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A Chat With Mark Harris, President, Assurex Marketing Group (AMG) Quadrant

Editor's Note: Earlier this year, U.S. RE completed acquisition of a majority interest in Assurex Marketing Group (AMG), parent of Quadrant Insurance Managers, a leading managing general agency and program administrator headquartered in Columbus, Ohio. The acquisition was another important step in U.S. RE's transition from a traditional reinsurance intermediary into a global, financial services and insurance firm with reinsurance brokerage as a core business. Mark Harris is the President/CEO of AMG/Quadrant. Recently, he shared some thoughts with us on the future direction of Quadrant and its role as a member of the U.S. RE Group.

Q. U.S. RE recently acquired a majority interest in AMG/Quadrant. How will Quadrant and U.S. RE work together? What do you see as the benefits to both companies?

A. Personally, I see U.S. RE as an incredibly diverse resource for Quadrant. They undoubtedly will assist us to realize our goals. Both companies bring different skills and experience to the relationship. I'm convinced we'll develop a high degree of synergy. We're pros in the program business (marketing, R & D, and underwriting). Our friends at U.S. RE are pros in all aspects of the reinsurance business, capital markets, and alternative risk transfer. Put the two together and we can offer powerful programs backed by reinsurance commitments that will make them extremely attractive to companies and producers.

Q. What else do you think will create synergy between the two companies?

A. Perhaps the most important benefit safter you peel everything else away are experience and a global view. At Quadrant, we can draw upon the combined experience of the U.S. RE team in our research and development as well as marketing strategy. The opportunity to interact with the management team of U.S. RE, for example, brings immeasurable depth to Quadrant. Through U.S. RE's worldwide operation and contacts we gain a global perspective and access to insurance developments, opportunities, and issues. This will differentiate us from our competition and help us develop innovative products and programs.

Q. Both Quadrant and U.S. RE are becoming increasingly active in the managing general agency arena. Is this a potential conflict or do you see it as a complementary relationship? If complementary, in what way?

A. The relationship is complementary. No doubt about it. We'll create programs that will be more attractive to producers and insurance carriers because they're backed by reinsurance commitments. This helps us and builds new business for U.S. RE. Without the reinsurance commitments, it would be more difficult to market innovative programs. The reinsurance backing will also shorten the time it takes to put together new products and programs. Typically, it takes six months to develop a new product and two years for a program. With U.S. RE support, we expect to shorten that schedule . We're also excited about the ability to make deals that involve captives or rent-a-captives through U. S. RE's subsidiary, Uni-Ter. As U.S. RE develops more of its own MGA contacts and relationships, they will benefit from our talents and areas of expertise as well. Together we are stronger and more well rounded. Sounds like a win-win scenario.

Q. Your company, Assurex Marketing Group (AMG), was formed years ago by Assurex International. Give us a thumbnail history of the company and how you evolved from AMG into AMG/Quadrant.

A. When the company was formed in '89, it was intended to be a managing general agency to work with Assurex Partners in developing program business. For the first few years, however, we operated as a program administrator. We developed the programs, and provided the training, administrative support, and marketing. I joined the company in '95. In '97 we decided returning to the original concept could best develop our potential, and we became a managing general agency in '98. Today, we continue to create products and programs in concert with Assurex International Partners but we also make them available to 400 select insurance agencies outside the Assurex network.

Q. What are your goals for AMG/ Quadrant over the next few years?

A. Our most basic goal is to continue to earn the respect and loyalty of our producers by making their work easier and more profitable. We seek to add value to buyers through every transaction; our term for this is "getting to the other side of the customer". When executed properly, this process gives producers something other than price to sell. Our mission as a marketing and underwriting agency is to utilize unique distribution coupled with innovative products and ser vices that fulfill clients' needs.

Q. What kind of deals are you looking for and how do you qualify them?

A. In evaluating a potential deal, first we look at the need. What is the current problem and is it growing? Can we find a solution that works for the buyers? Next we analyze the universe of prospects. How many? How large? Where are they located? What are their buying habits? Is the proposed product a mandatory purchase like workers' comp and auto liability or is it a discretionary purchase like an umbrella policy. We tr y to "get on the other side of the customer" by looking for products and programs that will give prospects a compelling reason to deal with our producers. This research gives us a good feel for the deal's potential. We're looking for deals with growth potential. We want to be in a position to add significant value, employ unique distribution systems and generate a large enough premium to get top producers interested.

Q. What are some of the services you offer in connection with products and programs?

A. Quadrant has a unique distribution system, therefore we take on the sales/marketing in all cases and we welcome the opportunity to provide other services as well. As an underwriting entity we learn the prospect's business and their critical issues. Then we create a detailed underwriting submission to help carriers get comfortable with the buyer's risk. Typically we write the protocol for the handling of loss control. We work with TPAs to build parameters for claims adjusting and look to stay involved in the management of the claims process. Depending on the opportunity, we are willing to handle the purely administrative functions of data capture and transmission and the issuing of policies and endorsements, etc.

Q. AMG/Quadrant is becoming known as a leader in Internetrelated products. How will the Internet affect agents?

A. The Internet is misunderstood by many agents and brokers. Some see it as a competitive force to put them out of business. We don't. Our experience is that savvy brokers are finding the Internet can be a tool to improve efficiency, cut costs, and develop new sources of business. Our Internet products bring customers to brokers and enable completion of the transaction in an incredibly cost-effective manner. A large segment of the insurance-buying public want advice from an agent or broker but at the same time welcome the efficiency of Internet communication. Brokers who recognize this will be winners.

Q. What do you see as the future of e-commerce in the business of insurance? Will it be used primarily for personal lines or can we expect standard commercial insurance products to be sold on line?

A. We're already seeing standard commercial insurance products sold online. We'll see a great deal more of this in the future. Some personal lines have been available on the Internet for a couple of years. This sector is developing quickly, and the volume of personal lines insurance sold directly to the consumer through the Internet will continue to grow. In commercial lines, brokers can continue to play a key role in products offered on line by providing online customers with the advice and counsel necessary to make informed decisions. The need for agents and brokers will continue to be directly proportional to the complexity of the risk being covered. At the same time Internet communication will cut costs for all parties to the insurance transaction.

Q. How can brokers, agents, or companies get in touch with you?

A. Just give me a call at 614-841-1425 or send me an e-mail at mharris@quadrant-us.com. If I'm on the road, call Kimberly Pepple, Assistant Vice President, at 614-841-1425 or send her an e-mail at kampepple@quadrant-us.com.