Marketing Agency of the Month

Specialty success

Small town agency makes big splash in niche marketing

By Dennis H. Pillsbury

"If you plan on being a successful and growing agency in a town with a population of 4,500 people, you need a good game plan," says William "Bill" Chalmers, general manager and treasurer of the Chalmers Insurance Group, Bridgton, Maine. For Chalmers, part of that game plan was developing a specialty. But it wasn't a case of following the herd—with niche marketing today being something that everybody does or tries to do. In fact, one could argue that Chalmers was a pioneer in niche marketing, since it started its specialty marketing effort to boys and girls camps in the early 1900s. One of those camps, Camp Wigwam in Waterford, has been insured by the agency for more than a century. Talk about retention!

Of course, retention doesn't just happen. It's earned every day. Which means that the Chalmers Group and its predecessors earned that client's loyalty by the service it has provided to that client for more than 36,500 days. For all that time, each generation of owners adhered to a principle established by one of the early agency owners, Bill's grandfather Harold Braithwaite, who enunciated what became the agency's unofficial slogan: "A satisfied customer is our first consideration." And putting the customer first has been a hallmark of the agency throughout its history of more than 150 years.

The Chalmers Group traces its roots back to 1857 when George G. Wight established Bridgton's first insurance agency and one of the first businesses on the town's Main Street. He was succeeded by Horace B. Libby, whom he named a partner when he was gravely ill. Unfortunately, George never recovered from his illness and Horace suddenly found himself the owner of a business for which he had very little experience, having worked as a clerk in a dry goods store prior to joining the agency. He elicited the aid of his son, Norman, who was studying to become a printer. Although they had no insurance background, they did have something far more important—a reputation for being honest and trustworthy. In fact, when they applied for insurance company appointments, local businessmen and leaders signed a petition asking the companies to appoint Libby as their agent. It worked.

New technologies

In addition to insuring businesses in Bridgton, Libby wrote policies in Waterford, Harrison, Naples, Casco, Sebago, Denmark, Sweden, Lovell and Hiram. Each new policy meant a personal visit on horseback to the business to draw diagrams of the insured building. If the trip were to Casco, the horse would have to rest the entire day before making the trip. But then, along came the bicycle, allowing Libby to travel at a leisurely pace, chatting with new prospects along the way. In the office, automation made its first inroad with the addition of a Remington typewriter in 1895, followed by a telephone connection between Bridgton and Harrison and, later, the addition of electrotypes to reproduce frequently used forms.

When his dad passed away in 1911, Norman ran the agency by himself until he was ready to retire. In 1926, he approached a general agent, Harold G. Braithwaite, whom he admired for his business ability, and asked him if he knew of someone who would be interested in buying the agency. Harold said he was, and they reached a handshake agreement where Harold put one dollar down and promised to pay an additional $10,000 sometime after he took over ownership in 1928.

Harold already had a strong insurance background and stepped into the agency with several company appointments. He also knew the importance of relationships and quickly became a vital member of the community of Bridgton, choosing to live in town after moving there from Arlington, Massachusetts. He was active in the church and the Masonic Lodge, as well as serving as a trustee at the hospital and as a town selectman for nine years. In addition to providing protection to the individuals and businesses in the area, Harold recognized the importance of the camp business and expanded on it by establishing a specialty in insuring boys and girls summer camps, CampUSA, that continues today, a move that helped the agency grow—even during The Great Depression—and that allowed him to pay Norman quickly.

Herb Chalmers learns the business

By 1948, the agency had reached a size where Harold knew he either needed to take on a partner or sell the business. He talked to his son-in-law, Herbert W. Chalmers, who already had an 18-year career with the telephone company, about becoming his partner. Herb was a manager in Providence, Rhode Island, and initially felt he would stick with the phone company. But after talking with his wife, Marney, they reached a decision to get into the insurance business and move to Bridgton. The phone company countered by offering him a promotion to resident vice president but, fortunately for the insurance business, he had made up his mind and the family went to Bridgton.

Since he knew nothing about the insurance business, Herb set about to learn by attending the Hartford Learning Center. He immersed himself in insurance, got his producer's license, and then jumped right in with both feet.

In many ways, Herb is responsible for a dramatic change, taking the agency from a very successful agency to a very successful business. One of his early decisions was moving the agency from its location above the local drug store to its current location in its own building on the corner of Main and Bacon Streets. He also saw another opportunity early in his career to further capitalize on the agency's expertise in camps—real estate.

Only three years after getting his producer's license, Herb obtained his Maine real estate license. It was a logical extension of the services the agency offered to the camp market. The agency already provided appraisals of the property in order to provide the proper insurance coverage, so they knew the value of the property. That was when the firm's name was changed to Chalmers Insurance and Real Estate Agency.

As the agency's current president Bruce Chalmers points out: "The tie-in with real estate has been very important and we've expanded that area since Dad's day. It has really helped get us through some very difficult times for insurance agents in Maine."

Herb also worked with a wholesaler to develop an all-risk floater for camps that covered all camp equipment.

Additionally, he recognized an opportunity to expand by acquiring other independent agencies. The first such acquisition occurred in the early 1950s when Chalmers purchased two of its three competitors in Bridgton.

Constant innovation

Today, Bill and Bruce continue the tradition of placing the policyholder's needs first. And they have also continued the practice of constant innovation that is an obvious outgrowth of that strategy. The camp program has grown and changed under their leadership, as liability coverages have been expanded to recognize the growing risk of insuring places where the children of all types of people spend their time.

Bill notes that "Acadia Insurance has been our partner in this endeavor. A lot of underwriters are afraid of the liability exposures, but Acadia has worked with us to develop a risk management program and policy forms that offer broad coverage to more than 100 camps in the area. Thanks to the plethora of lakes in the area, we are in the epicenter of boys and girls camps."

"Our expertise in the camp market also translated well into the ski business," Bruce notes. "Dad got us involved initially and we've expanded that effort successfully. Today, we insure the majority of the ski areas in the state."

Bill adds: "We also saw an opportunity to market an accident and sickness insurance product to campers." Bruce and Bill partnered with Frank Cavanar to establish The National Accident and Health General Agency, Inc. (NAHGA), in New Hampshire, to provide insurance to youth groups. "That has grown significantly. We now insure a lot of colleges for sports accidents and have about 500 accounts nationally. In order to properly handle the claims in this area, we established our own TPA, NAHGA Claims Services."  Tom and Nicholas Chalmers are also involved in this part of the business

Acquisitions continue

Bruce and Bill also continued their dad's strategy of growth through acquisition. "Over the last 50 years, we have purchased more than 35 agencies," Bruce says. "We have combined many of these and some have become branches of the Chalmers Group, a name we adopted to reflect our expansion beyond our Bridgton roots. Today, we have 112 employees in nine locations, including three in New Hampshire, and have more than $9 million in total revenues.

"We have 16 producers—four in personal lines and 12 in commercial—to help us continue to develop new clients and accounts."

Bill adds: "While the camp niche is extremely important to us, we continue to provide insurance coverage to businesses and individuals in the area and treat them with the same high level of service as we provide to our niche markets."

Bruce's son, Jim Chalmers, the agency's newest principal, points out that "10 of the commercial lines producers are out there going after Main Street businesses. Our office in Gorham, just outside of Portland, is really growing. We're starting to make significant inroads into the businesses located along the seacoast. That's one reason that acquisitions really have been an important part of our growth strategy. It opens up new territories for our producers, as well as adding talent to the Chalmers Group."

Personal lines is key

Personal lines business represents nearly half of the agency's revenues. "Two of the producers in this area concentrate solely on group sales," Bill says, adding with obvious pride that the personal lines department is headed up by his daughter Dorothy. "She was one of the people who recognized this area as such a tremendous opportunity. And it has really added a lot to our personal lines growth. Commercial clients love it because it's a benefit they don't have to pay for, and their employees love it because it saves them money and they don't have to worry about bills coming in at inopportune times. It's all handled through payroll deduction. And it's really attractive to the companies that we use, because every insured has one positive underwriting criterion—he or she is employed.

"Dottie works with the banks on group sales to set up the payroll deduction plan," Bill continues. He notes that, unlike other benefit programs, "penetration of 25% is great; our best is around 45%."

He adds: "Having a number of companies writing the coverage is very important. You want to be certain that you will be able to cover all the employees who opt for the coverage as well as be able to provide competitive rates. Sometimes, an employee may not meet the underwriting criteria of one company, but could very well be exactly the kind of risk another company specializes in."

Creating the win-win-win

While putting the client first is Chalmers' paramount objective, the agency also works very hard to "deliver profitability and growth to our company partners," Jim says. "We look to match our clients with companies that want their business because they are aligned with the company's underwriting objectives. This allows us to deliver the best coverage for our clients, while at the same time supporting the company's goals. In return, the companies have helped us with our advertising in local newspapers. It's a win for everyone involved."

Bill goes on to say: "Being at the presidential achievement level, or its equivalent, with our companies is a big deal for us, because it represents a strong relationship. We recently were recognized by Acadia for hitting the $5 million mark with the company. We're one of only four agencies to reach this award level. We know the underwriters and the adjusters who will be taking care of our clients, as well as having a good relationship with members of top management."

Bruce continues by pointing to the agency's golf outing. "We invite the company presidents and many come. We also invite the heads of the claims departments and the head under-writers. If they don't play golf, we invite them for dinner. We also invite other agencies in the area. They get to see that we are fair and honorable and, when they are ready to retire, may look to us if they don't have a perpetuation plan."

And, of course, the people at the agency, many of whom have been with the agency for 20 years or more, are active in their communities and industry associations. Both Bill and Bruce are past president of the Big "I" of Maine as were their father and grandfather. Bruce and Bill also served as State National Directors and have a long list of industry and community associations that they serve, continuing a tradition started by the early founders of the agency.

The Chalmers Group represents all the strengths of the independent agency system—its people put the client first, are knowledgeable and committed to service, have a long-term approach to the business, and are good corporate citizens. Rough Notes is proud to recognize the agency as our Marketing Agency of the Month.