What’s Driving the Success of a Five-Star Wholesaler?
In the dynamic world of insurance, wholesale brokers and managing general agents (MGAs) play a pivotal role in connecting retail brokers with specialized coverage for complex and hard-to-place risks. The 2024 and 2025 editions of Insurance Business America highlight the exceptional performance of five-star wholesalers, recognized for their ability to deliver outstanding service, innovative solutions, and niche expertise. But what exactly drives the success of these top-tier wholesalers in today’s competitive market? This article explores the key factors behind their achievements, drawing on industry trends and insights from leading firms.
Specialized Expertise in Niche Markets
One of the defining characteristics of a five-star wholesaler is their deep expertise in niche and high-risk insurance markets. Unlike retail brokers, who often handle standard policies, wholesalers specialize in areas such as excess and surplus (E&S) lines, high net worth coverage, and emerging risks like cannabis or construction wrap-up insurance. For example, Johnson & Johnson, a five-star wholesaler, secured a silver medal for its High Net Worth specialization due to its dedicated team of underwriters offering tailored products. Similarly, Jencap has capitalized on emerging risks by introducing a cannabis site pollution liability program and a construction wrap-up practice, addressing coverage gaps in these unique sectors.
This focus on specialization allows wholesalers to provide solutions that standard carriers often avoid. The ability to craft innovative policies for complex risks—such as parametric flood offerings or coverage for vacant and tenant-occupied manufactured homes—sets these firms apart. As Peter Burrous of Johnson & Johnson notes, their “family culture” and cohesive team enable them to deliver excellent product arrays with strong growth potential.
Leveraging Data and Technology
Technology is a cornerstone of success for five-star wholesalers. Firms like Gorst & Compass have integrated advanced tools, such as APIs and third-party data, to streamline operations and deliver quick solutions to retail partners. Their focus on technology enhances efficiency in quoting and policy issuance, allowing them to meet the fast-paced demands of the market. USG Insurance Services, another five-star wholesaler, utilizes its proprietary I3X: Insurance 3 eXchange platform to expedite the quote process and improve service delivery, contributing to its $200-plus million book of business across 50 states.
The use of data-driven insights also plays a critical role. Wholesalers like Jencap rely on marketing teams that actively collect feedback from the field, enabling underwriters to tweak existing products or develop new ones tailored to market needs. This data-driven approach helps maintain low loss ratios while meeting client expectations. Additionally, the industry is exploring artificial intelligence (AI) to further enhance underwriting accuracy and customer experience, signaling a forward-thinking approach to innovation.
Strong Relationships with Retail Brokers
Building and maintaining strong relationships with retail brokers is another key driver of success. Five-star wholesalers prioritize exceptional service, earning high ratings in categories like responsiveness, product knowledge, and underwriting expertise. According to Insurance Business America, brokers rated wholesalers on a scale of 1 to 10 across multiple criteria, with five-star designations awarded to those scoring 8 or higher in at least one category. All-Star designations were given to firms excelling across all categories, a testament to their comprehensive service excellence.
Firms like Burns & Wilcox, the largest independent wholesaler in North America, emphasize a relentless commitment to their retail partners. With over 2,000 professionals across 60 offices, Burns & Wilcox delivers solutions quickly and efficiently, fostering trust and long-term partnerships. Their focus on “the right answer, right now” resonates with retail brokers seeking reliable support for complex risks.
Adapting to Market Trends and Consolidation
The wholesale insurance market has seen significant growth, with the E&S sector reporting a 17.4% increase in direct premiums written in 2023, reaching a record $115.6 billion. This growth, outpacing the broader property and casualty industry, is driven by rising demand for coverage of complex risks like climate change and cybersecurity. Five-star wholesalers have capitalized on this trend by expanding their geographic reach and product offerings, often through strategic acquisitions. For instance, Johnson & Johnson transitioned from a regional to a national player by opening offices in Dallas, Phoenix, and Oregon, enhancing its market presence.
However, the market is also undergoing significant consolidation, with 95% of the brokerage business now consolidated due to mergers and acquisitions (M&A). While this creates opportunities for larger wholesalers to access more customers and carriers, it also raises concerns about conflicts of interest, particularly when retail agencies own wholesalers. Five-star wholesalers like Johnson & Johnson aim to remain independent and family-held, avoiding being “gobbled up” in the M&A frenzy, which allows them to maintain their focus on client-centric solutions.
Innovative Marketing and Branding
Effective marketing and branding strategies are critical for five-star wholesalers to stand out in a crowded market. While marketing support is often a lower priority for producers, top wholesalers invest in creative initiatives to boost visibility. Jencap, for example, sponsored a fleet of pedicabs at the WSIA 2023 conference, offering complimentary rides to attendees while showcasing their brand. Similarly, Wholesure’s success is attributed to its aggressive recruitment of specialists and robust marketing efforts, which have driven significant growth in 2024 with ambitious goals for 2025.
Producers have praised wholesalers with strong marketing teams for their transparency and social media presence, though some suggest improvements like customizable flyers, incentives for advertising costs, and more face-to-face engagement with marketing reps. These efforts help wholesalers strengthen relationships with retail partners and enhance their market position.
Navigating Regulatory Challenges
The wholesale insurance industry, particularly the E&S market, operates with greater flexibility due to its use of non-admitted carriers, which are not subject to state insurance regulations. This allows wholesalers to offer competitive pricing and coverage for unusual risks. However, as the market grows, regulatory challenges may emerge, especially if the market softens. The Wholesale & Specialty Insurance Association (WSIA) advocates for policies like the Nonadmitted and Reinsurance Reform Act (NRRA) to ensure uniform regulation and protect the industry’s ability to address complex risks, such as private flood insurance. Five-star wholesalers stay ahead by aligning with these advocacy efforts, ensuring compliance while maintaining their competitive edge.
Conclusion
The success of five-star wholesalers stems from a combination of specialized expertise, innovative use of technology, strong relationships with retail brokers, strategic market expansion, and creative marketing. Firms like Johnson & Johnson, Jencap, Burns & Wilcox, and USG Insurance Services exemplify these qualities, earning high praise from brokers for their ability to place niche risks and deliver exceptional service. As the wholesale insurance market continues to evolve, driven by growth in the E&S sector and ongoing consolidation, these wholesalers are well-positioned to lead the industry by adapting to emerging risks and leveraging technology to meet client needs. Their commitment to innovation, relationships, and market responsiveness ensures they remain at the forefront of the insurance landscape.