PROGRAM GIVES MINORITY AGENCIES A LIFT

PROGRAM GIVES MINORITY AGENCIES A LIFT

A new program that partners insurers and independent agents with minority- owned agencies aspires to encourage ethnic diversity in the insurance industry.

The Mentoring Program, as it is called, was launched recently by the Council of Insurance Agents and Brokers and the Hartford, Conn.-based insurer Aetna Life & Casualty. The program brings together the experience of a highly successful agency in terms of sales techniques, business operations and the use of technology; the ambition of a less-experienced minority agency; and the products, services and training offered by a major national insurer.The council, a Washington-based trade group representing large insurance agencies, is hoping to engage other insurers to consider similar partnerships.

At present, the percentage of minority-run agencies in the insurance industry is lower than the percentage of minorities in the overall U.S. population.

"This fact perturbs us," said Clayton J. Adams, vice president of strategic agency marketing at Aetna. "We did some internal digging and realized that we deal with very few independent agencies that are minority-run businesses. As the work force begins to become more and more multicultural and female, we want to make sure our agencies become multicultural and female."

While Mr. Adams acknowledges that minority insurance agencies exist, many are not appointed with standard market companies like Aetna. Most are selling insurance written by nonstandard carriers, such as surplus-lines insurers.

"Standard market companies typically don't appoint an agency until they can give a record of their losses and the kinds of business they have," Mr. Adams said.

"While we may underwrite some minority-agency business, it generally comes to us through third-party wholesalers. We don't often know this business originates with a minority agency, however. Thus, we don't have a record of the minority agency's business to appoint it directly," he said.

While Aetna, like a number of insurers and agencies, had been running its own mentoring programs, it and the council decided a more involved and integrated approach between insurers and agents was needed.

"We wanted for some time to appoint more minority agencies with strong potential for growth and profitability," Mr. Adams said. "The tough part was

finding them. That's where the new mentoring program comes in."

The mentoring program also provides some benefit to larger agencies and insurers, he said.

Aetna, for example, gains access to a potentially lucrative and virtually untapped market: minority-owned businesses and minority individuals themselves.

Larger agencies are in a position to learn the cultural implications and impediments inherent in various minority markets.

"I was mentoring a small minority agency here in Cleveland for the last 18 months and found the experience rewarding for both my agency and the minority agency," said James R. Pender, chairman and chief executive officer of the James B. Oswald Co. "I brought my experience to the attention of the council's industry-affairs committee, of which I'm a member. It turned out that not one member of the council was a minority-run agency. We decided to do something."

Mr. Pender said the council is in touch with Chubb Group and St. Paul to develop similar mentoring partnerships.