Marketing Agency of the Month
Doing it their way
Wright & Percy succeeds in its own inimitable way
By Dennis H. Pillsbury
Wright & Percy Insurance began life in the same manner as many independent insurance agencies. It opened its doors in a single office in Baton Rouge, Louisiana, to serve the property/casualty insurance needs of its community.
Established in 1882, the agency had grown by the start of this century to become Louisiana’s oldest and largest independently owned insurance agency. It also had expanded beyond Baton Rouge, opening offices in Lakes Charles and Shreveport in 1996, and in Alexandria the following year. It opened an office in Hammond in 2004.
Like many independent agencies, Wright & Percy had focused strictly on property/casualty coverages for the businesses and individuals in its marketing area. Then about 15 years ago, Kerry Drake joined the agency as a senior vice president to head up a fledgling life, health and corporate benefits division. He is responsible for building one of the fastest growing employee benefits divisions in Louisiana.
Today, that division accounts for 32% of the agency’s total revenue of approximately $23 million, or about $7.4 million. Commercial property/casualty is responsible for 60% of the revenue, with the balance coming from personal lines. The agency has 130 employees, with 110 in the Baton Rouge office. There are 25 people in the benefits department.
Benefits “benefits” P-C
One of the unique features of Wright & Percy is the way it entered the claims management field. The impetus actually came from the benefits division. Kerry had been in that field for 15 years prior to joining the agency and had always been involved in managing health care claims as a way to mitigate overall costs.
“I started hiring great people who were process driven,” Kerry says. “We brought in a pharmaceutical person who knew the inner workings of pharmacy contracts. The objective was to create a division that was able to identify potential big claims and begin mitigation efforts before things got out of hand.
“We started managing the risks on an ongoing basis, using current trends and medical data,” he says.” We are able to do medical trend analyses and actuarial analyses to determine how claims would look in the future. That allows us to get into the self-insured marketplace where employers really get behind risk mitigation efforts.”
Kerry continues: “Our efforts successfully reduced health care costs for our clients, which is one of the reasons we have been able to grow so rapidly. But 60% of our business is commercial property/casualty, where health care costs also play a significant role, especially in workers comp where medical costs now account for more than half the total claims costs.
“We started providing the same services on the property/casualty side. And we brought in phenomenal people to enhance this effort, including a loss control professional and a claims specialist who had worked for Travelers in its Atlanta office. This gave us the ability to talk to carriers in their language and work with them to set reserves and get the picks on comp lowered,” he explains.
Acquired by a bank
Of course, all these efforts, while successful over the long term, require capital; and in 2003, Wright & Percy made a decision that ran counter to conventional wisdom and agreed to an acquisition by BancorpSouth Bank, a subsidiary of BancorpSouth, Inc., one of the South’s fastest growing financial institutions, and, as Kerry points out, “one that did not have to take any TARP funds.”
Following the acquisition, the agency also acquired a new appellation, which delights those writers who are paid by the word—Wright & Percy Insurance, A Division of BancorpSouth Insurance Services, Inc.
Two years after the acquisition, Markham R. McKnight, who had served as president and CEO of Wright & Percy since 1994, was named president of BancorpSouth Insurance Services. Kerry took over as president and CEO of the agency in 2008. In that capacity he gets to continue to service his employee benefits clients and run the agency in his spare time.
And what a great time to take over, in the middle of what seems to be an interminable soft market and, more recently, a financial crisis that has had a devastating effect on one of the agency’s leading business niches—construction—an area that had enjoyed phenomenal growth after Hurricane Katrina.
But that did not discourage Kerry, who started investing in technology and human capital in an effort to create a new sales culture, one that utilizes the latest technology to expand service offerings and helps create competitive advantages for the agency’s clients as their insurance costs are reduced and loss control efforts result in operational efficiencies.
And the acquisition works
While the majority of bank/insurance agency mergers have served only to strengthen the gloom-and-doom predictions of those atrabilious prognosticators who so love to watch the seemingly insane machinations of an industry that can’t seem to maintain profitability for more than a few weeks, the acquisition of Wright & Percy turned out to be more of a triumph for the glass-half-full crowd. In short, it worked.
And there were synergies realized, although not along the lines that initially were suggested by those individuals who know nothing about either insurance or banking but are only too willing to tell us all how it would work out to everyone’s benefit. (They’re the same people who tell us that you can never lose money in real estate, and derivatives are a sure-fire investment.)
The synergies came not from the bank and insurance agency sharing information, but from the five agencies that comprise BancorpSouth Insurance Services helping each other out. “The bank is not telling us what to do,” Kerry points out, adding, however, that “there is pressure for us to grow.”
Ron Lensing, a principal with Ramsey, Krug, Farrell & Lensing (RKF&L), Little Rock, Arkansas, another BancorpSouth subsidiary, “has played a crucial role in helping us with our change to a sales culture,” Kerry says. “Ron comes over about every two months to help us.” (RKF&L was the Rough Notes Marketing Agency of the Month in May of 1999 and Ron serves on the Rough Notes Editorial Board.)
“It has really made a difference with us,” Kerry continues. “Our producers know things are different. Resting on a book of business just won’t cut it any longer. We have been driving that message home and are using tools like Salesforce (www.salesforce.com) to monitor our producers, not as a weapon, but as a tool to help them grow and increase their new business production. We like that ability and need it.
“We are looking at some minimum thresholds for new business,” he adds. “It’s imperative that we have that. Consider that, conservatively, workers comp is down about 20% as employment rolls have fallen and a number of accounts were lost due to acquisition by larger, out-of-state firms. Yet, we still anticipate growing by about 3%.”
The personal lines synergy
“When I took over, personal lines was one of our most profitable areas,” Kerry notes. “It consisted of seven people answering the phones. Clearly, we needed to expand that effort. We brought in Sherry Etheridge-Soileau to manage our private client group and help us target high net worth individuals and families.” Sherry came from Lewis Mohr Insurance Agency and had worked with a number of brokers, including Marsh.
“She came in and moved some people around to play to their strengths,” Kerry continues. “We needed to have people who were willing to reach out and touch people.
“We worked with our carriers and our bank partner to develop targets. We’ve already tripled the amount of personal lines business we write. In order to attract the high net worth client, we offer personalized risk management services, including videotaping of furnishings and other loss mitigation efforts. We’ve also implemented a referral program on personal lines accounts over $10,000. Sherry is working with a number of our corporate clients on a very personal level, which helps cement that relationship. She also has worked with people from RKF&L.”
“Being in Baton Rouge, we can’t afford to turn away any business,” Kerry admits. “However, we also recognized the need to develop areas of specialty where we had sufficient premium volume to justify such an approach. When we looked at our commercial book, we found that 25% was in marine, 30% in con-struction and 25% in property. We also have a significant amount of aviation business.
“It was clear that we needed people who were experts in those areas if we wanted to continue to provide the best service to our clients and to continue to grow in those areas. We have begun forming units where the account managers and producers will work just in their specialty, day in and day out. That’s all they’ll do. We anticipate that it will increase efficiency and give us a leg up vis à vis our competition.”
A good corporate citizen
Despite its growth, the agency remains very committed to the communities that it serves. The list of charities the agency and its people support is long and what follows is only a brief overview of some of its efforts.
Wright & Percy participates in the annual plane pull competition, which raises funds for ARC Baton Rouge, an organization that provides support services, education and other programs for people with disabilities and their families. The plane pull involves employees from Wright & Percy and other local business organizations and civic groups teaming up to pull a Fed-Ex Boeing 727 a distance of 12 feet. Employees who contributed to the pull got to wear jeans for a week. The agency wound up donating $3,000 to ARC Baton Rouge last year.
Wright & Percy Vice President Liz Treppendahl organized an effort for employees to become involved in the VIPS Everybody Reads program after learning about the high adult illiteracy rate in Baton Rouge. Last year, 10 employees volunteered as Reading Friends in five public schools, donating their time twice a month throughout the school year to read with an assigned student identified as reading below grade level.
Wright & Percy has sponsored the Walk to Defeat ALS (Lou Gehrig’s Disease) in each of the last three years, including putting a walk team together—Wright Stuff—to participate. Employees have donated and raised thousands of dollars each year for this effort.
Other organizations that have been recipients of Wright & Percy’s generosity include the Capital Area United Way, Baton Rouge General Hospital, Juvenile Diabetes Walkathon, and at least 20 other charities. The agency, along with other community leaders, contributed $600,000 in 1997 to LSU for an endowed insurance professorship.
And a good industry citizen
The agency is a strong believer in giving back to the industry and is a member of a number of insurance industry trade associations, including the CIAB, which Markham McKnight served as chairman; the Louisiana Insurance Guaranty Association, where Markham was treasurer; the Council of Employee Benefits Executives, where Kerry serves on the board; the Association of Health Insurance Agents; the Baton Rouge Association of Insurance and Financial Advisors; the Baton Rouge Association of Health Underwriters; the Health Agents PAC, where Kerry is a board member; and the Louisiana Health Care Commission.
“The industry has been very good to us,” Kerry notes, “and we believe it is incumbent on us to give back in any way we can. We support organizations that enhance the independent agency system and promote efforts to increase the professionalism of agents across the country,” Kerry says.
He continues: “We are very proud to promote continuing education in our agency and boast numerous in-house professionals with certifications that include CLU, CFP, CIC, RPLU, CUSA (Certified Utility Safety Administrator), CMR (Certified Mold Remediator), CPEA (Certified Professional Environmental Auditor), CPIA, and CPCU.”
That list alone makes it clear how much emphasis Wright & Percy places on safety and loss control and the investment it is willing to make to become a premier insurance organization that does far more than sell coverage.
Rough Notes is proud to recognize Wright & Percy as our Marketing Agency of the Month. It is an agency that continues to grow, despite adverse conditions in the marketplace and continues to serve its clients in the manner that represents the best of the independent agency system.