This Texas agency has grown from startup to
one of the state’s largest independents
By Dennis H. Pillsbury
When Doug Hotchkiss, CPA, CIC, CRM, founded Hotchkiss Insurance Agency fifty years ago, he could hardly have imagined that it would become one of the largest privately held agencies in the state—employing more than 200 people in five offices throughout Texas. Or maybe he did.
As his son Mike points out: “Dad was not a producer; he was a visionary who helped lead a home building development company. As part of that endeavor, like a true entrepreneur, he started offering insurance to capture the insurance purchase attached to home sales. He saw this as a natural vertical integration in their business.
“When they sold the company in the mid-’70s,” Mike recalls, “the purchaser did not want the insurance portion, so realizing the potential in the agency business, Dad formed Hotchkiss Insurance in 1975.”
Mike Hotchkiss, CPA, CIC, CRM, who now serves as chief executive officer of the agency, points out that “Dad was very analytical and built his decisions on information. He read Rough Notes religiously and recognized early on that to achieve high growth, he needed to move into commercial lines.”
He started out by working in a niche that he understood and where he already had contacts: residential construction. “This led to diversification to others involved in building, like plumbing, roofing and so on,” Mike explains. “This was helped by the fact that his focus on service and commitment to the community resulted in numerous referrals.
“In the late ’90s, we moved into surety and benefits to round out our offerings to commercial clients. Today, the original personal lines practice is now focused on high-net-worth clients, and the larger commercial areas of the practice also include a high-growth innovative employee benefits division.
Along the way, Doug started to bring on talented people who shared his vision of providing the best possible service to every client through a set of four core values that have been completely integrated into the agency culture: Be inquisitive, agile, loyal, and passionate.
Value driven
“Out of these values grew what came to be known as the Hotchkiss Way,” Mike continues, “which is anchored in our agency’s purpose: To provide protection in a world of unknowns.”
Ken Hotchkiss, CIC, CRM, was the first of Doug’s sons to join the business, in 1995. Mike came on board in 1999 and Greg Hotchkiss, CPA, CIC, CRM, joined in 2004.
“We joined a going concern with all the fundamentals in place,” Mike recalls. “Since Dad was not a classic producer, he was not confined by the traditional approach of glad handing and back slapping and golfing. Instead, he was a business person right from the start, with the agency performing internally as a meritocracy, where employees were rewarded accordingly.”
Ken echoes Mike’s observation: “Doug built an agency focused less on relationship-selling and more on focused business solutions.” This focus led to accelerated growth.
“Fortunately, Ken, Greg and I were blessed to be born into a high-functioning family and our performance led to us being moved into leadership,” Mike adds with a smile. “But we weren’t alone. In 2008, we reorganized into a partnership, so others in the agency could become owners and part of the leadership team.
“Unfortunately,” he recalls, “that was right in the middle of the sub-prime mortgage crisis, which provided us with an important and difficult lesson: External forces can sabotage your growth. Pay attention to your KPIs. The music can stop. We’d grown very rapidly up until 2008 and had over-hired.”
A hard lesson
“Welcome to leadership,” Ken adds with chagrin. “We had to right the ship by leaning up. We had to go back to focusing on business fundamentals,” he adds. “It was clear that we needed to do more with less so we could weather future storms without having to take drastic action.
Franchise Specialty Team Lead; Patrick Shields, Franchise Team Account Associate; and
Madelynn Lindsey, Brand Marketing Coordinator.
“Fortunately, our culture of doing the right thing helped us to maintain morale during this difficult time. The fact that we have many employees with us who have tenure of more than 25 years, means that we did something right since they stayed with us through that crisis.
“We always believed that we were far from perfect,” Ken adds, “and that crisis and the subsequent downturn certainly brought that home. But we also knew that learning from mistakes is part of growth. We had to be able to face huge challenges without sacrificing our values.
“It became clear that we had to find a way to be effective with culture so that it became ingrained within each employee’s daily dealings with our clients and, hopefully, resulted in all of us living better lives and enjoying better relationships with clients, carrier partners, co-workers and family members,” he explains.
Developing people
In 2015, a change occurred that was not unexpected, but in some ways even more significant than surviving the mortgage crisis. Doug stepped down and Mike took over his role as chief executive officer, with Ken becoming chief operating officer, and Greg remaining the firm’s chief financial officer.
“Working with family isn’t always easy, but it can be a rare blessing if done right. Knowing this, we brought in a consultant to guide us through this critical leadership transition,” Mike says, “and now we have the pleasure to lead the firm along with our executive team and fellow partners.”
They still saw opportunities to further develop their unique culture. “We wanted to build what was essentially a great marriage by including all our employees in the process of developing a strong set of fundamentals that would reflect our culture and could be met by each employee. This became the Hotchkiss Way, which I mentioned earlier, and includes 36 “Fundamentals” that help to spell out what we mean when we talk about how we behave in practice.
“To help inculcate these fundamentals into each employee’s life, we decided to focus on one per week, going through the list of 36 and then starting over,” Mike continues. When this writer conducted the interview with Mike and Ken, the agency was on “Treat each other like family.” This Fundamental is sent out to each employee on Sunday night via email. It is used at the beginning of every meeting by the person who calls the meeting, and it is the subject of a quiz that goes out on Wednesday.
The Sunday email includes a description of the Fundamental. In this case it is defined as: “Our relationships go deeper than simply being teammates at work. We genuinely care for and about each other. Whether it’s a kind word during a tough stretch, a friendly smile each morning, or a helping hand in stressful times, show your compassion.”
This effort to invest in people and develop a culture of caring has paid dividends. In the last 10 years, revenues have tripled. “This is the result of a culture that focuses on developing our people, aligning our values and work ethic, and giving them a runway to grow,” Mike says. “By having a culture that is built around the whole of the person, we have happy people who reflect that when they deal with clients and, hopefully, when they deal with family members. They actually want to provide excellent service and always do the right thing at every moment.”
“[We] bring in people who fit our culture but don’t have any background in insurance. … We now have a learning department that has evolved to become part of our winning the war for talent.”
—Ken Hotchkiss
“Out of [our agency] values (be inquisitive, agile, loyal, and passionate) grew what came to be known as the Hotchkiss Way, which is anchored in our agency’s purpose: To provide protection in a world of unknowns.”
—Mike Hotchkiss
Winning the war for talent
Ken points out that one of the key ways the agency can attract talent has been “our ability to bring in people who fit our culture but don’t have any background in insurance. Using what we now call Hotchkiss Learning was actually part of what we’ve done for a long time. We now have a learning department that has evolved to become part of our winning the war for talent.
“Not only does this offer instruction on the fundamentals of insurance,” he adds, “but it also helps each person attain industry designations that will help them go as high as they want. One of our current leaders started in the mailroom. People see examples like this and recognize that there is no ceiling on growth.”
Not surprisingly, the agency also has a significant role in supporting the communities through charity. “That’s been part of the DNA that we inherited from Dad,” Ken and Mike both point out. Mike continues: “We want people who want to serve something outside of themselves. To help with that effort, we have organized a 501(c)3 called Hotchkiss Helps to support our efforts.
“Hotchkiss Helps has committees in each of our five offices that are completely employee led and help decide which charities will be supported in addition to the largest fundraiser—a golf tournament in April that’s been sold out every year. We are grateful for our trade partners who consistently support this effort.”
“And because this is our 50th Anniversary,” Mike notes, “we want to do something that truly reflects our values. We are committed to doing 50 charitable activities in 2025. We want to celebrate this milestone by being particularly mindful of and intentional about serving others.”
Rough Notes is proud to recognize Hotchkiss Insurance as our Agency of the Month. Not only do they focus on helping others, but they have proven that this approach works. By helping clients succeed, the agency has enjoyed spectacular success, “with new business equaling 20% of revenue in each of the last five years,” Ken concludes.
The author
Dennis Pillsbury is a Virginia-based freelance insurance writer.
