The agency is divided into three teams--personal lines,
commercial lines and automation.
Agency president John Hilton (left), Pam Gaeth, bookkeeper, and Operations Manager Dennis Hilton, review monthly budget projections.
The agency's staff includes (left to right): Julie Johnson, Lynne Campbell, Brenda Hilton, Rosemary Campbell, Dennis Hilton, Pam Gaeth, John Hilton, and Debbie Furman.
Cheney Insurance Agency in Damariscotta, Maine, was started in 1954 by Ralph Cheney and his son-in-law Mac, as an accommodation to their successful real estate business. And, as such, it remained primarily a sales organization dependent on personal lines and referrals from area realtors.
But, like many agencies that started out this way, Cheney Insurance Agency began to take on a life of its own. Producers began to develop business that was unrelated to the real estate office and, in 1968, John Hilton joined the agency as a life insurance salesman to further enlarge the insurance business. John became more and more involved in the growing success of the agency and was identified as the logical ownership successor. And, in 1976, he and his wife, Brenda, became the owners when Mac and Arlene MacKechnie both died.
In 1985, John and Brenda responded to their son Dennis' request to join the agency. Dennis had been employed in the auto parts business and expected to continue in that field. But those plans changed. At the time he joined the agency, it had grown to around $2 million in premium with five employees. Dennis started as a personal lines CSR, but then a void occurred in the agency when a commercial lines producer left. Feeling an obligation to take that position, Dennis also "realized that I really did not want to do that. I was more interested in work flows and operations. I think my parents were a little concerned about this decision to spend my time in this way, but they gave me the opportunity to give it a try."
And this is really where our story begins, with the transformation of the agency.
"We had no job descriptions, no written procedures, no accountability, no goal setting, none of the things that I felt should exist in a progressive agency," Dennis says.
Dennis started working on agency operations. "My parents gave me the ability to do this. I really appreciate the opportunity and we are fortunate it worked out."
For the past three years, the agency has been seeing the results of the investment in change. Today, premium volume stands at about $3.1 million. This is in a town with a population of 4,000 and a trading area that includes around 15,000 people. There are four competitors in town. "We grew fairly quickly from $2 million to $3 million," Dennis says. "However, lately growth has slowed primarily due to a very soft commercial lines market." He adds that "personal lines has shown good growth throughout this period." The mix of business still is heavily weighted toward personal lines, the "bread and butter" for the agency when it was accommodating the real estate company. About 58% of the volume comes from personal lines, another 10% from financial services and the balance is from commercial lines. "One thing that has really helped us grow," Dennis notes, "is our reputation for providing fast and accurate service to realtors and bankers in the area."
The agency is divided into three teams now--a personal lines team headed up by Lynne Campbell, personal lines manager; a commercial lines team headed up by Dennis' mother Brenda Hilton, commercial lines manager; and the automation team headed up by Dennis, operations manager. Under this, the members of the personal lines team do all the servicing of accounts, but none of the processing. That is handled by the support team that includes the processor, receptionist and bookkeeper. "This has opened up loads of time for our people to upsell and cross sell," Dennis points out. All told, the agency has nine employees, three of whom work part time.
Every employee now has a job description and performance standards that clearly define his or her job. Their jobs are continually evaluated to determine how things are working out, and adjustments are made where necessary. Twice a year in January and July, performance reviews are given to each employee that include written comments from the employee about his or her job. Management actively solicits advice about what can be done to make the job easier, which tasks seem to have little value, whether the employee sees any duplication of effort, and what is good about the job and what isn't working. They also ask for any specific issues the employee might want to discuss. There also is an offsite staff planning meeting once a year, usually around May.
The agency uses the Redshaw System and has worked very hard to maximize its effectiveness. Everyone at the agency has a PC on his or her desk. "I've been in the users' group for years and was on the board for NERAA (North East Redshaw Agents Association) until last year. I still attend the conferences and promote transactional filing. We send out people to meetings and training sessions. All software used in the agency is evaluated by our teams to determine if it's right for us. We now use AMS rating," Dennis points out, noting that it replaced another integrated rating product that employees felt was too slow. "We looked at a number of rating products before we decided on this one."
The agency uses MS Publisher to generate marketing materials and maintains a referral network database on the DELPHI/Redshaw agency management system consisting of attorneys, contractors, glass companies, auto repair shops, loan officers, realtors, appraisers, surveyors, bed and breakfast owners and members of the Chamber of Commerce. "We send new flyers every quarter to our referral network asking them to remember us and keep us in mind if they or their customers have any insurance needs. Twenty-five percent of these 450 letters are hand-delivered, a task shared by all of the people in the agency. They go out and talk to these people. We don't actually solicit business at these visits, we just say hello and ask them how they are doing. Our efforts are usually well received and this really serves to energize our people. It's a strong, feel-good exercise.
"We also send out customer satisfaction cards weekly to new policyholders, to lost policyholders, to our insureds who just had a claim closed and to other claimants who were not our insureds. When anyone returns a card, they are then solicited for a written testimonial and for referrals. We get a very high rate of return on these letters," Dennis points out, noting that out of approximately 20 letters sent out every week, they get about five returns. "We read the cards that come back at the Wednesday staff meeting. We also share the letters with the company or adjuster if they are mentioned."
He continues that these testimonials have become "an important part of our advertising and marketing effort. We always ask if we can use them and usually receive an OK. We keep a book of some 110 personal or handwritten testimonials in the waiting area where prospective clients can see them. There's also a television in that room that has a power point presentation looping. The presentation talks about coverages and includes some of the testimonials. We also have a home page on the Internet (www.lincoln.midcoast.com/~cheney), and are recording testimonials for use on the Internet."
The agency's advertising includes a series of newspaper ads with pictures of the children of clients and employees in interesting situations. For example, one ad shows Dennis' two sons, Nathan and Christopher, wearing dark glasses with the caption: "Don't Sing the Insurance Blues" and a text that says, "Find out what these 'Blues Brothers' and hundreds of our customers are singing about...." Another ad shows a baby with eyes wide open and the caption: "What do you mean I'm not covered!?" Other ads simply feature the testimonials of customers, like this one from Stephen Greene of Newcastle: "Our experience with a claim handled by Cheney Insurance this winter was outstanding! Prompt, thorough, and satisfactory in every respect!"
Dennis adds that automation has made it possible to track the agency's progress on a weekly basis. "We chart our progress on the wall in the conference room. Every week we know the number of policies sold, the number of policies canceled and why, the number of open claims and the number of closed claims. This data comes in the form of a series of reports run each Monday by the processor. During the budget review process, we can see exactly where we are in relation to where we want to be. We also concentrate on business segmentation and making certain that we have sufficient volume of the right type of business with each of our companies. This lets us refocus our efforts quickly to capture and place business where we need to."
On the claims side, there is an emphasis on closing claims quickly, and the progress can be seen on a weekly basis. "Where we have draft authority, we use it. Our people know that is our policy. It's good business and good public relations and definitely saves us and our company partners money over the long term. Quick settlement is something that we really work at. We honestly believe that our claims service exceeds that of any other agency in the state," Dennis says. "The testimonials support that."
Another marketing tool is the agency's conference room, an idea they borrowed from another Rough Notes cover agency, Obenchain Insurance of Twin Falls, Idaho. "We have a large conference room overlooking the river. We let the local realtor board use that room and promote it as something other organizations can use."
The agency also features a unique commission arrangement that includes rewards for exceeding goals, as well as deductions for failing to meet predetermined goals such as obtaining x-dates, asking for life leads, making personal visits and so on. "It's important to break the cycle of regular increases every year and instead provide an incentive program where everyone in the agency can make more based on performance," Dennis says.
As to the future, Dennis is already talking to competitors about purchasing books of business. "We don't believe that we can grow quickly just through sales alone." And in looking at acquisitions, "We are not opposed to buying in another part of the state," he says. "We also want to get the bankers in here and talk about banking and insurance. We're looking to develop affiliations now, mostly with small community banks."
The agency also is getting involved in consulting services to other independent agents. "We're very excited about helping other independent agents around the country over the phone and in person as they deal with the difficult prospects of change and implementing certain workflows and programs that have been successful for us. We have developed a fee schedule for these services that we will be marketing shortly," Dennis says.
He also is involved in attempting to take transactional filing outside the insurance industry. "We currently are talking to the Maine state government about implementing a modified version of this paper management tool in select government offices. The commissioner of finance sent two representatives to our office for an afternoon to discuss this recently. We hope this eventually will lead us to set up a separate company to handle this."
And, oh yes, the real estate business is still going strong. "We're in the process of adding four new people to sell real estate right now. The beauty of this expansion is that we feel we can bring all the workflows, technological advantages and team-based approach to customer service to the real estate industry."
Dennis concludes by pointing out that involvement in the local community and the insurance industry has been instrumental in the overall success in the agency.
"Lynne serves on the board at the Damariscotta Region Chamber of Commerce. Rosemary Campbell (personal lines account representative) and Brenda have both joined me in teaching art appreciation at the local grade school, the Great Salt Bay Community School. I also teach regular automobile insurance segments for the local driver education classes, and our other employees are involved in their communities in some way. Being part of the communities we live in has been a factor in our successes."
Turning to insurance industry involvement, this agency has been active in the IIAA, especially with the Young Agents Committee. "My involvement in this group has been a critical part of my personal and the agency's overall success during the past six years," Dennis says. "Old-fashioned networking has been very important--meeting peers, discussing issues and sharing ideas all have been important. Also, I've been visiting other agencies every chance I get. Whenever I step into another office I almost always pick up some small part about that office that I really like and it eventually comes back to our operation." *