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Promoting independence

The Peter M. Bakker Agency, Inc., brings direct writing agents into the fold

By Dennis H. Pillsbury

Larger than life, Raymond Burr stands in the courtroom. He is holding handcuffs. When he lifts them toward the audience and pulls them taut, he points out that independent agents aren't "locked into one company." Unfortunately, as dramatic as that more-than-two-decades-old ad was, most people still don't understand the difference between direct writing agents and independent agents and how that difference ultimately can impact their insurance coverage over the long term. But there certainly is one group that knows the difference quite well—direct writing agents. And that's especially true when the company they represent reacts to bottom-line exigencies and curtails or eliminates some coverages in their marketing territory. Those "good hands" open up and let a few of their policyholders and agents scramble to find coverage elsewhere.

That's certainly not to say that our companies don't react to the vicissitudes of market changes. They do. But when they do, independent agents have an answer because they represent a number of companies so their policyholders won't be left high and dry when one company decides to stop writing a particular line of business.

While many of us may admit to feeling a "guilty pleasure" when a direct writing competitor suddenly has no market, we also feel sorry for both the policyholders and the agent. This is particularly true if that agent was one of the many direct writing agents who are strong producers who entered the insurance business to help protect the people in the community in which they lived and made an unfortunate decision as to which company to represent.

Peter Bakker established the Peter M. Bakker Agency, Inc., Avon, Connecticut, in 1974 as a one-man shop that would serve the individuals and businesses in central Connecticut and faced competition from those aforementioned agents regularly.

He quickly gained a reputation as "an insurance agent's insurance agent, who placed policyholders first," notes agency Chief Operating Officer Peter Frascarelli, CPIA, who joined Bakker 13 years ago from Travelers Insurance. "He is well known and respected in the community, and through his highly ethical demeanor and way of doing business truly shows agents the best way to conduct business."

An accidental conglomerateur

So it should not have been a surprise when one of his direct writing competitors who suddenly found himself without a home came to Peter Bakker and asked for help. Talk about friendly competition! And, also not a surprise, Peter found a way to help him.

That was at the turn of this century, when Peter had grown his agency to reach a property/casualty premium volume of around $14 million. His solution was simple and elegant. He brought the agent on as an affiliate of the Peter M. Bakker Agency, Inc., and went to his company partners to ask them to recognize the affiliate as a subcontractor of the agency. When three other "homeless" agents heard about the arrangement, they came to Peter to pursue the same opportunity and were taken on as affiliates. Today, the agency and its 15 affiliates have property/casualty premium volume of $45 million.

"We never solicited any of these agents," says Peter Bakker, president of the agency. "Word got around and they came to us. When we find an agent who shares our values of placing customers first and our work ethic, then we are happy to welcome them on board. Philosophically, I believe in small agents who serve the communities where they live and work and want them to survive. This is my way of helping to make certain that that happens. We have become an accidental conglomerateur, bringing new blood into the independent agency system."

Peter goes on to point out that his companies "like our model. These affiliates come on board with nothing except the ability to produce. Their former companies own the business and have non-compete agreements that force them to approach new markets. And our companies really love the fact that we are providing them with new organic production."

Of course, this doesn't happen over night. "We provide constant training, including seminars and Webinars to get our affiliates used to the independent agency system," Peter says. "Over time, we have developed a comprehensive training manual and Cathy Burnett, our vice president of affiliate relations, has incorporated it into an intranet which is shared by the agency and the affiliates."

Technology makes it sing

"Our intranet is soup to nuts," Cathy, who joined the agency from The Hartford, says proudly. "It includes the training manual online (there is also a paper version), as well as procedures for communicating with our insurance company partners, links to insurance resources, matrices of underwriting guidelines for our companies and for the agency, how to use the Applied Systems management system, how to take a proposal and turn it into a quote, and so on. It actually takes a good six months for a new affiliate to learn all that's involved in marketing business to multiple companies."

To make certain that everything runs smoothly, Cathy has the ability to shadow the computers of each affiliate to see that they are using the system correctly. "I also use Skype, GoToMeeting, Webinars and other technologies to keep in constant touch with affiliates, both to make certain that they are supporting our goals, but also to provide continual training about opportunities they may have overlooked. I look at each affiliate's downloads every morning to see if they are submitting business to the right company. Oftentimes, they don't understand that one company may have an appetite for a particular type of client, or they may be leaving out information that would prevent a quick acceptance of the application. Basically, I serve as a reminder that the information they need is available in the intranet. We have and constantly update company appetite information."

From personal to commercial

"Most of the affiliates who come to us were solely involved in the personal lines market," Peter Bakker points out. That accounts for the fact that the agency's property/casualty premium volume is about 65% personal lines. "But we are working to change that. Alan Burstein, who joined us from another agency, serves as a vice president of commercial lines. He coaches them on marketing to business owners and using the information in the intranet to determine what coverages a particular business might need."

"One of Peter's mantras is 'knowledge is power,'" Alan notes. "So we work every day to impart knowledge about commercial lines business to our affiliates. We have educational programs every two weeks, sometimes in person and other times via online meetings. For example, we recently had bond people from The Hartford come in and provide a seminar on the intricacies of bonding.

"Commercial lines is a whole new world for most of our affiliates," Alan continues. "But they very quickly realize the tremendous potential. And we're there for them if they need our help. We talk to them daily about where to place commercial business, how to approach an account, and will even go with them to a potential account if they ask for that kind of help. They understand that we are looking over their shoulder, but not in an intrusive way. We're ready to step in if they need help, but prefer to stay in the background and enjoy their success."

Contagious enthusiasm

"Most of the agents who have joined us as affiliates had been beaten down by their previous relationships," Peter Bakker says. "But what is really gratifying is the way they are re-energized and eager to start producing once they come on board with us. They quickly revert to their natural enthusiasm. After all, these were born sales people who were suppressed by circumstances. It's wonderful to see what happens when they are allowed and encouraged to perform again."

Peter Frascarelli comments: "Perhaps the most important thing that we allow our affiliates to do is to focus on the customer. That's why they got into this business in the first place, but over time, they were forced to focus on what the company demanded, rather than what the customer needed. When I joined this agency, the first thing I heard was, 'It's all about the customers; try to be as proactive as possible.' Since then, everything we have done has been so that we can get to the customer more frequently. And that really resonates with the new affiliates."

Peter Bakker adds: "It doesn't take very long for them to realize that this is a whole new ball game and they're happy to be playing. And their enthusiasm has energized us. It's contagious. And it's renewed regularly as we bring in new blood fairly regularly. We anticipate two new affiliates will be joining us this year."

He goes on to note that "we are not careless. We believe in discipline and are very careful about who we bring on board. We strive to make sure there is a fit and, going forward, there is consistency. We also are careful risk managers for ourselves. All of our affiliates use the same E&O carrier and we have a group cyber liability policy. We're big believers in technology, but also in providing protection for what can go wrong."

Diversity happens

Enthusiasm and fun are the watchwords for the agency and they are always looking for people who want to be part of an environment where hard work leads to success that leads to fun. In the process, they have become an extremely diverse group, able to market to ethnicities throughout central Connecticut and beyond.

Languages that are represented include Korean, Chinese, Russian, and Greek in the home office. In addition, affiliates offer Polish and Spanish.

"This has really helped us reach out to diverse communities in our marketing territory," Peter Bakker says. "We also supplement this outreach by regular engagement in the community supporting nonprofits throughout the area. Most notable is the golf tournament we have sponsored for the past 25 years." The tournament benefits the Connecticut Children's Medical Center. The tournament has raised more than $135,000 for the center.

Rough Notes is pleased to recognize the Peter M. Bakker Agency, Inc., as our Marketing Agency of the Month. Not only does the agency exemplify what is best about the independent agency system, but we also really love the fact that it is regularly adding new blood to the system.


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