They broke new ground, made the most out of seemingly impossible situations, and distinguished themselves in a variety of creative ways. They are exceptional innovators within our industry, and they each have a story to tell.

Richard Kerr, CIC, ARM

Chief Executive Officer, MarketScout, Dallas, TX

Innovation: Created an online insurance exchange, www.marketscout.com, which has over 50,000 registered users. MarketScout has also developed CIC Select, a program that offers “elite” programs for those who have earned the CIC designation.

From 1998 to 2001, over 240 e-insurance platforms were launched, raising some $2 billion in the process. Today, only a handful are left, including Richard Kerr’s MarketScout.com, a successful multi-million-dollar revenue online insurance exchange designed to help retail agents rather than compete with them. In addition, MarketScout has developed a program for CIC agents; enabling them to get special rates for a variety of programs they might normally not have had access to. Prior to MarketScout, Kerr was a partner in the Arthur L. Owen retail agency, chairman and CEO of Lambert Fenchurch U.S. Holdings, and president of Sedgwick James of Texas (Marsh). Kerr is also editor of the trend report, “Market Barometer,” which is published by over 20 insurance trade journals on a monthly basis; co-founder of the James K. Ruble Oil and Gas Seminar; and a member of The National Alliance national faculty. He founded Heroes! to support American troops returning from active duty, and has generated support for this initiative throughout the insurance industry. Additionally, he originated Kerr Educational Trust for college students in need of tuition assistance and is a board member of the Leukemia Society.

Tell us a little about MarketScout.

MarketScout was launched in June of 2000 during the “dot com” boom with the plan to be an electronic insurance exchange where independent retail agents come to get market solutions. MarketScout is a business-to-business internet exchange where retail insurance agents can find solutions for marketing problems, premium financing, staffing and many other insurance and business challenges. MarketScout deals exclusively via retail agents.

How long have you been an agent? Can you give me a short history of your career?

After earning an insurance degree from the University of Texas at Austin I went to work for a company you now know as Tillinghast. Subsequently, I became a partner in a retail insurance agency which was later purchased by Sedgwick. Sedgwick was the second largest broker in the world at that time so this was a great opportunity for me to learn from many talented people.

I ultimately became Chairman of their US energy company and president of their retail operations in Texas. Eventually I felt the need to start my own company so I went out to raise money to form a new retail insurance brokerage. I raised capital in London from a company that is now called Heath Lambert. I spent five years developing the United States for Heath Lambert. We purchased retail agents, MGA’s, Taps, employee benefits companies and formed startup wholesale brokers and MGA’s. The management team was granted a 20% interest in the companies we developed. It was a great run. People made a lot of money. We were very fortunate to have this opportunity.

My next venture was to raise money on Wall Street to do an eInsurance firm, which was MarketScout. MarketScout is now so time will tell as to how good this one will be.

Tell me about CIC Select.

It’s the other segment of MarketScout. The intention is to connect quality insurance companies with high quality agents. CIC agents are high quality. AIG ended up becoming the primary carrier for CIC Select. The connection has been positive for everyone with millions of dollars of premiums written every quarter. For more information you may go to www.cicselect.com.

So many of these agents couldn’t get plant with AIG otherwise?

That’s correct, or if they could “plant” with AIG, it’s possible CIC Select would be the better avenue to access AIG.

Why do you think MarketScout succeeded whereas others didn’t?

First and foremost, we were the early adopter of utilizing the internet as a distribution tool. We are unique because we have patented technology which enables us to distribute products very efficiently to thousands of agents in an organized fashion. Also, we do not deal direct with the consumer and require the consumer use a retail agent. Agents trust MarketScout will not approach their customers direct.

Briefly explain your vision for your company and its mission? Has it changed over the years?

Our vision has not changed since the day we launched the company four years ago. We are an exchange platform where retail insurance agents can find markets or get solutions for problems. My analogy for people who don’t know anything about the insurance business is that MarketScout is like a grocery store. The grocery store might not make money off bread and milk, but they have to sell the bread and milk as a convenience to their customer. They want to assure that when a consumer comes into their store, it is a pleasant, all-inclusive buying experience. While selling bread and milk may not make money the storeowner hopes their customer will buy some tomato sauce while in the store because that is a product which is very profitable. Thus, by selling bread and milk at a break even pace, it gets the customers in the door and gives the storeowner a chance to sell other more profitable products. It’s basically the same for MarketScout. We provide a platform for agents to buy many products, some of which we make very little money on and some which are quite profitable. But we must offer all products lest our agents go somewhere else that is more convenient.

So can you tell us what areas are that you make the money on?

We make our money in areas where we have underwriting authority or a particular specialty expertise. We do not make money on those products which are posted and the user is sent to a third party specialist. However, these specialists are an important part of our platform as they provide our users much needed additional products. We spend a lot of time and money assuring our third party specialists are of the highest quality.

How many products are those?

Approximately 20.

How have you been able to help others in your organization develop the skills they need?

We implement a mentoring program. We just hired two people and to support their development, we have put together a mentoring program where they work very closely with the manager of a particular specialty division. We also have them work with some of our technical team members because we want them to be not only proficient in insurance, but to have a working knowledge of the internet and how to use automation as a distribution vehicle. We also utilize the National Alliance’s CIC and CISR course curriculum.

What advice would you give agents on how to work with insurers and other providers of client services?

Become a specialist in areas where you have the most product knowledge. Always do what is best for the insurance buyer.

Tell me about technology in your office. Do you use any advance technology?What’s your theory on it?

We use technology extensively. MarketScout built its own patented web distribution vehicle, accounting system and agency management system. We also build technology solutions for other agents, brokers and insurance companies.

In partnership with MapInfo we have built RiskReview which utilizes geocoding to track exposures in relation to pre-determined geographical areas and exposure sets. There is a great demo at www.riskreview.net if you want to see more.

Any other technology pieces that you want to mention?

I could go on for quite some time on our various technology plays, particularly since we are an internet and automation company. For now, I will simply summarize by stating we are constantly innovating new products which help insurance companies and agencies become more efficient, with a particular emphasis on internet distribution.

How have you contributed to the insurance industry?

I’ve been a speaker for the National Alliance for quite some time on various topics at the producer school and on some of their energy symposiums and things of that nature. I wrote several technical insurance books that are still used by the insurance industry. I support many industry foundations and serve as a speaker at industry functions.

How have you contributed to your community?

Now you’re getting into one of my favorite topics. We are huge on giving back to the community. I serve as a board member of the Leukemia and Lymphoma Society and various other charitable foundations.

As a company, we are constantly doing community support projects. We have been a long time supporter of the Barbara Jordan Academy which is a school for under privileged children.

We founded Heroes! which is a celebration to show our returning soldiers we appreciate their efforts. Every September 11 th we hold a major celebration for over 100 soldiers and their spouses. We hope this celebration is adopted by other industry leaders in cities across the country. The event includes flying the soldiers to Dallas, putting them in a top notch hotel for the weekend, taking them to a very nice country club, feeding them dinner followed by a dance and then taking them to a professional baseball game the next day. They also get prizes at the event and get to meet sports heroes such as NFL Hall of Famer Roger Staubach.

It’s a way for us to say thank you to those troops who fight for our freedom. We all want to build a great business and make money but you must give something back to your community. This is one of our ways of giving back.

 What has impacted your business most in the last five years?

The Internet.

What about opportunities and threats for independent agencies. What do you see out there for them?

There will be many new independent agencies because of industry regulation and new market access. With MarketScout, good agents can get appointed and immediately have access to numerous quality carriers. Prior to 2000, access to carriers was a major obstacle to forming your own agency. That obstacle is gone.

Any threats to them?

There is a greater threat to large brokerages than to independent agents. I feel the independent agent will always survive if they are capable of adjusting to this constantly changing business and keeping the interests of their client first.