Brokers without borders: Assurex Global, a network of commercial insurance brokers, celebrates its Jubilee by insisting on an international perspective and a holistic view of the marketplace

Risk & Insurance, Nov, 2004 by Thomas J. Slattery

Assurex Global, in its 50th year, is the world's largest privately held risk management and commercial insurance broker network. Gregory S. Belton, president of Hunter Keilty Muntz & Beatty, of Toronto, is AG's current (and first international) chairman. James R. Hackbarth is president and CEO. Both sat down with Risk & Insurance during the RIMS annual conference in San Diego to discuss their continued expansion on the international stage, as well as some current issues. Here's what they had to say.

Talk about the recent expansion of Assurex Global internationally,

Belton: I've been on the international executive committee for five years. Until 1998, we had international affiliates, but they hadn't been integrated into the day-to-day. There were about 35 of them; now, it's more than 60 and they're more active with the domestic partners. [The idea was] to become an international organization, instead of an American organization with global affiliates.

[We want] to ensure we have the best partner in every center of commerce, wherever it may be in the world. We review existing partners every three years. We've put more teeth into that process. When we choose partners, domestically or internationally, we do a lot of research. When I carry the Assurex brand on my business card, I want prospective clients and employees to interpret that as the best in commercial insurance. Everything we do as an organization now speaks to that.

Hackbarth: We'll continue to expand internationally. The things we do today are to support our efforts on a global basis. When we bring partners on board, even from a domestic perspective, they have to have the desire to expand internationally, to take the AG story to their clients, to go in and talk to them about their international risk and to meet the partners from around the world.

How does a global enterprise differ from a domestic one?

Belton: There are cultural norms, regulations, tax laws, and ways of doing business that vary greatly. You have to have an intimate understanding of local markets, which you can't do if you're sitting in New York. A local partner is very important.

What does the average Assurex Global partner look like?

Belton: There are "subjectivities"--attitudinal measurements and so on. Whether we're in India or Philadelphia, we go to the major insurers and [ask] who are the best commercial brokers here. They know who we're looking for: firms that are commercially oriented; a good capability in employee benefits and automation; properly perpetuated; well capitalized; a strong track record of growth; creativity in specialty areas; depth of talent, and strong reputation.

Hackbarth: They need to be wholly committed. They come to a meeting and interact with other partners. Then they're voted in. A lot depends on soft factors that you don't know until you see. It's the commitment that you're going to support your partners. I don't know if it's written down, but there's an underlying understanding that if you get a call from a partner, you'll get back [to them] within 24 hours.

Belton: We have one broker per market, domestically; outside North America, in many cases it's one per country. Our French partner has 1700-1900 employees. Our German partner has 700 employees and has been around for 250 years. These are big players in their markets.

We receive a call, on average, once a day from a partner anywhere in the world asking us to service their client. We, conversely, use partner firms throughout the world to do the same. We're in touch with them about 25 times a day because of new or existing business.

Hackbarth: These are folks who have been in the community and they take ownership. It's a defining soft factor at Assurex. They're local business owners who are involved in their community, not just waiting to get their ticket punched and climb up the corporate ladder.

What do you provide the partners?

Hackbarth: There's Assurex Development Corp., an in-house investment bank formed in the early 1980s which lends over $82 million to partners. The money comes from a group of carriers, which is matched by other investors. It's very friendly money. There's never been money lost. If there's a group of young folks that have come up in the business that want ownership, we'll loan them money over a seven-year term to allow them to stay independent and to allow full perpetuation to happen. [Otherwise, they would have to leave Assurex Global.]

Then there's our E&O captive, Professional Agency Re, based in Bermuda, with a strong quality control program, underwritten by Fireman's Fund.

Finally, there's our new IT platform. None of us alone can set one up that incorporates five brokers across the world and one client on one common platform, but collectively we can now do this.

[As an example, at the RIMS conference, Assurex rolled out a new software to enhance communication and information sharing worldwide among AG partners and clients.]

Turning to current issues, do you think the alternative market will continue its growth in a softening market?