and German members. The AAMGA views the efforts of the group as paramount and as an indispensable component of the future of the association.
What do you consider to be some of the main challenges facing the insurance market in the US?
The Two ‘Ts’ - technology and talent - continue to be the main challenges facing the market, as wholesale professionals look to implement and exploit new programmes and automation opportunities to gain greater efficiencies, as well as to recruit and retain talented new practitioners. Mergers and acquisitions among agents and brokers also present a challenge to the smaller entities as the larger agents grow.
Can you tell us about the Automation Conference, which the AAMGA hosts each year?
The conference has become an important session for those charged with responsibility of automation and technology within their respective operations to gain a better understanding of current tactics, to examine the future opportunities and collaboratively to develop new processes and procedures. The AAMGA has seen an increasing attendance from the Lloyd’s market each year as brokers, managing agents and coverholders examine the appropriateness of existing efforts and develop new ways to improve their automation activities and operations.
Bernd G. Heinze, Esquire has been the executive director of the American Association of Managing General Agents (AAMGA) and its non-profit University since 2001. He speaks, testifies, lectures and teaches before insurance professionals, congressional and state legislators and regulators, industry organizations, colleges and universities in the US, Germany and the United Kingdom on a regular basis. He is a licensed attorney and is certified by all state insurance departments to present continuing education courses pertaining to insurance and legal related matters.