Cecil Y. Ray, Jr. (seated) is chairman of Rigg Group in Fort Worth, Texas. Charles Reynolds is executive vice president of Wm. Rigg Co.
Rigg Group, Fort Worth, Texas, traces its origins back to 1895 when Wm. Rigg Co. was formed as a property/casualty insurance agency. The agency grew and prospered to become one of the largest independent agencies in the state. Today, that agency is 100% owned by Rigg Group and has offices in Fort Worth, Dallas and Houston. Cecil Y. Ray, Jr., Rigg Group's chairman and chief executive officer, joined the firm in the late 1950s and soon began an extensive diversification program that centered on continuing to provide a wide variety of property/casualty services and expertise, but added related services. This included excess and surplus lines coverages provided by RISC, Inc., Dallas; employees benefits and life and health insurance which are provided by Rigg Life Agency, Inc., and insurance premium financing provided by American Financial Services, Inc. Cecil Ray also founded Wm. Rigg Realtors, a residential real estate and mortgage business that was sold in April 1999, after an "analysis of the risk/reward equation." When it was sold, Wm. Rigg Realtors had 470 associates and Rigg Group had a solid capital base to undertake acquisitions that supported its core business.
"We look for companies that complement the core business and provide cross-selling opportunities," Cecil says. "We are an active buyer of firms that integrate well with what we do. We are always looking to place another weapon in our arsenal. Having a group of companies offers us a spread of income sources. It has helped us survive and prosper during soft markets."
Jay Scheideman, Rigg's executive vice president and chief financial officer, adds, "We have tried to bring functions together on a group level where that made sense. We have allocated management and certain other functions among the entities within the group, using technology and talent to help determine where functions belonged. As a result, we have been able to increase revenues significantly while actually decreasing staff. (Rigg has 165 employees, with "very good revenue per employee.") Technology can claim a small portion of the credit, but people have been the real catalyst. We have an exceptional staff of people, many of whom have been with the company for many years. They have just gotten better at their jobs and more efficient and capable. Technology simply is a tool that has helped them to accomplish more."
The objective of Rigg is to be "a strong regional broker with the clout and expertise to compete with the national brokers," Cecil points out. "We are well known in the area and have the financial muscle and international connections (Rigg represents Lloyd's and has binding authority for certain coverages) that make it possible for us to compete for any size account. And, we have the distinct advantage of being able to make a decision in less than an hour."
Bill Meadows, senior vice president of Rigg Group, continues that "one of the things that characterizes Rigg Group is maximum flexibility. We have been very successful against the national brokers by assembling the most appropriate team for each client's needs. And that may include outside people where appropriate. We do a lot of partnering with outside firms when it is to our client's advantage. We have built a solid reputation based around our ability to really deliver for our clients."
Rigg clients range from "the corner shop to international conglomerates," says Charles Reynolds, executive vice president of Wm. Rigg Co. "We also have certain areas of expertise in which we've concentrated." These include transportation marine, manufacturing, energy, financial institutions and venture capital firms. In addition to Charles Reynolds, the Wm. Rigg Co. management team also includes Thomas N. Gillis, executive vice president of the Dallas operation; Bradley D. Johnson, executive vice president of the Houston office, and George A. Kane, senior vice president and marketing director.
The large accounts "primarily are centered in the Fort Worth office, which has 14 commercial sales people, as well as five individuals who are involved in employee benefits. We have worked very hard on cross-selling," Charles continues. Charles, who is in charge of life operations, adds, "Cross-selling has provided about 50% of the business generated by Rigg Life Agency, Inc. The balance is business we have gotten from direct solicitation or other sources." Among the products offered by Rigg Life are group health, group dental, group life and AD&D, group short and long term disability, group and independent long term care, payroll deduction cancer plan, self-funded plans, 401(k) and other deferred comp plans, cafeteria plans, as well as a number of products for individuals, including estate planning.
RISC, Inc., provides excess and surplus lines coverages to those clients that need such expertise. It also serves as an E&S broker that provides retail agents and brokers access to specialty markets. "About 55% of our business comes from the general agency side and 45% is brokerage business," says Robin Stough, president of RISC, Inc. In total "we will write just under $40 million in 2000, up from $27.5 million the previous year, of which about $10 million comes from transportation. The brokered business primarily consists of general property/casualty business with a heavy emphasis on energy. We have an underwriting facility for energy business."
"About 55% of our (RISC, Inc.'s) business comes from the general agency side and 45% is brokerage business. In total we will write just under $40 million in 2000 ..."
--Robin Stough, President, RISC, Inc.
American Financial Services, Inc. (AFS), Dallas, was founded in April 1987 by John Holsan, who was recruited by Cecil. John came to Rigg with more than 10 years of experience in the premium finance industry. "Cecil recruited me from AIG and convinced me to start up the operation," John says. "It was a little frightening to start from zero. And it has been an up-and-down experience since we are subject to both insurance market cycles and financial market cycles. We have been very blessed and have been able to weather the cycles to become one of the largest premium finance companies in the area." AFS has approximately
$120 million in loans in the Southwest and has expanded into California with a full service subsidiary--IBEX Financial Services, Inc., in Orange County.
"Today, only about 7% of our business comes from the Rigg," John continues. "Last year (1999), we did business with at least 1,000 different agents in Texas and about 800 in California. Ninety-nine percent of the loans are in the commercial sector with the average loan being approximately $5,000. Our competitive advantage is technology and response time," John says. "We invested heavily in technology right from the start. We were one of the first in the nation with an interactive Web site and are continuing to gear growth through the Internet."
Cecil continues that the "real success of Rigg stems from its people. Insurance really is sold and serviced by people. A good man or woman with an excellent product can be successful. And we spend a great deal of time and effort making sure we have good people. We recruit people with extensive background in their area. Most of our people are graduates of top universities. Many have CPCU, CIC, CPA or other designations and we continue their education when they come on board. Many of our people have come to us from national brokers. Thanks to the financial muscle of our group and our reputation in the area, we are able to attract the best people. They find out they can make more money and have more fun working with us. We do not have a time clock. They have personal freedom and get to work with the same markets." John Holsan describes the Rigg experience as an opportunity to exercise entrepreneurial talent with the strong financial backing of a well-known firm. "It's entrepreneurism with hustle."
Despite its size and extensive recruiting, the Rigg Group in many ways continues to feel like a family business. Many of the people who join the company are sons or daughters of people who already work there. They are attracted to the place because it is clear that their family members enjoy working there. "We also continue to look for people who fit with our culture," John points out. "It is an important concern for a company that wants to continue to sustain itself for another 105 years." Rigg Group has 20 stockholders, including a couple of outside investors.
Cecil concludes that the only real problem facing Rigg Group is "taking care of our accounts. That is our first and only concern. We consider that before we make any acquisition or consider entering a new business area. The client comes first; expansion follows." *