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Marketing Agency of the Month Making money by saying "no" California agency turns down prospects who just want a quote
By Dennis H. Pillsbury When Ralph Beers established R. T. Beers & Company Insurance Services, Inc., Long Beach, California, in July 1997, he had a vision to help business owners rise above risk. And that became the tagline for the agency as it focused strictly on commercial property/casualty risks.
"We wanted to create an environment for those clients that wanted to rise above risk where we could help them enhance their company's value, protect its assets, protect the health and safety of employees, help them be good corporate citizens, and help them transfer risk," Ralph says. To accomplish that, Ralph realized that "we needed to be very selective about whom we did business with. We looked for those business owners with whom we could have a conversation about risk mitigation. And to do that, we had to be willing to say 'no' to those prospects who were just looking for a quote. We had to be disciplined. Our goal was to become a partner with each one of our clients, and you can't be a trusted partner with someone who is shopping around for the best price. "By saying 'no' to those clients with whom we cannot have the right kind of relationship, we are able to dedicate resources to those clients who want to work with us to develop effective safety and risk mitigation programs," Ralph points out. Learn, learn…and then…learn In order to truly be able to successfully mitigate or eliminate the risk facing a business, you have to have a deep understanding of that business. "We've developed an expertise in a number of niche areas that fit with our general appetite," Ralph points out. "The business we look for involves those companies that operate within four walls and employ people who are making things, distributing things or helping people in a health care environment. For example, I have developed an expertise in the metals industry that allows me to help businesses in that field," Ralph notes. Of course, "once we develop an expertise within a certain industry, we then have to sit down with a client and find out what unique risks they face," he continues. "That's really the only way to put together a program that will make that business safer and more profitable." One example of how successful this approach can be is the program that R. T. Beers put together for Industrial Metal Supply Co. (IMS), a full-line metal distributor serving metal users in southern California and Arizona. The company has four facilities in southern California and two in Arizona comprising a total of more than 400,000 square feet of warehouse space. In order to meet the growing demand for metals in various alloys, shapes, and sizes, as well as specialty and decorative metals, the company employs 350 people and has three shifts in all six locations, including Saturdays. "We thought we had a great safety program in place," IMS President Eric Steinhauer comments. "We had regular safety meetings with employees, where safety experts would train employees to use the best techniques for reducing accidents. That was in 2003, when Ralph came in and looked at what we were doing and told us our approach was all wrong."
Getting the right people in charge "He explained that what we needed to do was train the shift supervisors in safety and get them to own the safety program," Eric continues. "Ralph pointed out that for those employees working second and third shift, those shift supervisors were the only management people that they knew. So the impetus to operate in a safe manner had to come from those people. "He also put into place a procedure where production would stop immediately when a near miss or even an accident occurred so that we could identify what had gone wrong while it was still fresh in our minds. Of course, we also made certain that if an employee was injured, we contacted the appropriate medical people and Ralph, and started treatment as quickly as possible. It only took a brief time to review the accident details and then resume production with appropriate changes if necessary, but these new procedures have had a tremendous impact on our results," Eric reports proudly. "Our workers comp mod dropped from 1.62 to 0.62 in four years." R. T. Beers also provided courses on defensive driving in order to reduce or eliminate claims in the commercial auto line. "We have 40 to 45 trucks on the road every day, carrying heavy loads of metal. This program has been very important to us in helping to reduce losses and create drivers who are safety conscious. "Equally important is follow-up," Eric continues. "Ralph conducts surprise inspections of all our facilities and then comes back with a report that ranges from 'here's where you need to pay more attention' to 'they're really doing a great job at this location.'"
Focusing on the pain "For most of the business we represent, the majority of premium cost is tied up in workers compensation and commercial auto," Ralph says. "So those two lines provide us the greatest opportunity to create value. Claim activity and cost are tied together so clients can better appreciate the correlation between claims and premium cost. They are quite different from property lines, where many clients will never have a claim. "So naturally, we see those two lines as areas where we can really differentiate ourselves. We take a deep dive into the client's business to find ways to help them alleviate those areas that are causing the most pain. "We have a mentoring program designed to bring behavior-based management to our clients, with leadership tools that help them create a proactive risk management program." The agency also has a full-time workers comp claims advocate who makes certain the R. T. Beers clients' claims move forward in a timely manner. "We also have a variety of programs to help manage the risk in other lines," Ralph continues. For example, "we have a product to help with the transfer of liability to the appropriate party. We hired an attorney to develop sample contracts to accomplish that. We have five sample contracts on our risk management Web site. "In the property area, our main concern is protection of our clients' assets. We regularly review their coverages to make certain that their property is insured to value and that their business interruption properly matches with their flow of inventory needs. "This all fits in perfectly with our goal of reducing the risks faced by our clients. Once we have achieved that goal, it is only then that we start to talk about transferring some of that risk to insurance or alternative risk transfer mechanisms."
Working with the companies Ralph, who spent 13 years with Chubb Insurance in various capacities, brings this experience to play when approaching insurance company underwriters. "Our goal," he says, "is to get the underwriters to understand what we are doing to make our clients better risks. To do that, we really have had to change the normal paradigm of underwriting where the underwriters look at past performance to determine what future costs and future performance will be. Instead, we ask them to consider the changes that our risk mitigation efforts have produced and look forward to the better performance that will produce. "They understand that the processes we put in place for our clients actually do make the risk look different, and they have been reflecting that in the underwriting decisions." R. T. Beers employs 14 people, 5 of whom are producers. It has 250 commercial clients that are placed in traditional markets but also has a number of clients utilizing captives and high deductible plans, which involve fee income. "Our approach works," Ralph concludes. "We have long-term relationships with our clients that result in a retention rate that is better than 98%. Basically, the only time we lose a client is when an acquisition or merger occurs." The future Ralph is convinced that the agency's unique approach will survive only if it remains independent. "We're looking for talented young people who want to become owners in our organization. We want to mentor the next generation of owners about ways they can build wealth through meaningful relationships with clients. What could be better? Here is an opportunity to help people succeed and prosper and make an excellent living in the process. "We have unbelievable clients all across the country. These people are our friends, and we are always ready to fly wherever they are to assist them with a risk management problem or to meet with those potential clients they regularly refer our way." Rough Notes is proud to recognize R. T. Beers & Company Insurance Services as our Marketing Agency of the Month. The focus on reducing risk for all of its clients has raised the agency's profile from being a purveyor of insurance to being a risk management partner with all of its clients. It certainly shows us one way to achieve the goal that agents across the country strive to achieve—to be recognized as trusted advisors who have a professional relationship with clients rather than a sales relationship |
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