As a business consultant, Glenn Hargrove, former CEO of Crump, conversed with others about their innovative ideas, plans to defy the status quo and leveraging technology. Maybe it was their ideas that sparked his enthusiasm. Or maybe it was a well timed conversation with Richard Kerr, CEO of MarketScout, the online insurance exchange used by 50 carriers to distribute products to a network of 35,000 retail agencies.
Maybe it was both. Regardless, March 2010 marked the arrival of MarketScout Wholesale (MSW).
Now the conversation is about him.
I spoke with Hargrove about the inception of MSW, the organization for which he will serve as president, its relationship with MarketScout and why he believes it might be the perfect partnership.
“We thought the last thing this current marketplace needed was just another wholesaler,” he says. “Market conditions have forced many wholesalers to retreat to their core functions. As a result, many look and act the same.”
After leaving Crump, Hargrove was a business consultant for many firms whose origins could be traced to a chance encounter between two individuals sharing a similar vision. The same fate would eventually become the foundation for MSW.
Over time, he got talking to Kerr, and they started piecing it together. “We thought the combination of MarketScout’s resources with a wholesale operation was perfect,” Hargrove explains.
Officially formed in early March, MSW is in the early stages of creating a team. Like MarketScout, MSW is headquartered in Dallas, and it plans to expand with locations on the West Coast and in the Southeast. The goal is to become a national wholesaler. Hargrove says the appropriate licensing, market appointments and other necessary variables are in place in all 50 states.
“We will work in both the admitted and non-admitted marketplace. We have no preconceived notions of what type of business we will and will not write. This all hinges on the talent that joins our team.”
He says MSW will perform on a broader scale than traditional wholesalers. “We will focus on brokerage, MGA, program business and other more traditional roles. But we also plan to provide service on a more strategic level. Consulting, product and program development, technology consulting, joint ventures and other options will be available for our retail partners. Our plan is to perform more as a partner than a traditional transactional wholesaler.”
But it’s the relationship with MarketScout that Hargrove believes will truly separate MSW from other national wholesalers. He is confident that the wholesaler is a perfect partner to The MarketScout Exchange. “Most of the business plans I’ve seen over the years mentioned ‘leveraging technology.’ MarketScout is one of the first times I’ve seen that statement come true.” The exchange is designed for retailers, and most users work for smaller retail firms, he says.
The network is an excellent distribution source because many of the users do not otherwise have ready access to a wholesaler. When a retailer logs on, they will see MarketScout’s products and be able to work directly with someone to utilize them. “If the product they need isn’t there, they will be able to connect with us. In this way, we are able to offer the retailer an outlet for open brokerage if they need to find a home for a hard-to-place risk.”
In addition to using the exchange to establish relationships with retailers, Hargrove explains, MSW will also distribute its products and services through this venue.
Not all of MSW’s retail partnerships will come from the exchange, though. “We will still have brokers on the ground to build personal relationships, the more traditional route. However, we believe MarketScout’s resources will offer us unprecedented retailer access that could take years to duplicate simply knocking on doors.”
He believes that innovative retailers will relish the opportunity to have a relationship with a wholesaler that is completely electronic. MSW’s position within the exchange will make this possible. “Our relationship could be personal or completely electronic, whichever suits their model,” he says.
There are those who believe that an electronic model is fine for retailers placing business directly—that a wholesaler should only be brought in when the software spits out the risk based on unfavorable data. Hargrove disagrees. He equates the way many wholesalers in today’s marketplace operate with the banking world. “Most are stuck in the days of balancing a checkbook and waiting on statements,” he explains. “We’re trying to duplicate those innovative banks that first hit the market with debit cards, ATMs and online banking.”
He believes the exchange provides the infrastructure to automate much of the transaction for both the retailer and the carrier. “That’s something most other wholesalers just don’t do. We hope to make this level of automation the status quo.”