DRIB - GOING GLOBAL

In Paul Simon's 1987 song "Boy in the Bubble," on the Graceland album, Simon sang with conviction about these being the days of miracle and wonder. It's a song about hope and amazement at the achievements of society, tinged with caution about the unforeseen consequences of progress at any price. Simon's lyrics described technological advances and breakthroughs that amazed him. He sang of loose affiliations of businessmen: "millionaires and billionaires."

While by no means a loose affiliation, RiskProNet International, Inc., unquestionably offers a unique style of insurance and risk management for its 29 broker-owners and their clients around the globe.

Although technology has progressed well beyond what Simon sang about in 1987, the technology available and the systems that support it are all essential to the infrastructure of the business and insurance world today.

RiskProNet International's innovative approach is built on this base of technology: its member brokerages communicate through a closed Internet facility to share expertise about various aspects of risk management worldwide. The network of U.S. and Canadian brokers, through its partnership with Globex International, has established a formal presence in 100 countries that helps it attract and satisfy the needs of clients all over the globe. Key to RiskProNet's success as a fast-emerging, non-advertising organization is its strong focus on clients and their needs.

Birth of a vision

The vision began in Atlanta in 1997, when Michael Flynn (Diversified Risk Insurance Brokers, Emeryville, California), Steve Tanner (Tanner Insurance Brokers, Pleasanton, California), and John Langsfeld (Merritt & McKenzie, Atlanta) began to brainstorm and develop the concept of an information-sharing resource for brokers.

"When we all first got together, we talked about a better way to handle national and international issues for our clients," Flynn says. "The same issues would come up at joint sales meetings," Tanner adds. "We were worried about being vulnerable to international brokers. We knew John [Langsfeld] was working on an Internet and intranet venture at the time. We met in late 1996 and determined we shared a lot of common needs and concerns. We also talked about what kinds of opportunities existed."

Although Langsfeld's original idea had been to sell the concept of an Internet-based information resource to about 200 brokers across the country, he adjusted his marketing plan to target a smaller group of large regional brokers

who were on the cutting edge of electronic communication. RiskProNet was formed, and its members began to transform their vision into reality.

Into action

Immediately after RiskProNet's formation, responsibilities were defined, working criteria were established, and guidelines for participation were worked out. "The first criterion was that an owning brokerage must have $4 million in commission revenue," Tanner says. "They also had to be one of the top five producers in that region, be highly regarded, be proactive agents for their carriers, and uphold strong professional ethics."

With those standards in place, Flynn, Langsfeld, and Tanner began to recruit candidates for RiskProNet ownership, bringing together the first 13 potential member brokerages in a meeting in Phoenix. They set management goals and expansion criteria, deciding that they wanted to add another 15 territories to complement the mix and establish representation in virtually every major market in North America.

Today RiskProNet is comprised of 29 broker-owners in 36 states and Canada who are involved in personal and commercial property/casualty lines, employee benefits, and consulting. (Areas of expertise are highlighted in the sidebar on page 55.) Eight members are among the 100 largest brokers in the United States. RiskProNet represents combined annual revenue of $497 million and more than $5 billion of annual written premium, which makes it the fifth largest broker/producer organization in the United States.

John Wright, the recipient of the 2000 RiskProNet President's Award, addresses members.

"Membership in RiskProNet is by invitation only, and we don't envision getting much larger than 30 members anytime soon," says Flynn, who currently serves as the organization's president. Seven board members are chosen each year to govern RiskProNet. The organization currently has no employees but plans to hire an executive director, Flynn says. Four working committees guide the organization's operations and chart its course for the future: corporate governance, communications (which oversees the Web site and public relations), market relations, and new opportunities/partnerships. In addition to meetings of the board of directors and the committee chairs, which principals are required to attend, RiskProNet holds separate meetings for special interest groups like marketing managers, information technology professionals, and employee benefits specialists.

No risk transfer is done through RiskProNet. Each broker deals directly with the carrier to bind coverage and issue policies. In the future, Flynn says, members may have the ability to make submissions and issue insurance certificates online.

Industry consultant Rob Ekern says the design and philosophy of RiskProNet made it unique right from the start. "They established themselves in the pattern of a sales organization," he comments. "The principals were involved right from the beginning. Already, in three and a half years, they've put themselves in position to be a top agency affiliation group. Individuals have come together for a common cause. The concept is to create a knowledge-sharing base directed toward brokers serving clients, on a nationalized basis."

The decision to make RiskProNet an international rather than a national network was dictated by the realities of today's economic and business climate. "We decided we needed to be international in scope," Tanner explains. "If we weren't represented in Frankfort and Paris, the perception was that we couldn't handle the account even if the business was placed with a large international carrier. We were victims to dots on a map trying to do business."

Michael Flynn says that by tapping each other as resources, RiskProNet members are better equipped to deal with turmoil caused by industry consolidations and reunderwriting.

Before RiskProNet, Tanner says, he and other members had sometimes experienced difficulty in meeting the needs of their international clients. "When we formed the RiskProNet International network, our combined presence helped immensely by providing increased opportunities, allowing us to become a strategic partner with Globex International, and giving us the ability to service risks anywhere in the world," he comments.

For example, Tanner explains, suppose a RiskProNet member has a U.S.-based client that maintains a shipping warehouse in Lagos, Nigeria. "To meet the carrier's requirements, we might need to underwrite the location and obtain an inspection. We can contact a networked party and have the inspection done, buildings underwritten, and have contracts translated as needed. We have the immediate resources throughout the network to complete the task."

A powerful component of RiskProNet's international initiative is its contractual relationship with Globex International Group, Inc., a multinational risk management firm that operates worldwide via a network of 170 brokers in more than 100 countries. The Globex team offers 150 years of combined international brokerage and underwriting experience. Its services include risk identification and assessment, multinational program design, implementation, and control.

RiskProNet also makes it easier to do business domestically, Tanner points out. "In the United States there is great value, too, because we have networked brokers all over the country," he says. "If our RiskProNet partner in Chicago has a client for employee benefits with significant operations in the San Francisco Bay area, we can help our partner deal with some of the issues that are unique to the California environment, and we'll provide the service as if they were our very own customer. Servicing the client from thousands of miles away is no longer a problem."

RiskProNet is mainly a virtual network and has no physical headquarters. Members communicate through an Internet-based software program designed for their exclusive use. The secure system allows each member to search a member database for experts in any area of insurance. Members can post questions on a message board and receive quick answers from fellow members throughout the world. Members participate in online discussions, exchange advice and information, and even share insurance company intelligence. Flynn describes the pool of knowledge available as extensive. The ultimate goal is to serve each member broker's needs. "An associate in another part of the country or the world might know about special access to a market for cyberliability, propane carriers, or dynamite manufacturers. Questions can be posed within the network about these unique exposures," Flynn says. "The members don't even have to go to the Web site. They can program the system so they receive automatic e-mails from other members on their topic of expertise. There is also a broadcast e-mail function so members can send or request information in up to 13 different categories that include agency principals, producers, marketing departments, underwriting, claims, employee benefits, personal insurance, surety, and others. Each member firm is responsible for who is on the list and who the expert is within the brokerage. There are 800 experts in the consortium."

Now that RiskProNet International is firmly established, what does the future look like for this global resource-sharing network? Given the presence of the Internet and its ever-expanding use in business, Tanner comments, "We think we can handle all aspects of risk management worldwide, from A to Z. The Internet is a powerful tool for us and will continue to be a powerful tool, particularly when the property/casualty market hardens." Signs of price firming are already evident in many lines, he points out.

"RiskProNet will focus on the Internet in the coming year," Tanner continues. "The Internet is creating so many opportunities. We as an organization have to find out how to prioritize and define the opportunities that will be coming to us from all over the United States and the world. We'll need to pay attention to them to stay on the cutting edge of insurance and the business world."

To Flynn, the evolution of the Internet and computer technology is "going to be a critical piece for any business, not just the insurance industry. To succeed, businesses must be adept at managing this form of communication."

Continued consolidation among both carriers and brokers, Flynn says, combined with massive re-underwriting, will cause tremendous turmoil in the property/casualty business over the next year or two. "We're already seeing in members' e-mails that these trends are happening around the country," he comments. "It stresses the need for RiskProNet to tap into the many resources that were previously unconnected in terms of experience, programs, and markets. It's an unbelievable value for everyone in the group."

The next one to three years, Tanner adds, will see significant changes in the dynamics of the insurance marketplace. "The whole distribution system is going through a change," he observes. "We're seeing banks, Internet companies, and accounting firms getting into the insurance business. AON is doing business with State Farm. There are new paradigms. Companies like Gallagher are linking with agents and brokers. The whole mechanism of distribution is changing. The value of RiskProNet and its member firms is that it is planning strategies and setting directions to take us all into the future. We don't have to reinvent the wheel. We just make it roll smoother." *

Through RiskProNet International, member regional brokers have access to international expertise in a wide range of disciplines and markets:


What's New	About DRIB	Services	Products	Resources
Diversified Risk Insurance Brokers phone: 510/547-3203 fax: 510/547-5648 5900 Christie Ave Emeryville, California 94608 License # 0529776 copyright © 2001

GOING GLOBAL

RiskProNet is a virtual worldwide network whose members share expertise to serve clients around the globe

Birth of a vision

Into action

What's New

About DRIB

Services

Products

Resources

Diversified Risk Insurance Brokers phone: 510/547-3203 fax: 510/547-5648 5900 Christie Ave Emeryville, California 94608 License # 0529776 copyright © 2001

Diversified Risk Insurance Brokers
phone: 510/547-3203 fax: 510/547-5648
5900 Christie Ave
Emeryville, California 94608
License # 0529776
copyright © 2001