Boutique firms compete with the bigs
when they become part of the retail team and not simply a
portal to a market.
Much attention has been focused on the consolidation efforts
of brokers hoping to thin their wholesale distributor outlets
to the still-softening marketplace. Last month, I discussed the
“stay on the short list” successes of one of the
largest wholesale brokerages in the country. Now, I’m
focusing on the efforts of one wholesaler who insists that
standing out as a boutique is the key to surviving—dare I
say, thriving—in the battle of the
“We have to stand out as a boutique wholesaler,”
says Loti Woods, co-CEO and president of West Palm Beach,
Fla.-based McAuley Woods & Associates.
Woods says that retailer consolidation efforts over the past
two years have embattled the entire wholesale marketplace.
Retail M&A activity has cost her organization a few spots
on new entities’ approved lists. Across-the-board
declines in insureds’ payrolls and sales exacerbate the
threat for weaker players. “It’s no secret that
[consolidation] has placed the future of many transactional
wholesalers in danger,” she says.
Look at the list of America’s largest wholesalers by
volume, and McAuley Woods & Associates isn’t there.
But Woods believes her firm is perfectly positioned to bring
new revenues and new ideas to retail partners. The reasons for
her optimism could be summarized in two words: process and
“Our only interest is in serving 50 clients. We know
them. Almost all of these relationships have been formed
through referral,” she says.
Woods insists that retailers consider her firm as an
extension of their operations rather than a separate entity.
Market conditions have no effect on a business model that
promotes exclusivity to clients in part by limiting
distribution to one or two retail partners in different
geographic regions across the U.S. “They see us as a part
of the team,” she says. “They don’t look at
us as simply a portal to a market.”
Maintaining focus on this strategy is imperative for her
firm to stay successful in a marketplace that has been gorging
itself on the flesh of regional, boutique and smaller
transactional wholesalers. She says they’ve tried binding
authority and other approaches through the years, but it became
clear that was not their passion. “Our passion is
brokering deals,” she says.
Woods believes too many intermediaries have lost focus on
the fundamental purpose of the wholesale marketplace: making
money for retail partners.
“We partner with MGAs in offering and developing new
products. We take them to retailers and give them a heads up
that the exposure exists and now we have this product you can
sell to close the gap,” she says. “We often
approach from the angle that, if the retailer can sell a
product designed to close a gap, it will help them round the
account, helping to pick up the insured’s other p-c
Her firm’s partnership with Renter’s Legal
Liability is a good example. The MGA originally contacted Woods
about a condo legal liability product designed as a protection
for associations in Florida. As the relationship grew, the MGA
worked with the wholesaler to distribute a renter’s legal
liability product nationally. A side effect of record
foreclosures is record highs in tenancy, thus escalating risk
exposure for commercial entities with ownership in large
habitational risks. “This is designed for apartment
owners as the named insured to cover liability caused by
renters’ negligence,” she explains. The policy
addresses the common problem of renters not having adequate
Woods says the success with these two products has led to
the national distribution of a similar product from the same
MGA for student housing risks. Products like these make the job
fun, she says. “It adds excitement to the sale process
when you have something new and different to sell. If
you’re warm or cold-calling, it makes the conversation
Niche products like these serve another purpose. “Our
relationships with carriers allow us to help insureds qualify
for discounts on the remainder of the risk’s property
coverage if the retailer can sell it,” she says.
“Our retail partners are thrilled to have a new product
to offer that addresses such a substantial concern, which also
serves to qualify the insured for a discount on other
In addition to products, Woods says retail partners look to
the wholesaler as an extension of their sales force. “Our
retail partners love this approach as it gives them instant
credibility when they are trying to win the business,”
she says. She describes recent successes that arose simply from
the wholesaler assisting the retail agent in reviewing existing
property placements and uncovering significant gaps between
layers. “For example, we often find that certain excess
carriers fail to include ‘priority of payments’
wording in their policies—a necessity on any placement
My conversation with Woods proves to me there is still
viability in a wholesale marketplace where knowing your
client’s book of business trumps volume. And even though
it gets lost in the battle of the bigs, McAuley Woods &
Associates is proof there’s still fun in boutique.
Plan today! Come to the Wholesale
Insurance Leadership Forum, May 10–12, 2010, at Aviara in
North San Diego. Contact Cheryl Matochik at Cheryl.Matochik@CIAB.com .
Amrhein is wholesaler editor.