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Building a brand

Norman-Spencer communicates a new identity for its diverse operating units

By Elisabeth Boone, CPCU

These days, creating a corporate brand is all the rage. Self-styled branding specialists claim they can build a positive, powerful brand for just about any business—and some of them charge big bucks to do so.

For the do-it-yourself business owner, bookstores and the Internet are crammed with titles about branding that range in quality from practical and effective to "who wrote this junk?"

A successful brand is one that communicates the clear, powerful thoughts you want people to have about your business.

That was the goal of the principals of Norman-Spencer Agency, Inc., a program administrator and wholesaler based in Dayton, Ohio. Of the agency's total property/casualty premium volume of $200 million, programs make up about 65%, with wholesale business representing 35%. Norman-Spencer works with some 2,000 retail agents around the country and represents more than 50 insurers rated "Excellent" by Best's.

Norman-Spencer has six affiliate companies plus two sister companies, and the customers of one unit usually had no idea that Norman-Spencer had a network of affiliates that could meet a given customer's needs for many additional products, says Heidi Wolf, the agency's business development manager.

"Over the years we have grown through acquisitions, and until recently we maintained the identity of each company we acquired," explains Brian Norman, agency president. "This practice created confusion in the marketplace, and it was preventing us from achieving the strong growth that firms enjoy when they bring their disparate units under a single brand. Each unit was trying to establish itself individually within an agency, with separate contracts and different Web sites."

To bring order out of confusion, Norman-Spencer launched an initiative to create a clear and unified identity for itself and its affiliates. "We are working very hard to bring everyone under the Norman-Spencer umbrella so we can present one name and one face to the independent agent community," Norman asserts.

Growing and changing

"Over the last five years, Norman-Spencer has grown both organically and through acquisitions," says Pat Malone, chief financial officer. "We've completed between eight and 10 acquisitions, predominantly in the marine, construction, professional liability, and specialty areas. We've purchased assets and books of business, and we've purchased entire entities where that was appropriate. Many of the acquisitions we've made came to us with their own strong brand equity. They were known players in their niche markets with familiar names and established relationships with agents.

"These are all valuable attributes, and we didn't want to just flip a switch and change names and market these brands in a completely different way, for fear of losing a lot of the value that we purchased in the acquisition," Malone says.

"Over time, however, we realized that the cost of continuing to market and maintain a large number of different brand identities was becoming significant. It was becoming difficult to achieve economies of scale, and to explain to an agent: 'Yes, you've always known us as the XYZ Agency that only wrote cranes. But we're Norman-Spencer, and it's not just crane risks we can help you with; we have markets for everything related to construction,'" Malone explains. "Beyond that, we can handle your professional liability exposures, your marine risks, and much more."

Adds Wolf, "The current focus of our branding effort is to talk with our agents about everything we do and show them the many opportunities we have to work together. Throughout 2012, we will be communicating with all of our agents, telling them about all of our programs and how we can help them write more business."

Gaining an edge

Given the depth and breadth of expertise represented by the numerous affiliates of Norman-Spencer, and the drive to create a unified brand for these entities, the agency strives to position itself as a standout from competitors.

"We believe that what differentiates Norman-Spencer is our breadth of product," says Paul Norman. "We bring so many proprietary programs through the independent agency channel, and then we're able to round that out with our wholesale capability. That's what sets us apart from the average program administrator or wholesaler.

"One of the reasons we're placing so much emphasis in 2012 on communicating the Norman-Spencer brand is the large number of products we are either introducing or expanding in the first quarter of 2012," Brian explains.

The boat/yacht program is expanding from 12 to 50 states, and the real estate E&O program is expanding from three to more than 30 states. Norman-Spencer introduced three new national admitted products: one for boat dealers and marinas, another for crane operators and crane rental operations, and a third that is a monoline contractors' equipment program for small artisans with a minimum premium as low as $500. The agency also announced an improved national admitted product for Ready Mix concrete contractors.

Construction takes a hit

When the housing bubble burst in 2006, followed by the financial meltdown in 2008, one of the hardest hit industries was construction. Financing dried up, and projects on the drawing board were scrapped for lack of funding. Housing starts ground to a halt, and commercial construction likewise collapsed. Many costly projects were abandoned in mid-construction when financing dried up.

Many of Norman-Spencer's products and programs are designed for the construction industry. With a long soft market and sluggish economy keeping rates low, how can agencies like Norman-Spencer weather this "perfect storm"?

"As you can imagine, the poor economy and the harsh impact on the construction and manufacturing industries took a big toll on our insureds and us," says Chris George, program director. "We saw a lot of our clients go out of business that hadn't planned prudently and got very aggressive when things were going well. The ones that tried to hang on had to fight their way through it. We saw decreases in revenue, payrolls, and assets. Some commercial construction firms turned to the residential market, but that had collapsed, so both residential and commercial contractors were competing for what little business there was," George explains.

"We naturally saw some decrease in our writings, simply as a result of retaining accounts and seeing premium levels go down," George remarks. "We also were having to adjust our offerings to accommodate what the contractors were going through to keep themselves afloat."

Adds George: "As our clients and prospects made adjustments in their operations, like residential builders moving to commercial construction, we made adjustments in our programs. For instance, if a particular concrete contractor needed to make adjustments in its operations, we would change our underwriting guidelines and eligibility requirements accordingly."

"In helping our clients weather the recession," Brian Norman says, "we pride ourselves on our flexibility and on our ability to pivot as conditions change."

Sounding an optimistic note, Megan Rose, program director, says "We are starting to see some stabilization in the construction market; this is significant, because we saw nothing like this in recent years."

Like the construction industry, marine risks have taken a big hit during the recession, says R.J. Lorenzi, board member and recreational marine leader. "Right now we're seeing some stabilizing and are actually experiencing growth in some areas, and we expect to see revenues increase over the next couple of years."

Working with retailers

As noted earlier, Norman-Spencer works with some 2,000 retail agents and brokers around the country. What qualities does the agency seek in a retailer?

"We look for people who want to partner with us," says Heather Frain, program director. "We want to build stable, lasting relationships with our agents. Over the past 15 years, I've dealt with a lot of the same agents. That kind of longevity is very important to us, because this is a relationship business. In working with generalists, we take the time to explain our programs to them and help them understand the coverages their clients need in order to be successful," Frain says.

The same holds true in Norman-Spencer's marine division, where a team of seasoned professionals stands ready to work with both specialists and generalists to produce profitable business. "We welcome generalists who may have only one marine account so we can explain the exposures and coverages their clients will need," says Stephanie Solano, wholesale operations manager for the marine division.

A look ahead

Even as the property/casualty market shows some signs of firming and the economy begins a slow recovery, many challenges remain for the property/casualty business: insurers, intermediaries, retail agents, and clients. At Norman-Spencer, these challenges represent opportunities for growth, says Wolf.

"Our producers talk with their retail agents and train them on any risk they present," Wolf says. "For example, a retailer may want coverage for a crane risk, and he also may need coverage for a boat. That gives us the opportunity to explain that we have a strong marine division and can arrange coverage for the boat as well as the crane."

Adds Rose: "Norman-Spencer's acquisitions have allowed it to build a powerhouse of specialty programs for select industries. "When Heather (who is Rose's sister) and I came on board in 2010 after Norman-Spencer acquired our firm, we were pleased to have access to new programs and products that we can offer our agents."

Asserts Pat Malone: "We need to get deeper into our relationships with the agents we do business with so we can explain to them that we sell more than one product. Through the acquisitions we've made over the years, we've brought in a large number of highly talented young people and have placed them in key positions while at the same time we've added markets and volume."

Bright people, top products, and flexibility are proving to be winning ingredients in Norman-Spencer's "recipe" for building the perfect brand.

For more information:

Norman-Spencer Agency, Inc.

Web site:


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