READ THE POLICY
Coverage knowledge helps this Michigan agency achieve a high retention rate
In 1916, the first Nash motor car was produced and Les Whims opened a Nash dealership in downtown Rochester, Michigan. His friend, Vern Moulton, suggested that he might want to sell auto insurance, as well. Vern had just founded Auto-Owners Insurance Company. Les, who was an entrepreneur with a number of different business interests in his future, thought the idea was a good one; offering another income stream that, if pictures of the uncluttered roadways of 1916 are any indication, could help supplement the income from sales of an untested automobile. Thus it was that Whims Insurance was born and became the third agency to have a contract with Auto-Owners. Interestingly, the agency remains the third-oldest Auto-Owners agency in the country, since the other two are also still in existence.
In addition to auto and insurance sales, “Grandpa Whims had many other businesses, as well,” Tom Klix notes. “He farmed, leased buildings, and built the town’s first bowling alley, which he dug out with a team of horses. His brother was a bowler and he wanted to provide it for him and his friends.” Before joining the agency, one of Tom’s first jobs was as a pinsetter.
For 60 years, the agency remained a personal lines agency, providing needed coverage to the citizens of Rochester and the surrounding area, initially using the Rough Notes 1-2-3-4 System to manage client accounts. In the ’50s, Les was joined by his son-in-law, Herman Klix, who had been a MONY field underwriter. And then in 1976, Herman’s son and the current president, Tom Klix, joined the agency, intending it to be his career. Realizing very quickly that he could not survive writing just personal lines, he started building a commercial lines business.
Of course, Tom also realized that he needed to provide something unique in order to compete with agencies that also were writing commercial lines. And, although my conversation with Tom evinced no indications that he had a masochistic streak, it is clear that he must have, since he decided that his entrée into the commercial lines arena would be from developing a complete understanding of the coverages he would be offering. And that would come from reading the insurance policies.
Tom was very serious about the need to explain the policy to every client. His sister, Connie Klix Mercer, joined the agency three years after Tom and remembers what happened early in her career when she asked Tom a question. “He asked me if I had read the policy.”
The devil is in the details
“I found out very quickly that you can learn a lot from reading the policy,” Connie, who is the sales vice president, continues. “And we’ve instilled that in every one of the 19 people who work here.”
Agent Eric Putman, the agency’s youngest producer, can attest to that and to the fact that it gives him a leg up when meeting with clients. “Our knowledge of the coverages allows us to do two things that really make us unique,” he says.
“The first is that we start fresh. When a new prospect inevitably pushes their current policies at us, we tell them to hold on to them. We’ll go over them later but, we tell them, we don’t want to simply replicate the past. We carefully go over their insurance needs and then are able to tell them which policies provide the best coverages for them.” And there is no sugar-coating. The conversation discusses both what is covered and those pesky little exclusions and conditions that exist in every policy.
Connie adds that equally important is that part of the underwriting process that includes physically looking at the risk. “We gather first-hand information so we can not only provide the coverage they believe they need, but recommend coverages that might have been overlooked, based on the risk profile we developed from the physical review.”
“The second thing we do,” Eric continues, “is the annual review, and every word in the review means something. That review generates a document that is our promise to them, and it also is put into our agency management system (yes, they are no longer relying on the paper system, although it was effective for nearly 75 years) so that whenever we review that client’s file we see what we promised them and what they are covered for.”
Finding the right people
“Eric is a perfect example of the kind of people we look to employ,” Tom says. “He came to us from another agency where they weren’t providing the knowledge base he was looking for. And, although he did have insurance experience, that is not our principal criterion when we look for people. We want intelligent people who want to learn. One of the questions that we always ask is about their hobbies. We want to know if they spend their free time staring at the television or if they read or are active in sports. Not surprisingly, we have a lot of readers on our staff.”
Tom continues: “One of our greatest strengths as an independent agency is that we represent a number of insurance companies and can provide a variety of insurance solutions to our clients. But that works at complete efficiency only if we know what each company’s policies cover and what their marketing appetites entail. And that would be very difficult for one individual to accomplish.
“So we established a liaison program where every producer is responsible for learning everything about certain companies and meeting with the reps. That individual needs to read and understand the policies of that company and share that information. In most cases, one producer can provide the information that a prospect needs to obtain the right coverage at a fair price. But we do run into situations where greater knowledge is needed, and that’s when we bring a team together to share that knowledge for the betterment of the potential client and the agency.”
Eric picks up the conversation by pointing out that “everyone here is humble and willing to help if you don’t know what’s needed. Most of us know two or three insurance companies really well. For example, I know Cincinnati and EMC intimately. I know what they offer and what they want.”
Keeps people sharp
Accounting manager Stacey Fox says with pride that she has been challenged with “task after task after task. You get to use your brain, and that keeps you interested. I’ve learned a tremendous amount about the industry and feel like, in the three years I’ve been here, I’m using my brain more than I ever have. And that’s really great.”
Commercial lines department member Amanda Galat takes great pride in the fact that the people at the agency “aren’t just making a sale. They want insureds to know what they are getting and want them to be properly covered. We’re held to a higher standard, and I think that’s terrific.”
Stacey continues: “Every customer’s account is reevaluated each year. And we monitor the account throughout the year and know if a serious rate hike is coming, so we can alert clients and make appropriate recommendations. I know everyone says it, but I truly believe that our goal is to make certain that all our clients get the best coverage at the best price.”
Tom says, “I know what I’m most proud of and that’s our people, but I don’t know what about them makes me the proudest. They are the most erudite staff in the region, and I’m willing to bet that’s true for the nation. They really know their stuff, and they take great pride in learning it and sharing it.
“One of my greatest joys is watching the younger people ‘get it.’ And they are rewarded. All our business comes from referrals. We’re all involved in the community and, at every event we sponsor, support or attend, we see people we know and who know us. And they are happy to recommend us. A lot of our customers have adopted the same attention to detail that we offer, and we love that.
“Over and over again, I have seen agencies that are afraid of knowledgeable clients, because they might become E&O risks. We’ve seen hundreds of annual reviews provided by other agencies, and they are rarely completely transparent about what is covered and what is not covered. I get the sense that they think if they don’t talk about it, then it’s not there. We are transparent. We want our clients to know everything. And that turns out to be the best E&O protection imaginable.
“This is a great and important business that allows all other businesses to operate and succeed. And that’s one of the reasons that we have training sessions every day. They don’t include everyone, and they may just involve a discussion of a few minutes. But we want everyone at the agency to know what is happening in the industry and what changes have occurred. This is a constantly shifting environment and we see our job as staying on top of it and then sending that message to our clients.”
Tom concludes, “The family history is so important. We would never take a shortcut that would cause our ancestors to frown. Every day, when I walk up the driveway to the office, my shadow is walking across my grandfather’s land. It is not just my promise to our clients, but his and my father’s. We could never betray that.”
Rough Notes is extremely proud to recognize Whims Insurance Agency as our Agency of the Month for its commitment to the best ideals of the independent agency system.
By Dennis H. Pillsbury