Marketing Agency of the Month

Work hard, play hard

Mackoul develops distinct presence in the New York metro area condo market

By Dennis H. Pillsbury

Strong beneficial relationships have been the keys to success for Mackoul & Associates, Inc., Long Beach, New York. The agency has created a win-win-win-win where employees, clients, carriers and even competitors have benefited. And the agency has managed to carve out a unique presence in a market where it is much easier to disappear into the woodwork.

Robert E. Mackoul, CLU, founded the agency in 1987. He had no premium, just his financial services clientele and an idea. His clients were buying and selling apartment buildings in New York City. He decided he would focus on providing coverage for real estate owners, and condominium/cooperative buildings in the New York metropolitan area. While he spent most of his time growing his financial services business, early on he systematically developed relationships with property management firms, and condo board members until he really got noticed in December 1990.

He was conducting a course for the Council of New York Cooperatives, which was attended by a reporter from the The New York Times. “Out of the blue, the reporter called me,” Robert remembers. “She was working on a story about insurance in the New York co-op and condo marketplace and interviewed me extensively. The story came out in the Sunday edition and I was completely misquoted, stating that I could save any co-op or condo building in New York up to 60% on their insurance premiums.”

The result was predictable. The agency got lots of calls from many building managers and board members of condos wanting to save 60% ... and a lot of calls from irate competitors ... and carriers. And he told each person the same thing, starting with: “I never said that,” explaining that he was misquoted and then, if it was a potential client, he went on to suggest that he look at their insurance needs.

Over the next few years Mackoul continued to be quoted (correctly) in the New York Times and often in Newsday, which is published in Long Island and does reach into New York City, plus other real estate media such as Habitat Magazine, The New York Real Estate Journal and The Cooperator newspapers, all of which enhanced the agency’s growing reputation. The agency premium volume at the end of 1996 was just shy of $3 million yet in the past decade Mackoul & Associates’ growth has been more than 800% and the agency expects to end 2007 with over $25 million in premium. All the growth has been organic with Mackoul, his son Edward and one producer Patricia Batih as the sales department.

A culture of success

During its early years, the agency developed a sales culture based upon the life and health industry where Mackoul began his career with Penn Mutual Life. “We have built a sales culture that each employee is a partner in the overall success of the agency and that everyone has a vested interest in its success,” states Robert. As such, every employee is rewarded with bonuses and perks as the agency reaches higher and higher levels of growth during the year.

“We have our goals set for growth and retention by the beginning of every year, and the marketing plan of how we are going to achieve them,” Robert notes. “Every employee knows from the beginning of the year, where we are, where we are going, and how we are going to get there in a large offsite kickoff meeting.” The agency meetings each month are held to review monthly sales and retention, and track progress. As the agency grows, the staff achieves higher and higher levels of awards. Each staff member shares in awards ranging from dinner for two, concert tickets, $500 clothing bonuses, and a weekend at an upscale spa—all at the agency’s expense. The agency also creates a significant bonus pool where employees can earn up to 25% of their salaries based upon agency profitability and their individual performance reviews.

“At year-end if we reach our annual agency growth goals, we take each employee and a guest on a five-day paid vacation to an all-inclusive resort. This year, we went to Punta Cana in the Dominican Republic. We’ve also been to such places as Jamaica, The Bahamas, Cancun, Mexico, and other exotic areas where we can relax with each other and our families. It’s a chance to have fun, but it’s also a chance for the staff to bond and if they have any problems, to work them out in a relaxed environment,” Robert continues. “It’s been instrumental in cementing the core values of our agency.”

A team effort

The agency markets extensively and promotes itself and the staff to the real estate industry through advertisements in the real estate media, electronic emails, newsletters and their Web site. It targets the boards of directors, management firms, attorneys, and centers of influence that can help the agency. “Our goal is to be valued advisors to all and we’ve worked hard to brand ourselves,” states Edward Mackoul, president of Mackoul & Associates. Staff members hold insurance seminars in management firms, while Robert and Edward lecture at educational conferences. “We apply a ‘boots on the ground approach’ to visiting management firms and attending as many board meetings as possible to make our presentations.” As the agency insures more than 650 condominium and cooperatives, that can be quite a task. The agency has continued to grow and prosper in both hard and soft markets in one of the most competitive cities in the country.

Managing the risk

“One of the keys in this business is recognizing that property managers and board members are very busy people and don’t really want to get into all the details,” Robert points out. “They are pressed for time and need their answers right away and they want service in a timely fashion. They also want help with preventing losses and assisting with losses and claims, and that is our specialty. We are experts in our niche. I was trained in loss control by numerous carriers and have brought that skill with me to the agency and trained others as well, including my son, Eddie. We inspect every single risk that we are going to quote,” Robert continues. “The inspection lasts at least 45 minutes. At the end, we provide our carriers with a five-page report and pictures as part of any submission. The client is given a report that includes our recommendations to make the building a better risk.”

“New York City is unique in that it imposes absolute liability on landlords, so transferring risk and reducing the potential for liability claims is a necessity,” states Edward Mackoul. “Of course, our clients appreciate our efforts to reduce losses. But our carriers do as well,” he continues. “One of the reasons we are successful with our insurance company partners is that we provide them with very profitable business. Thanks to our focus on loss control, our loss ratios are consistently in the 20s.”

Over the years Mackoul & Associates has developed strong carrier partners. “In 2006, Praetorian (now QBE) awarded us an exclusive condo and co-op program for smaller buildings that was modeled after a similar program they wrote in Chicago,” Robert says. “They chose us because of our reputation for producing profitable business and because we insure a substantial number of smaller buildings in the area.”

The people are the key

“None of this could have happened without the talented people who have embraced our culture and have been willing to work long hours and learn the niche market,” Edward offers. It began 17 years ago when Cheryl Fitzpatrick joined the agency. She was followed by Deborah Mackoul, Carol Lopez, Edward Mackoul, and Sally Dolce within the next five years. Each recruited other staff members, and the agency has become a blend of both seasoned and young professionals who all have one thing in common: None of them had any insurance experience before they were hired. “Our philosophy has been to hire smart people and then teach them insurance and integrate them into our culture,” states Sally Dolce, chief operating officer of the agency. Over the years it has proven to be a successful recipe as the staff now numbers 20 employees, all of whom were recommended and recruited by fellow Mackoul & Associates employees.

“I can’t say enough about our people. They all act like partners and we treat each one as such. You can walk into the office on a given evening and staff members will be working at 7:00 or 8:00. Since most employees have remote access, a lot of unplanned meetings occur online at night after the kids are in bed. We really have a unique culture where everyone recognizes that each of us is dependent upon each other for our ultimate success, so we added a perk that employees have the right to reward co-workers with a day off for exceptional service rendered to clients or their fellow workers,” Edward states.

“The result is that we have an organization where the sum is much greater than the individual parts, and the staff is celebrated both individually and collectively as the agency’s greatest asset,” concludes Robert.

New Empire Group, Ltd.

Another important area of coverage for condos and co-ops is the commercial umbrella. “When we started out, we couldn’t compete against competitors who had high-limit umbrellas in the $25 million to $50 million range,” recalls Robert. “In 1998, we were able to convince Zurich to provide us with a $50 million umbrella, and we created New Empire Group, Ltd. as the program manager. The agency was used only to place Mackoul & Associates business. However, Zurich told us to expand outside of Mackoul Group (the parent company for both the retail operation and the program manager). We agreed, and both Deborah K. Mackoul (president) and Rob Mackoul Jr. (underwriting manager) moved from the retail agency to the program manager agency and started offering the commercial umbrella to other New York brokers including our competitors,” Robert continues: “Many of the brokers and our competitors also had trouble accessing this market and greeted our entry as a program manager favorably,” states Deborah, “and then we expanded the program to other states.”

Today, New Empire Group, Ltd. has grown to include two separate and distinct umbrella programs of $100 million each, with Zurich & Chubb Group writing the primary layers. Jim O’Neill joined the agency in 2006 to direct marketing and has been instrumental in a short time in branding the agency as the “Umbrella Depot.”

“The agency is licensed in 40 states, employs eight people and writes nearly $11 million in umbrella premium,” states Deborah, “and we’re growing every day.”

Although Mackoul & Associates and New Empire Group are housed in the same building, they operate independently using different file servers and software programs, but their company cultures are the same as well as their commitment to growth and excellence.

Mackoul & Associates is unique in many ways. It is a family-owned and controlled business that has a distinct presence and is well known in a large and difficult market. It has built a reputation for integrity and great service that has allowed it to work with competitors in the New York Metro area, and its young program manager arm, New Empire Group, has expanded nationally with its products and services. We are pleased to recognize the agency as this month’s Rough Notes Marketing Agency of the Month. *