SCOTTSDALE, ARIZ.–Despite a heavy push for new business byinsurers, managing general agents should be prepared to take a passon questionable risks, an insurance executive said.

That advice came from Chris G. Behymer, vice president marketingfor Markel Southwest Underwriters Inc. out of Scottsdale, Ariz.,who also counseled that MGAs should ready their staff for the pointwhen rates begin to rise again.

Mr. Behymer made his suggestions yesterday during a lecture hereon “Insurance Trends” at the 82nd annual meeting of the AmericanAssociation of Managing General Agents.

He noted that the driver of the current insurance soft markettrend is an enormous amount of capital available to insurers whoare looking to employ it sometimes in markets they don'tunderstand.

Targets for his criticism were the technology market aggregatorswhere, he said, no underwriter is reviewing the risks beforeissuance of a quote or policy. If the premium is at or below acertain level, some underwriters are not reviewing the risk, hesaid. This practice, he observed, will only lead to problems lateron.

“It will catch up with them,” he said.

The industry, particularly investors pumping capital into thesystem that do not understand the industry, are helping insurers togrow markets, but not necessarily in an intelligent and productivemanner that truly understands risk, said Mr. Behymer.

“We have to do a better job of growing profitably andconsistently,” he said.

The industry has had the good luck of not suffering majorcatastrophes the past two years, but higher values incatastrophe-prone areas could spell a spectacular loss, possiblyover $100 billion, should there be a weather-related incident in avulnerable coastal region, Mr. Behymer cautioned.

There are a number of steps, he said, that the MGA communityshould take to prepare for the future.

Among the suggestions:

o Educate staff to be ready for changes that will come with thenext hard market.

o Build strong relationships now with carriers and customers byproviding great service and quick turnaround on quotes.

o Improve efficiency and communication with customers.

o Make sure your agent customers know the business they are inor it can prove to be a money losing proposition partnering withthem.

o Build and improve technology, but remember that it will onlybe effective when the previous suggestions have beenimplemented.

His final piece of advice to the MGAs was, “Know what [business]to walk away from and what makes sense. If you don't think it makessense, say it doesn't and that you'll take a look at it nexttime.”