Marketing Agency of the Month

From sprinter to iron man

Veteran insurance people start century with a bang

By Dennis H. Pillsbury

When Steve Nesbitt started S.S. Nesbitt & Company, Birmingham, Alabama, in 2000, he was joined by two other industry veterans, who all seemed intent on disproving the adage about being unable to teach old dogs new tricks. Steve had been an underwriter with USF&G and then worked for the brokerage firm of Hilb Rogal & Hobbs (now part of Willis). Selina Simpson also came over from HRH and Bill Lyle was with Home Insurance Company before joining the agency.

"It was really kind of fun in those first few years with the three of us just developing new business," S.S. Nesbitt President Steve remembers. "We were fortunate to have a few nice sized accounts that moved with me when I left HRH, but, in general, we didn't have to worry about renewals or claims, we just had to get out there and sell."

Steve adds, "I think we were all relieved to get out from under the red tape that is always part of a large corporation and get back to what we loved—developing relationships, getting referrals and helping people put together a risk management program that served to differentiate us from our competition."

Selina Simpson, vice president and founding partner, helped this endeavor by entering an underserved market—all aspects of student housing, including construction. That became the agency's first niche. Selina has continued to develop her expertise in that market and today is considered one of the foremost individuals in the area. In fact, other bond underwriters call her and hire her to review documents.

That niche has continued to grow, and in 2004 the agency hired Claire D. Wright, vice president of operations, to help with claims management in that niche. Claire had been a risk manager with one of the agency's larger clients that built student housing. In 2008, she transitioned to agency operations and marketing as the agency's growth necessitated a larger administrative staff.

Two years after the agency's founding, it had reached $1 million in revenues and it was clear that more people were needed. Winn Kelley, senior vice president-commercial lines, joined the agency from HRH in 2002, bringing with him 21 years of experience and a strong knowledge of the construction business.

Steve continues, "We started out with a philosophy that we later learned was the Purple Cow philosophy. Being the new kids on the block, we realized that we had to differentiate ourselves in some way and it wasn't going to be price or markets, since nearly everyone had access to the same companies. It was going to have to be our ability to put together a program that recognized the unique nature and risk management needs of each of our clients.

"We were working on just what that would mean when I ran into Scott Addis (president and CEO of The Addis Group and Addis Intellectual Capital, LLC) at a Chubb Insurance Company meeting. He was giving a presentation on his Organic Growth Engine™ (OGE) and it resonated perfectly with us. We signed up to become OGE members and started to add the pieces that weren't already part of our efforts."

Developing staying power

S.S. Nesbitt had proven that it could compete in a sprint, but the next phase was developing the endurance to run a marathon or, perhaps more correctly, a triathlon where a host of different disciplines are needed to be successful. OGE—with its six integrated systems—provided the framework for the agency to achieve high closing ratios for new business as well as consistently high retention rates for current business. (For additional information on OGE, see the "Beyond Insurance" column in the December 2007 issue of Rough Notes magazine.)

One of the key ingredients of the S.S. Nesbitt approach is consultative selling where "we sit down with clients and prospects and regularly review their insurance portfolio to determine if it continues to meet their needs," Steve says, "while at the same time finding ways to reduce the overall cost of risk transfer for the client. Our ultimate goal is to transform the agency in the eyes of each client from a seller of insurance to a key business partner for each client."

One example of the success of this approach is the Coosa Valley Medical Center, located southeast of Birmingham. S.S. Nesbitt Risk Management Consultant and Agent Jeremy Long reviewed the hospital's insurance portfolio and recommended changes that better protected the hospital while reducing its overall costs. By identifying and mitigating problem issues involving workers compensation exposures, the agency was able to reduce the hospital's workers compensation costs by 50%. Thanks to these efforts, the agency became the center's exclusive risk management partner in 2006. And Coosa Valley Medical Center CEO Glenn Sisk makes it clear that this was the start of an ongoing relationship.

"S.S. Nesbitt has helped ensure that Coosa Valley Medical Center, which is the largest employer in our community, will be here long term," Glenn comments. "They want to make sure we are okay today, and they also want to make sure we are okay 10 years from now. The S.S. Nesbitt team has done an outstanding job of providing a level of comfort that we are doing everything we need to do, reducing our risk and helping us ensure that our costs are maintained at an appropriate level."

Needless to say, this has led to a number of referrals in the medical field, and that has become an area of specialization for the agency.

Niching leads to referrals

"We have always been a generalist, building relationships with all businesses in the area," Winn notes. However, "Whenever we do a great job for a particular business, this often results in referrals that grow into a niche specialty for the agency."

Another example of this is the country club business. Winn worked with one of the young producers, introducing him to his country club. It was love at first sight. The young producer became involved in the Club Managers Association and "now he's writing country clubs and dinner clubs all over the state," Steve points out.

"That pattern has continued with other new producers," Steve adds. "We expect them to start out cold-calling, but point out the advantages of developing a base for referrals. And the successful ones see the wisdom of that approach, as well as the fun in working with a business that you really enjoy. Another one of our young producers has focused on coastal business. We're only about four hours from the ocean. He's parlayed his interest in that area into a specialty writing condo associations, many of which are located along the ocean."

The tail wagging the dog

Winn points to an interesting change that has taken place in the way the agency markets and cross-sells its products. "Property and casualty is really no longer an entry point. The soft market means that prospects rarely have experienced any pain in that area. Fortunately, we have a strong presence in the benefits arena that came to us when we purchased ANB Insurance Services in 2007. I constantly get referrals from our benefits team to provide the property and casualty coverage for their clients and prospects.

"Of course, the key to this is the fact that we use the same consultative approach in benefits that we use in property and casualty so that new clients quickly view our agency as part of their team and look to us for all their risk transfer needs," Winn goes on to say. "One of our successes was our ability to work with Blue Cross to bring our clients a better deal. And that was a real coup since Blue Cross controls about 90% of the market in Alabama and writes nearly all its business on a direct basis."

Winn continues: "To further develop this area, we recently added an HR specialist who came to us from a 1,000-employee company. She writes a monthly HR newsletter that we send out to clients as well as consulting with clients that need HR backup. We also have added an RN who is helping us with wellness. The first three calls we made after she joined us resulted in the clients signing up with her to develop a wellness program. It's really helping us get a foot in the door and then it's only a matter of time before we're writing the entire account."

Today, the agency has reached $10 million in revenue, with 61 employees. More than half of the growth was organic, while the balance was the result of acquisitions of three agencies in 2006, 2007 and 2008. The 2007 acquisition also resulted in branches in Georgia and Florida. Steve proudly notes that the agency "enjoyed 9% organic growth last year—a year that was very tough for many in the insurance business."

A good corporate citizen

The agency supports a number of local charities through participation in a big walk to raise money to fight juvenile diabetes, fund-raising for Restoration Academy, and working at the Pig Iron BBQ Challenge, which is a huge fundraiser for the Children's Harbor. Last year, the agency hired a professional BBQer, and employees dressed up as Disney characters to entertain the children at the BBQ. Children's Harbor supports a campground on Lake Martin in Alabama for terminally ill children and also supports the Family Resource Center, which is adjacent to the Children's Hospital in Birmingham. The Resource Center provides all types of services to families who are basically living at the hospital while their children are being treated.

While the agency operates as an independent agency in its dealings with clients and insurers, it is owned by EBSCO Industries, a family-owned private company that has 43 different industries within its group.

Rough Notes is proud to recognize S.S. Nesbitt & Company as its Marketing Agency of the Month. It has shown itself to be a true partner to its clients, its companies and its community.