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His company, Lakewood Ranch-based MGA Insurance Group, has spent $250,000 on software, hardware and intricate data-encrypted cyber security upgrades in 2014 alone, and at least $3 million over the last five years. With a payroll of around 45 people, that's an expense of more than $72,000 per employee.
The outlay doesn't even include this unusual tidbit: A pair of MGA employees are assigned exclusively to improve the firm's search engine optimization and social media presence — non-revenue generating positions that hold cachet at MGA. “We don't want to have a customer surf on the Internet,” Marinaccio says. “We want a customer on the Internet to come into our funnel.”
Marinaccio, who founded the company in 1984 in Chicago, says the investment is more of a strategy component than a risk. It goes to the crux of what he says is his No. 1 goal at MGA. That's to make it easy for customers to do business with the company, an increasingly complicated task in the ever-shifting insurance industry.
The firm's core product is health insurance benefits consulting, and it also offers other business and personal insurance lines. One area it's traditionally excelled in is insurance options for independent agents who work for other firms nationwide. MGA also plans to launch a private health care insurance exchange later this year and use it as a springboard to sell other services and products.
“The broker that provides the easiest access for customers will be the broker that succeeds,” says Marinaccio. “Our commitment is not only to be successful but to be a dominant broker nationwide. If you don't spend money on technology, your consumers will migrate to those who have the technological advantage.”
Marinaccio's theory is part of the reason why MGA is on a growth spurt. Premiums are up 58.8% since 2011, from $51 million to $81 million last year. Marinaccio projects MGA will reach at least $97 million in premiums in 2014, which would roughly double its size in Chicago from 1984-1999, when it peaked at $50 million and 22 employees.
The company also has a new headquarters. It's a 32,000-square-foot, two-story complex it bought in east Manatee County in December 2012 and moved into late last year. The firm paid $2.86 million for the building, the former regional office for homebuilder Taylor Woodrow. It spent another $1.5 million on an extensive renovation of the second floor, where its 18,000-square-foot office is located. Doctors and other professionals lease space on the ground floor.
Big differentiator
MGA's growth surge should accelerate more over the next three to five years, says Marinaccio, due mostly to a pair of factors. One is the firm's niche in selling insurance and benefits consulting services to independent insurance agents — affinity products in industry lingo. So MGA sells insurance plans and packages, with features that include health, life and dental, plus professional liability, to agents who work for firms like Aflac, Aetna and Great American Insurance. The firm markets its affinity products directly to agents and through trade shows and industry organizations.
Marinaccio has been in this niche since the 1980s. But with the projected rise of the freelance economy, where more people choose to work on their own and file 1099 independent contractor forms with the IRS, a boost could be forthcoming. “That's the biggest differentiator for us,” Marinaccio says. “All 1099 agents have benefit needs.”
The second part of a projected increase in sales and premiums is the private health care insurance exchange MGA intends to launch later this year. It's a project that will include at least eight to 10 new hires for the firm's call center. Marinaccio considers the exchange a logical way to get into what could be a lucrative market of thousands of new potential customers. A few other Gulf Coast insurance firms have also launched exchanges. Says Marinaccio: “There are all these people who didn't have health insurance at this time last year and now they have it.”
But Marinaccio, again making it easy for people to do business with MGA, wants to draw exchange customers into the firm, not just provide a portal to federally mandated insurance. “We want to combine health insurance with additional products,” Marinaccio says. “We want to make it more comprehensive.”
Approaches like that are the hallmarks of Marinaccio's business mindset, say people who know him and have worked with him. Brian Volner, a senior vice president at St. Petersburg-based C1 Bank, says Marinaccio is “the consummate entrepreneur. He's always trying to figure out a way to make his business better and more efficient.”
Based primarily in Manatee County, Volner is also one of multiple area business professionals who have received a Marinaccio introduction to another business leader. Marinaccio has mastered the fine art of being a connecter — not just someone who makes connections. “He's had amazing career,” says Volner, “and he's passionate about wanting to see other businesses succeed.”
Educated employees
Marinaccio's business is also wrapped around his family. His wife, Ann Marie Marinaccio, is the firm's CFO, and the couple's daughter, Lori Ann Marinaccio, is chief operating officer. A marketing and sales manager with General Electric before he went into insurance, Marinaccio moved the company from Chicago to Lakewood Ranch in 1999. “Florida was always on our radar screen,” he says, “but we thought that would be for retirement.”
The company has since become one the most recognizable corporate citizens in the Lakewood Ranch business community, though 65% of its clients are outside the region. In 2004 Marinaccio helped found the Lakewood Ranch Business Alliance, a pro-business organization that recently moved into space in the MGA building.
That building, with a backside that faces busy University Parkway, just east of Interstate 75, is the lynchpin to the firm's projected growth, and the call center inside is the centerpiece. Marinaccio says the employees who staff the call center aren't banished to the back of the line in esteem or hierarchy, like at some other companies.
Call center staffers, for example, regularly attend other department staff meetings and then report back to their colleagues. They get a chance to weigh in on strategy and other key decisions. “It gives them a feel and a deeper understanding of how the company is braided together,” says Human Resources Manager Lois Leino.
The idea to send call center employees to other department meetings stems from Marinaccio's belief that all MGA employees should have a top-notch education. Not only on the firm's strategy and products, but in the industry and in life. Even the clerical staff at MGA is trained in insurance industry polices and procedures.
Educating employees also addresses one of Marinaccio's biggest challenges: hiring and retaining top people. It's a challenge many other business face. “An educated employee,” Marinaccio says, “is a valuable employee from our point of view.”
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