Although many insurers are taking the necessary steps internally to grow their books of business, many realize that they need to look outward and align with third-party distribution channels that have developed their own internal IT competencies.The impetus to raise the stakes on small-business insurance marketing is significant because no single carrier has more than 3%-4% share of market, says Ed Gillman, president and CEO of AgentSecure, an Atlanta-based insurance agency serving the small-business market.

Chicago-based InsuranceNoodle put its technology infrastructure in place in late 2000 and then set out to partner with diverse insurers-ones that held expertise in a wide range of small-business insurance and possessed what the company calls an "appetite" for business risk, explains Don Urbanciz, CEO of InsuranceVianet, the holding company for InsuranceNoodle and InsureVianet. When InsuranceNoodle was launched, it aligned with partners that include Zurich, AIG, Chubb and The Hartford. At the same time, these insurers, in an effort to spread their businesses thin, also partnered with more than one distribution partner.

The key, says Urbanciz, is not only attracting as many carriers as possible, but nurturing the relationship. He says the company learned lessons from several third-party aggregation sites that served the life, auto and homeowners insurance segment. Some of these models were based on providing a myriad of quotes, which only produced overall confusion.

InsuranceNoodle subscribes to a theory of selectivity. "We designed our Web-based quote field to offer only the three best quotes for an agent seeking a business insurance quote," says Urbanciz. "We want the quotes to complement, not compete."

With the right insurers in place, the interest of agents becomes piqued. Agents become members of the third-party program by paying a nominal initiation fee and usually can become licensed within a program in about five days. Commission schedules vary from provider to provider.

But access to insurers and ease of use are the key ingredients for agents to participate. Agents often face barriers when conducting business with insurers for several reasons. Agents who can't meet volume stipulations set by an insurer can't access those product lines, while insurers that offer poor tools and technologies are unable to attract prime agents. That's where external distribution partners can prove invaluable.

"These providers give my agency access to carriers and markets we couldn't reach otherwise because of things like minimum volume requirements," says John Axtell, principal The Axtell Group, a Torrance, Calif.-based agency targeting commercial accounts, which has been affiliated with InsuranceNoodle for about a year. "And the partnership helps me compete for new business because it's very important to be the first agency back with a quality quote."

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