TECHNOLOGY, NOT-FOR-PROFIT
AND CONSTRUCTION FIRMS
RELY ON AH&T EXPERTISE
Targeted markets are the trademark of Leesburg, Virginia, agency
By Robert L. Stewart
Gathering to coordinate appointment calendars for the week are (left to right) Greg Grimes, Lisa Chambers, Jane Earles and Tom Taylor.
Property-casualty insurance companies have, for the most part, embraced the concept of niche marketing. Independent agencies, largely out of necessity, have followed suit, targeting certain exposures that their insurance carriers dictate.
However, some 10 years ago, Armfield, Harrison & Thomas, Inc. (AH&T), the Leesburg, Virginia-based independent insurance agency, recognized the importance of niche marketing in a big way and that the dictates do not come from carriers but rather from their own expertise and their clients' needs.
"Planning our future on the whims of our carriers would be like building a castle on a foundation of sand," says H. Powers Thomas, chairman of AH&T. Today, their distinguishing trademark is a focus driven by their own clients' needs, and a concentration on three targeted industry segments.
The oldest and largest niche is the technology unit. AH&T "Technology Brokers" has secured a dominant position as a leading authority in providing state-of-the-art protection for technology businesses. Non-profit and construction organizations are the other two targeted segments to which there are dedicated agency personnel, an advertising budget and annual seminars.
"These three market segments capture a huge slice of the flourishing businesses in the greater Washington Metropolitan area, and nationally," says Thomas. "The exploding growth in technological and telecommunications companies has provided us with a market that has benefited our firm tremendously," he continues, adding that the firm has a producer training program that is "unmatched."
Thomas goes on to explain that AH&T's staff is one of the firm's greatest strengths. In addition to Thomas, who is a graduate of Randolph-Macon College with a B.A. degree in political science and philosophy, there is the management team he has assembled.
Howard Armfield, CPCU, the firm's president, is also a CPA and brings a sharp financial focus to the business. He spearheaded the agency's drive to become an ESOP company. Armfield states that "the ESOP is a great empowerment tool for all of our employees who are now also owners..." and he adds that the ESOP is also an important strategic asset for the company as it seeks acquisition candidates for more growth."
Alex Green, CPCU, is executive vice president and manages carrier relationships and commercial lines. Green, a former banker, constantly is working on refining the business model for the firm. "Last year, for example, we reworked our mission statement to include the phrase 'Heroic Service' which we steadfastly believe in and constantly strive to deliver to our client," says Green.
David Schaefer is vice president of AH&T and was instrumental in the formation of the first two targeted "priority business units," or PBUs, and is now responsible for two new PBUs. His expertise for technology companies includes products liability, electronic errors & omissions and directors and officers liability.
John Love, CPCU, is assistant vice president and currently the director of the agency's technology PBU. Says Love: "With today's rapidly changing technology industry, it is certainly a challenge to keep abreast of all of the latest developments. But our people focus on the industry and its special needs; consequently, we've taken on the look and feel of a technology company. For example, we have our own Web site and the ability to communicate via that site."
Kate Kaiser is director of the Business Development Unit at AH&T and manages the sales support staff. She says that the initial marketing stages for AH&T were a challenge. "We combed through technology publications and attended seminars. Then we began conducting our own seminars in a very special way. We contacted our clients in the technology industry and asked them what issues were important enough to be discussed. Then we contacted nationally recognized experts to be speakers about those issues." Powers Thomas adds that John Love has been the agency spokesman at many of their seminars and has extraordinary public speaking and presentation skills.
Today, AH&T boasts that it has provided insurance coverage and risk management expertise for a broad spectrum of clients including software developers, hardware manufacturers and assemblers, value added resellers (VARs), system integrators and installers, telecommunications systems developers and providers, Internet service providers, aerospace companies (including launch systems and satellite systems), federal and state government contractors, geographic information systems (GIS) and contractors. AH&T Technology Broker's clients are located in 47 states and 38 countries.
Insurance carriers AH&T works with include: St. Paul Insurance Cos., Chubb, Zurich-American Insurance Group, Hartford, USF&G, Kemper, CNA, Atlantic Mutual, The Maryland Group, Travelers/Aetna and Northbrook.
Driven by its technology clientele, AH&T also has intensified its focus on the directors and officers liability market, with substantial success. Much of this success has come from providing D&O liability coverage for the initial public offerings of many technology companies.
Watson Wyatt Worldwide's recent report on the leading D&O liability brokerage firms ranked AH&T ninth among the top 20 D&O brokers. The survey was based purely on the number of accounts for which respondents were the primary D&O broker. These rankings are intended to provide a good general indication of leadership in the market. The survey showed that the top 20 brokerage firms comprise more than 80% of the market based on the number of retail accounts.
Says Powers Thomas: "Even though technology companies exist in a dynamic environment, where change is constant, they sometimes remain static in their management policies and procedures. Attracting and retaining top management is certainly key to the success of many of the companies on the Fast 500. But protecting those executives should things go wrong is equally important and too frequently overlooked.
"The insurance available--directors and officers liability, employment practices, fiduciary liability, etc.--is just part of the bigger picture of risk management," adds Armfield. "Directing risk management means creating and supporting a management environment in which individuals concerned are informed of their responsibilities, supported in their efforts and protected when their best efforts aren't good enough. The last place most executives wish to find themselves is in court, but it is a fact of life for technology company directors and officers that they are high profile targets for a variety of litigation."
Therefore, as part of its services to clients, AH&T focuses not only on insurance coverages, but in an outsourced risk management capacity as well.
The AH&T success story is not all that common in the insurance agency business. But the message AH&T brings home is all too clear. Independent agencies that want to control their own destiny need to choose markets carefully, then focus on the needs of those markets so thoroughly that they actually become partners to the success of their clients' business. *