23rd annual Rough Notes
Marketing Agency of the Year candidates
One of the agencies featured in a Rough Notes cover story during 2011 will be chosen Marketing Agency of the Year. The agency principals of the winning firm will be presented with the award at a dinner held in their honor this spring.
The winner will be selected by votes of the previous 22 years' Rough Notes cover agents (from the years 1989-2010).
The nominees for this year's award are described on the following pages. The winning agency will be announced in the February issue of Rough Notes, and a full story on the winner will appear in a future issue.
The Seltzer Group
Agency President Robert W. Seltzer, CIC, CWCA, CWCP, PWCA, leveraged the power of marketing to overcome the limitations of being located in a small town in a sparsely populated area of eastern Pennsylvania. With only 150,000 people in the county, Bob knew he needed to expand the agency's mix of business—taking it from mostly personal lines to a more balanced distribution of accounts.
In 1998, the agency joined Keystone Insurers Group, which, among other things, gives its member agencies access to initiatives that increase their value.
Getting involved with program business boosted commercial lines production and led to The Seltzer Group being endorsed by the Pennsylvania Malt Beverage Association. But it was the agency's involvement with the WorkComp Advisory Group and the Institute of WorkComp Advisors that started a fundamental shift in the way the agency did business. The agency now focuses on solving problems, not strictly on selling insurance.
As problem solvers, the agency develops individual programs for clients to help them improve their workers compensation experience. Additionally, The Seltzer Group formed a safety company, which includes human resources consulting, in conjunction with one of the Keystone partners.
With the buzz around digital marketing, the agency recently signed on with Astonish Results to help them put together marketing campaigns and track results. Embracing these varied solutions has brought The Seltzer Group to a more balanced distribution of accounts. "We're quite proud that we produce annual premium of $12 million in personal lines, $20 million in commercial, $5 million in benefits, and $5 million in alternative risk," Bob says.
J.S. Ward & Son, Inc.
Artesia, New Mexico
Since its founding in 1925, this family-owned firm has built its reputation serving the primary industry in its operating territory—oil and gas. Demographics would seem to be working against the agency, as there are only approximately 15,000 people in its local operating territory. Anna Byers, the agency's fourth generation representative, has helped the firm to widen its horizons, as she was instrumental in the purchase of an agency in Carlsbad in 2010. Anna also has recognized the need for local diversification beyond the agency's oil and gas roots. "We don't have a huge retail sector in the area, and were already writing the lion's share of the Main Street businesses," she says. "We started a church risk management program with Guide One, and it's really taking off."
Adjusting to difficult conditions has been a hallmark of the J.S. Ward & Son. When the head of the agency—the founder's son—died suddenly in the mid-1970s, it forced a quick realignment of responsibilities; his widow, daughter and son-in-law came on board to run the agency. Because these second-generation family members were untrained in the business, they depended on the firm's original founder, who came out of retirement, to guide them. Today the agency has 11 people in Artesia and 4 in Carlsbad, and produces about $13 million in premium. A prime goal is to continue to diversify beyond the oil and gas business, and build on its strong reputation in the community.
Higginbotham & Associates
Fort Worth, Texas
"We" and "the clients wanted help with . . ." are the guiding words by which Higginbotham & Associates operates.
The "we" came into being when owner Bill Stroud decided to sell the agency he had purchased from his aunt, who was the wife of founder Paul Higginbotham. Rusty Reid, current president and CEO, remembers: "We wanted to establish a place where everyone was part of the team and benefited from the success of the agency." Thus was born an ESOP. "What better way to come up with a shared vision than to have an arrangement where that meant shared success?" he observes.
At the same time that the agency was setting up the ESOP, clients began to clamor for help with employee benefits. Thus, was born, too, the employee benefits department, which is one of the largest contributors to the agency's revenue stream. By the end of 2009, Higginbotham had become the 41st largest broker in the country, as ranked by Business Insurance, with revenue of nearly $55 million (58% coming from employee benefits.)
Striving to be a full-service provider to its clients as well as to achieve perpetuation, the agency seeks out and employs experts in the risk management field. In addition, recognizing the value of cross-selling, the company strives to maintain its retention rate of 90 or above. This is accomplished in part by keeping in touch with clients and consulting "a very large database that allows us to identify solutions when clients experience 'pain' similar to that experienced by other clients," says Rusty.
Costello & Sons Insurance
San Rafael, California
When he joined his dad's agency 23 years ago, Bryan Costello came into a generalist firm that had been in business since 1939. It grew and "we did fine, but we never hit it out of the park," Bryan comments. "We would reach a certain level and then turnover would happen."
Bryan decided that he wanted to develop a more focused approach rather than remaining a generalist. That new approach started about six years ago in the middle of a soft market. In addition to concentrating on certain niche markets, "we also concentrated on people and culture," Bryan says, noting that the idea was to build a team of experts who felt valued. And it worked. Despite suffering through the soft market, the agency more than doubled revenues in the six-year period to $6 million from $2.5 million.
"Specialization makes us more efficient in the way that we process business," Bryan points out. "It's a lot easier when the accounts look similar. The underwriters are the same and we can really shine when there is a claim because we know the contracts inside and out. We can offer 'best of breed' solutions and products."
The agency offers risk management programs targeted to the three areas in which it specializes: realtors, innovation (technology and venture capital/private equity firms), and high-value personal lines (accounts that provide premiums of $8,000 to $10,000 and up.)
Bryan sums up: "Our people are having a great time because they are actually helping clients be more successful. It has created an environment where every one of our 31 people is having fun and we have had almost no turnover."
"Missing the boat" was not a tragedy for the Gowrie Group; rather, it proved to be an opportunity for sailing into a new territory. A boating enthusiast and son of an insurance agent, Carter Gowrie parlayed his avocation into a successful career. Providing marine insurance through his boutique agency, he first offered boat and yacht coverages, then marinas and boat dealers and finally—following a merger—commercial lines.
Missing was personal lines, a lucrative area considering that boat and yacht owners are an affluent crew and that they often seek coverages for other hobbies. Another merger closed that gap. The balance is now 45% personal lines and 55% commercial.
Gowrie employs 55 people in various offices and garners about $10 million in revenue, with benefits accounting for $1.3 million.
In the benefits area, the Gowrie Group has devised a creative plan that combines HSAs with a true consumer-driven health plan. Using co-insurance, rather than a high deductible to control costs, keeps "employee skin in the game as a paying consumer of health services," says agency Principal Skip Young. Gowrie was the first one to create this design and, as a matter of fact, major health insurance companies are investigating taking the same path.
So valued is the advice of Gowrie experts/advisors on adjunct coverages, that they have clients in all 50 states, and many clients who move away stick with the firm. No wonder that the Gowrie Group is the largest marine insurance group in the United States.
The Insurance Exchange, Ltd.
Oak Forest, Illinois
When kids talk about what they want to be when they grow up, almost no one says: "an independent agency owner." Thomas E. Crosby Sr., was no exception; he planned a career as either a teacher or a radio disc jockey. A chance encounter with a Prudential employee changed Crosby's trajectory—and his life. He soon became one of the insurer's top-selling African-American agents and several years later joined Country Companies.
Although he enjoyed the fruits of his success as a company producer, Crosby was eager to take on a new challenge: to establish his own agency where he could encourage minorities to become producers and create a meaningful career path for them. In 1986, Crosby formed The Insurance Exchange, Ltd. in the Chicago suburb of Oak Forest, Illinois, which writes all lines of insurance through producers who work as independent contractors.
Crosby uses the skills he learned as a sales manager to recruit and train new producers. Producers represent a variety of ethnic backgrounds, and many speak several different languages. As a result, they are able to connect with members of communities that have been underserved by the insurance industry because of language barriers.
In recent years, The Insurance Exchange has become a family affair as several of Crosby's children have joined the agency. His son, Thomas E. Crosby Jr., is vice president of commercial lines; daughter Neidra Echols is vice president of personal lines, and daughter Kelly Crosby serves as agency manager.
Not surprisingly, The Insurance Exchange enjoys profitable growth each year as it continues reaching out to people of diverse ethnic and cultural backgrounds.
College Student Insurance Service (CSIS)
Garden Grove, California
"California Dreamin'" is a popular pastime for those of us who live in harsh winter climates and long for sunshine and ocean breezes. For Californians, the weather is just one of many delights of living in the Golden State. Those in the insurance business, however, know that political turmoil can trigger lightning changes in the state's legislative and regulatory climate that affect agents, insurers, and consumers.
Joe and Sandi Jimenez, who own College Student Insurance Service (CSIS), an independent agency based in Garden Grove with six branch offices, are seasoned veterans of this turbulence and excel at finding ways to profit from it. With just 22 employees at its seven locations, CSIS runs lean while maintaining its personal touch with clients and has the flexibility to respond to the sometimes drastic changes in state laws that are a hallmark of the California insurance scene.
For example, CSIS was fully prepared to deal with the huge inflow of new auto business created by enactment of the state's mandatory coverage law in 1996. To take advantage of the law, CSIS opened new offices and acquired other agencies or their books of business.
Long active in organizations that deal with the state government and insurance department, Joe Jimenez is a founding member of the Insurance Agents and Brokers Association of California, known as Cal Agents, and served as its president in 2010.
Many employees of CSIS are family members, and they all share the agency's commitment to provide affordable coverage to clients, many of whom are second- or third-generation customers.
Seely & Durland, Inc.
Warwick, New York
This nine-person agency, under the direction of its third generation of family ownership, produces about $1.5 million in revenues from a diverse book of business—53% commercial, 43% personal and 4% life and health. It has a retention rate of 92%, and is constantly exploring new ways to respond to dynamic market conditions and adapt to technological innovations. It handles policy inquiries in real time, uses imaging extensively and e-signatures wherever possible. The owners were determined to capitalize on these improvements in workflow by creating an environment where sales are paramount.
They spent six months developing a new compensation plan that would reward non-producers for cross-selling and developing new accounts. In implementing the plan, the agency reduced salaries—easing into it by guaranteeing their former income for the first year. They knew the plan was a success when no one needed to have the additional guarantee in order to exceed their previous earnings. To incentivize the claims manager, a compensation plan includes a bonus based on the results of a claims survey that agency claimants receive.
"We've had steady growth and have been very healthy profitability-wise," says Stuart Durland, vice president. "Our staff is lean and quick to accept change." Those changes have come not only from the new compensation structure, but also an extensive commitment to Web site marketing and social media, which Stu says is particularly important in competing with direct writers for Gen Y personal lines business.
Diversified Insurance Group
Salt Lake City, Utah
Can a little guy compete with the big guys and come out on top? You can if you live in Big Sky country where that sky is the limit and you focus on becoming the best professional service organization rather than the best agency.
Diversified Insurance Group combines the best of two worlds—the world of the small independent agent with its autonomy and close ties with customers, and the world of the large broker with its advantage of large resources. Competing with the big guys is just part of the firm's standard formula, and the proof of its success lies in the fact that, as it celebrates its 10th anniversary, it has grown its original $30 million in premium to more than $150 million and, even more important, it insured 16 of the last 18 IPO companies in Utah.
The firm's formula consists of an E3 approach toward its clients: education, entertainment and evangelizing. By organizing or sponsoring seminars, conferences and an entrepreneurial marketing course, Diversifed seeks to educate its clients. In addition, each year those clients receive a book of the year, which, it is hoped, will entertain them while guiding them to better business practices. And, finally, with most of its business coming from referrals and its retention rate at a high level, it is obvious that the agency invests—or evangelizes—in the success of its clients.
By innovating quickly and providing an attractive alternative to "the big guys," Diversified hopes to become the first choice of companies in the technology and life science fields.
Chalmers Insurance Group
When an agency has roots going back to 1857 and has been successful and growing, it must be doing something right. And that certainly describes the Chalmers Insurance Group of Bridgton, Maine. It has been doing things right for more than 150 years. In fact, the agency has been an innovator, continuously pushing the envelope.
In the early 1900s, it pioneered niche marketing by becoming a specialist in boys and girls camps, while continuing to serve the insurance needs of the people and businesses in the Bridgton area. Camp Wigwam in Waterford has been with the agency for more than a century. Talk about retention!
Early on, the agency also adopted new technologies to better serve its clients. It brought in a Remington typewriter in 1895 and later added electrotypes to reproduce frequently used forms. Today, the agency is fully automated allowing it to communicate seamlessly with clients and with each of its 112 employees in nine offices, including three in New Hampshire.
Other innovations include the development of an all-risk floater that covers camp equipment; the addition of real estate sales; the development of an accident and sickness program; and the expansion into ski areas.
Personal lines still accounts for nearly half of the agency's $9 million in revenue and much of this has come from group sales, "an area that Dottie Chalmers Cutter recognized as a tremendous opportunity," Bill Chalmers notes. Dottie points out that "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 the insurance companies love it because every insured has one positive underwriting criterion—he or she is employed."
Clark-Theders Insurance Agency
West Chester, Ohio
Exceeding customer expectations is what inspires the 20-person staff at Clark-Theders Insurance Agency, located in the Cincinnati suburb of West Chester, Ohio. The agency's commitment to doing this is demonstrated in part by the fact that the director of customer care is a part of the management team and 17 staff members are involved with making certain that the agency meets or exceeds its promises to customers, leaving only three sales people.
After adopting a Purple Cow philosophy a la Seth Godin and setting out to differentiate and distinguish itself, the agency fine-tuned its emphasis on risk management, recalls agency President Jonathan Theders, CRA, CPIA, CHSP. He says the agency provides free audits of prospects' current coverage. Jonathan says the approach changes the client's view of the agency "from a company that sells insurance to a trusted advisor that helps them be more successful."
The agency's claims management database evolved into RiskSOURCE™ which utilizes a number of techniques to identify, measure and reduce risk. Each decision about how to manage risk takes into consideration the client's bottom line. Jonathan says clients see reductions in premiums, while the agency enjoys retention levels in the upper 90s.
Each employee gets 30 paid hours a year to volunteer with a nonprofit organization of his or her choice. In 2010, Clark-Theders staff provided more than 900 hours of donated labor to charitable organizations. Additionally, the agency's CTIA Cares committee identifies a bimonthly service project in which every employee can get involved.