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The Rough Notes Company Inc.



October 31
07:48 2018


Syracuse agency celebrates its 90th anniversary with an eye to the future

By Elisabeth Boone, CPCU

Anyone who makes it to the age of 90 deserves to party as hearty as possible—and they shouldn’t be forced to undergo the strenuous ritual of blowing out those 90 candles.

Last month some 300 current and former employees of Haylor, Freyer & Coon, Inc. (HF&C), gathered at a downtown hotel to mark the Syracuse agency’s 90th anniversary, and to reflect on past achievements while looking confidently toward the future. Chosen as the Rough Notes Agency of the Month in December 2003, HF&C has devoted the intervening 15 years to building on its impressive success and developing a new generation of risk management professionals. The employee-owned firm ranks among the top 100 independently owned agencies in the country and employs 180 people in six offices throughout New York State. HF&C is a member of Assurex Global, a privately held commercial brokerage group that provides local risk management expertise through more than 600 offices in 70 countries.

When the 2003 article was published, HF&C had 220 employees in 14 offices throughout the state. Today those numbers are, respectively, 180 and six. “We’re doing more with less,” says CEO and Chairman Jim Freyer Jr., who represents the third generation of his family to help lead the agency. “We’ve grown and continue to grow more efficiently by using technology and implementing our Quality System.”

HF&C’s revenue is 70% commerciallines, 15% personal lines, and 15% em-ployee benefits. On the commercial side, niche markets are agriculture, construction, manufacturing, real estate, social services, transportation, government/education, municipalities, and manufactured housing dealers and communities. The employee benefits unit, which Freyer says is growing as a percentage of agency revenue, provides services that include utilization and cost analysis, administrative relief technology, employee engagement and communications, compliance management, and employee wellness programs.

Reflecting on the agency’s accomplishments over the last 15 years, Freyer says the most important one is that the firm is still employee owned and independently operated, having remained so amid a tidal wave of acquisitions and mergers among independent agencies.

Understandably, HF&C is an attractive target for aggregators and other entities that are eager to acquire. “This article is bound to increase the number of phone calls I get from would-be buyers,” Freyer says with a laugh. “We’re flattered by the interest, but building an agency and then selling it to a larger firm is not our model. It may work for other agencies, but it’s not for us. Over 90 years we’ve created a culture that’s challenging to maintain but totally worth the effort.”

Another key accomplishment for HF&C, according to Freyer, was becoming an Assurex Global partner in 2008. “When you look at commercial risks today, it’s clear that more and more clients have global exposures,” he comments. “We’re able to address those exposures with the support of our Assurex partners and in turn assist them when they need risk management expertise in the United States.”

“Over 90 years we’ve created a culture that’s challenging tomaintain but totally worth the effort.”
—James D. Freyer Jr.
Chairman and Chief Executive Officer

The next generation

The biggest challenge any company faces today, Freyer asserts, is recruiting and training the young people who will take the business into the next generation. “Over the next three to seven years we’ll see a number of our Baby Boomer employees retiring, so we have to attract our future leaders,” he says. “I’ve been quoted as saying that insurance is not a sexy industry. As college and university graduates enter the workforce, we need to ignite their interest in becoming risk management professionals. We need to do a better job of explaining the ‘why’ of the services we provide and instill a sense of excitement about the opportunities we offer.”

Rising to the challenge, HF&C has implemented some key changes in the way it runs its marketing operation. “Back in 2003, we had a sales manager who was responsible for about 30 producers,” Freyer recalls. “That model worked for us at the time, but recently we’ve moved to a sales team leader model under the direction of our president, Robert Rayo. Four additional members of our executive team also serve as team leaders, as do five other employees. Each leader supervises a group of three to five producers, and they work as a team to hold each other accountable and learn how to gain access to the resources they need.

“The team leaders have a financial stake in their groups’ success. The planning phase took six months, and we put the new model into effect on September 1 of last year. Our fiscal year ends on August 31, and we’re coming off a highly successful year in terms of new business written,” Freyer says proudly.

“Using this approach allows us to foster growth internally,” he explains. “It’s a key part of the process we follow to find and mentor future leaders. We currently have a part-time trainer and have received board approval to hire a full-time trainer whose title will be corporate development leader. This person will help train the younger, less experienced individuals who come into our agency on the service side.”

What’s more, Freyer adds, “We’ve received approval to hire a full-time recruiter. We’ll take recruitment in house in our HR and marketing departments. At HF&C, recruitment involves not just finding individuals for positions we need to fill but also identifying people we’ll want to hire down the road.”

Recently the agency announced plans to move from its current suburban location to new offices in downtown Syracuse. “We want to make the transition to a new space in which we can foster collaboration and teamwork, while maintaining an appropriate level of privacy,” Freyer says. “We’re in the design phase and expect to make the physical move in May of 2019. Understandably this transition brings some angst with it about issues like parking and security, and we’ll communicate details to our employees before the move.”

Quality is king

In our 2003 profile of HF&C we explained that the agency had earned certification by the International Organization for Standardization (ISO—not to be confused with Insurance Services Office). As described on its website, this entity “creates documents that provide requirements, specifications, guidelines, or characteristics that can be used consistently to ensure that materials, products, processes, and services are fit for their purpose.” Originally conceived as a means to ensure the quality of manufacturing processes and products, ISO certification has expanded to encompass the delivery of services as well as goods.

HF&C is located close to the Canadian border and through Assurex Global also writes business in Europe. Many companies in these countries require ISO certification of their outside vendors, so HF&C decided to pursue certification as part of its marketing strategy. Certification, which the agency has held since 1999, is maintained through a twice-yearly third-party audit of its operations.

“Over the years the standardization of quality has become part of our culture.”

—Cyndy Smith
Chief Information Officer

Cyndy Smith, chief information officer, explains how ISO certification works in the agency. “It’s a business process standard that focuses on quality,” she says. “We have to define and document our best practices and all the procedures we follow, including sales, training, and other functions, with a key focus on the service we provide our clients. In essence we have to say what we do, write it down, and then do what we say. All of our documentation is readily accessible to our employees so they can understand our expectations.”

Smith explains the ways in which ISO certification has benefited the agency. “First, it differentiates us from our competitors,” she notes. “We can say that, for 20 years, we’ve held this certification of quality. This proves that we’re committed to quality instead of just talking about it. I’ve had the opportunity to sit in on some meetings with major clients, and I’ve observed that when our ISO certification is highlighted in the PowerPoint presentation about our agency, people sit up and take notice.

“I also believe that ISO certification is a point of pride for our staff because they recognize that it does differentiate us from the agencies with which we compete,” Smith continues. “We’re one of just a few independent agencies in the country that hold the certification, and that too is a point of pride.”

Because every procedure is documented, Smith adds, “We’re all following the same procedures. Going back 20 years, before we earned ISO certification, everyone in our 14 offices was doing everything differently, with no consistency across the organization. Over the years this standardization of quality has become part of our culture.”

Adds Freyer: “We share information about our certification with our carrier partners, several of which have granted us underwriting authority. Our carriers appreciate the fact that we have a streamlined process. I often say, ‘Everyone will tell you they have a quality system, but it’s usually in a notebook on a shelf.’ Our system lives and breathes and changes weekly. It’s customer focused, and it’s documented, audited, and verified.”

Taking clients’ pulse

Most agency principals are eager to find ways to measure the degree of success they’re achieving with clients, and HF&C is no exception. To gauge client satisfaction the agency uses the Net Promoter Score® (NPS), which ranks on a scale of 1 to 10 how likely a client would recommend a given brand to a friend or colleague.

Respondents are grouped into three categories:

  • Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others.
  • Passives (score 7-8) are satisfiedbut unenthusiastic customers whoare vulnerable to competitive offerings.
  • Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word of mouth.

Subtracting the percentage of Detractors from the percentage of Promoters yields the Net Promoter Score, which can range from a low of -100 (if every customer is a Detractor) to a high of 100 (if every customer is a Promoter).

A score of 50 or above is consideredexcellent, and a score of 70 or better is considered world class. As of August 31 of this year, HF&C’s NPS was 71.

To put the agency’s score in perspective, Smith shares an intriguing finding. “On a consistent basis, USAA has achieved the highest Net Promoter Score in our industry, and it’s at 81, so we’re in good company.”

“For us as an independent agency, differentiated or proprietary employee benefit programs are a huge part of how we demonstrate our value versus publicly traded corporate competitors.”
—Tom Flynn
Vice President and Director,
Group Benefits Division

Eye on benefits

As noted earlier, employee benefits products represent about 15% of HF&C revenue, and that segment of the agency’s business is growing. Tom Flynn, vice president and director of group benefits, explains the firm’s approach to the market.

“For us as an independent agency, differentiated or proprietary employee benefit programs are a huge part of how we demonstrate our value versus publicly traded corporate competitors,” he says. “We focus on several areas; the ones that are most visible to clients are prescription drug management, mail order drugs, and employee advocacy.

“Prescription drug management is getting a great deal of press from the president on down,” Flynn observes. “It’s the fastest growing component of the benefits spend.

“Haylor Rx is our bundled approach to bringing efficiency to the marketing of pharmacy plans, bringingtransparency to the comparison process, and bringing technology to monitor the contract on an ongoing basis to ensure that we’re meeting the client’s expectations,” he says. “The result is savings that currently average over 10%. But a larger deliverable is the reporting and tracking, confirming those savings on a quarterly basis.”

Turning to mail order drugs, Flynn says, “Our Assurex partnership with other U.S. firms has embarked on a proprietary program to wring margin out of maintenance medications. Through an approach that uses a flatter organizational structure and direct contracts, we can save our clients up to 35% in this category.”

Employee advocacy is a key component of HF&C’s benefits strategy. “Employee benefits are expensive,” Flynn asserts. “A primary driver is lack of cost transparency. In-network provider prices can vary by five times as much as another provider. Few people understand the reasons for this inconsistency, and the explanation is highly complex.

“We’ve assembled a team backed by technology to ensure that employees have a healthcare Sherpa to guide them at every step: to help them understand cost, quality, and choice. We provide this service under an exclusive arrangement and see our approach as offering both an improved experience and cost savings for employees.”

As Haylor, Freyer & Coon marks its 90th anniversary, its employees can look back proudly on nine decades of growth and look ahead to new challenges and the opportunities they present.

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