Agency of the Month

EMPLOYEE OWNED, CUSTOMER CENTRIC

ESOP assures succession to include members of the 50-plus person extended family

By Dennis H. Pillsbury

How does Bender Insurance Solutions, Roseville, California, remain independent? That was a question that had to be answered as this Sacramento-area agency doubled in size in five years. “That made succession difficult,” according to President Maggie Bender-Johnson, CIC, MLIS, one of the representatives of the third generation of the Bender family to lead the agency. She continues, “The ESOP (Employee Stock Ownership Plan), which was effective November 1, 2018, allows us to align our agency’s dreams with those of all our team members. A well communicated and managed ESOP gets everyone attuned to working for the success of the agency.”

“The ESOP really makes a statement to employees,” adds Shawna Weaver, Bender human resources specialist. “We trust our employees, and along with this trust comes an understanding that every employee decision and choice makes a difference and affects fellow team members, as well as our clients and the community.”

Chief Executive Officer Stephen Bender, CIC, CRM, CISC, picks up: “We have always been strategic thinkers and planners, and during our annual planning session we collectively recommitted to stay locally owned. We’re very proud to be the largest locally owned independent agency in the Sacramento area, and we want to remain that way.

“At that meeting, we reviewed all of the M&A activity in our industry and realized that a merger or acquisition of Bender was not our vision for our succession,” he adds. “We arrived at the decision to establish an ESOP as a key part of our succession plan designed to keep us sustainable long into the future. That already has paid dividends as we have been able to attract some of the most talented young people to come to work at our agency. They are seeking us out.”

The successions so far

Stephen’s dad, Warren, started the agency in 1938 and represented AAA Insurance. Prior to that, he had worked in the accounting department at a Buick dealership where he became acquainted with and then represented AAA. “It wasn’t long before he recognized the need to bring more choices for his clients if he truly wanted to provide adequate coverage for all their insurance needs,” Stephen says, adding that “as long as I can recall, Dad was vigilant in being an independent insurance agent representing a number of companies.”

Stephen joined the agency in 1972 and started to grow the business while buying stock from his parents. “I was lucky to work with my Dad for 13 years before he retired and I took over,” Stephen remembers. “He was a good mentor.” In 1982, another member of the second generation, James Bender, Steve’s older brother, was recruited to join the agency after spending several years in general construction management. He brought with him expertise that helped establish the agency in that arena.

As the ‘80s came to a close, Stephen developed within the agency a more deliberate team approach to management, because, as he says, “I was not comfortable being solely responsible for making decisions on future growth. In 1989, we began strategic planning, working together to identify areas for client growth, employee development, technology and community involvement. That has continued to be an annual process since then.”

In 1996, Christopher Bender, the first member of the third generation, joined the firm, followed by his cousin, Maggie, Stephen’s daughter, in 2005. Maggie’s sister, Jillian Bender-Cormier, came on board three years later, and in 2011, her other sister, Alison, joined the firm’s Reno office where she is an account executive.

“Our next successor-leaders may or may not have the same last name,” Maggie says. “At this point, we have no concrete plans around the fourth generation. They may or may not come into the agency. The ESOP guarantees, however, that whoever takes over will be able to move into my position without having concerns about an expensive and unwieldy buyout, regardless of how fast the agency grows.

“My job is to prepare for that eventuality, in addition to my regular responsibility of making certain that the agency remains profitable and maintains a high profile in the community and the insurance industry,” she adds.

The agency evolution

Stephen describes the agency’s evolution over the years as becoming more and more focused on risk analysis and risk management, where “insurance is just one of many solutions.”

Edward Johnson, CRIS, vice president of construction risk, adds: “It is imperative that we take an approach that differentiates us from our competitors. When you think about it, most agencies have access to the same markets and are able to offer similar coverages at about the same price. So, what we have to offer is expertise in the client’s industry that allows us to put together a package of insurance coverages and risk mitigation strategies that helps them lower their overall cost of risk while still making certain they have the right protection for their underlying risks.

“In my specialty area, that also means understanding the surety market,” he adds. “I came here in 2003 after working in banking and credit lending, so moving into surety was pretty seamless. And, while this agency has always emphasized a family atmosphere, for me it was even more so, since my father, Dave Johnson, was working here when I joined. He has since retired after 23 years with Bender.”

Edward goes on to point to two areas where the agency really has built a unique culture that assures the customer experience will be exceptional: “We are always looking at every move that we make with a focus on its impact on our clients and our community. And we are big believers in education to assure that our employees can continue to maintain their expertise in their chosen niche market or in their job inside the agency.

“We pay for employees to pursue designations,” he adds. “And we extend this focus on education to our clients, so that they become smart consumers of the risk transfer options being offered. We are confident that when they become experts about risk, they will see that we truly do offer something that is unique and worthwhile.

“When I first joined,” Edward continues, “the education for clients consisted of breakfast seminars called ‘Eggs and Issues’ that we were able to offer a couple of times a year at a local hotel. Now we have a training center where we can offer seminars every month on an eclectic set of topics and also online through BenderU.”

Happy employees mean happy clients

“When I joined Bender,” Shawna says, “it was for the challenge of working in human resources at a company that had just passed the 50-employee threshold. Many added regulations came into play at that time. However, my job isn’t focused solely on compliance, but on employee job satisfaction as well. That’s no easy feat, but we have a great management team that is really focused on creating a culture where employees are valued and also accountable. The adoption of the ESOP has made that easier as everyone understands that what they do affects everyone else, as well as the success of the agency overall.

“And, because that doesn’t keep me busy enough,” she says with a laugh,

“I am also the chair for our Community Outreach Committee. Our committee is responsible for finding ways to engage in the community, such as reviewing sponsorship and donation requests, coordinating volunteer days for our staff, and hosting fundraisers for organizations that are near and dear to our employees.

“Just this last holiday season, for example, we supported the Salvation Army Angel Tree program where employees could select and fulfill gift requests for children in need,” Shawna adds. “We also just held our annual volunteer day, where we helped at the Placer SPCA. Last year, we volunteered at the Loaves & Fishes in Sacramento, where we prepared and served food to the homeless.

“In addition to doing amazing things to help our community, we also do amazing things for our employees,” she concludes, so Jillian Bender-Cormier, the agency’s brand manager and chairman of the Fun Committee, can take over the discussion.

“I am the steward in helping to carry our message externally and internally,” Jillian says. “One of my responsibilities is to oversee all of our marketing efforts to ensure consistency in the way our brand is used in our social media, website, marketing materials and at client events as well. I’m really proud to be able to carry the torch for our agency as a member of the third generation and to try and extend my enthusiasm to all our team members whom we see as part of our agency family. Like any family, we need to have fun as well as work toward a common goal. And I have the enviable task of helping to plan that fun.

“We have regular potlucks,” she adds. “We’ve rented an entire movie theater so our whole team could go see a film together. We went to Top Golf for another event. In the fall, we have a company Harvest Festival that includes a scarecrow decorating competition, face and pumpkin painting for kids, and loads of family activities.

“We also get together off site to talk about and celebrate our differences,” Jillian explains. “We try to focus on ideas and issues that may be uncomfortable at first, usually issues that might cause tension in the workplace if we don’t get them out in the open and discuss them. That proved difficult at the start, but now folks are enthusiastic about sharing and it’s gotten even better since the ESOP gave everyone an ownership mentality.”

Maggie concludes that one of the tools to help the team members celebrate their differences has been the DISC assessment. The assessment, developed by industrial psychologist Walter Vernon Clarke, focuses on four personality traits: dominance, influence, steadiness and conscientiousness. “Every team member has taken the assessment, and the results are shared outside our workspaces,” Maggie notes. “This allows us to quickly know the style of our colleague, so we can communicate and interact optimally.

“Interestingly, through this process we found that our leadership team of 12 is well balanced, with three individuals representing each of the four styles. As a team we’ve had some fantastic results, and I think our growth and other successes have come about, in part at least, as a result of this diversity of styles and approaches.”

The agency has reached $10 million in revenue on total sales of $106 million. “When I joined,” Stephen points out, “our total sales were $115,000, and we look forward to seeing our sales trajectory grow with our new leadership and terrific team members.”

Rough Notes is proud to recognize Bender Insurance Solutions as our Agency of the Month. Their commitment to independence is worthy of recognition.

The author

Dennis Pillsbury is a Virginia-based freelance insurance writer.