The agency's commercial lines CSRs are Pam Massie (seated), Heather Smith (standing left) and Vicki Irwin.
By Dennis Pillsbury
The Wiseman Agency, Inc., of Gallipolis, Ohio, is proof positive that there is still room in the independent agency system for small, family-run agencies. And it has done so by competing successfully against larger agencies and the big brokers. "We've succeeded by developing strong long-term relationships with our clients based on mutual trust," says Tom Wiseman, president. "That's almost more important than the coverage itself," he adds, noting that "nearly all of our business comes to us because of the relationship we have with our current clients. We do very little advertising or cold calling. Most of our business comes to us through referrals."
The Wiseman Agency was founded in 1928 by Tom's grandfather, Ernest Wiseman, who started out in life insurance after being convinced by a man who sold him a life insurance policy that he could do the same thing. At the time, he was a teacher, coach and headmaster at Cadmus High making very little money and starting to think about a family. It was summer and he needed extra cash. It turned out that he was pretty good at it and the rest, as they say, is history. He started to dabble in the property/casualty side of the business, left teaching to work at it full time and brought in a partner. It was not an unusual progression.
In 1955, Ernest's son Harold joined his father after graduating from Ohio University and serving two years in the army. He started running the agency in 1961.
Tom joined the agency in 1980--the year in which both his father and grandfather died. His brother-in-law, Gary Roach, came in 1984 and serves as vice president. Tom's sister, Lori Waugh, has been with the agency since the late '70s and currently serves as the agency's treasurer; his mother, Shirleen Wiseman, is the agency's secretary. "This is still a family business in small town America. Many people don't realize that agencies like this still exist," Tom says. "And we're successful," he adds proudly. All told, there are 17 people in the agency; five are producers.
One measure of the agency's success is premium growth. In 1980, volume at the agency was around $1.3 million. Today, the agency writes some $8 million in premium volume, approximately $5 million commercial and $3 million personal. That's not bad in a town of 5,000 people and in a state where workers compensation is handled by a monopolistic state fund.
Another measure of success is customer satisfaction. The Wiseman Agency has a very high retention rate, especially among its commercial lines customers. One not quite so typical customer is Bob Evans Farms--a company that has been with The Wiseman Agency since its incorporation. "My father first handled that account," Tom says. "It's grown and we've grown with it and they've stuck with us through thick and thin." The account now is spread out over 28 states and The Wiseman Agency has gotten licensed in each of those states.
Although the agency writes a number of fairly large commercial lines accounts, they are the exception rather than the rule. "We haven't specialized the way a lot of agencies have," Tom says. "We do a lot of Main Street BOP type business. We've developed a good reputation for handling business accounts and providing the service that exemplifies our emphasis on relationships." And in a small town, that emphasis is especially important. Everybody knows everybody.
"We've concentrated on being involved in civic and business organizations." Gary currently is president of the Chamber of Commerce. Tom is president of the Community Improvement Corporation and is a past president of the Chamber. Mark Curry, who runs the Financial Planning division, is president of the Ohio Valley Visitors Center. The agency also is heavily involved in insurance organizations, including the Big "I." "By doing these types of things, we present ourselves in a more professional manner," Tom says. "We emphasize continuing education for all our people. Our involvement in civic and business organizations as well as our emphasis on education really helps with our clients; it adds a little luster to the resume."
The sustained soft market has had a very definite impact on The Wiseman Agency, as it has on most agencies. "In the last 10 years, growth has come primarily from new accounts and in the personal lines arena," Gary Roach points out. Personal lines in the last decade has grown from around $1 million to its current level of about $3 million. Much of this has been the result of account selling. "It's very difficult to make money on a monoline basis," Gary adds, pointing out, however, that "we don't reject that business out of hand like some agencies. Our attitude is that if we get a monoline customer, we'll have a shot at the other stuff sometime down the road. We've also had very good luck in the nonstandard personal lines. We've been able to pick up a lot of business because we have a good nonstandard market."
The soft market, coupled with company reductions in commission levels, had another impact on the way The Wiseman Agency did business. "We've been looking more for fee-based income from our clients," Gary says. "We set up a separate contract and then do the insurance products at no commission. Of course, this means that we have to do more risk management and loss control activities, but we were already working in that direction anyway. We'll do a self-insured analysis to help them determine if that's something they might want to consider. We do have clients who are self-insured, primarily for comp. We arrange for the excess coverage and help them find a claims administrator. Actually, these activities have helped to further cement our relationship with our clients and to differentiate ourselves from the competition."
Somewhere between 25% and 30% of the agency's income is coming from fees and they expect that to increase. "This is probably the wave of the future," Tom predicts.
Another initiative taken by the agency was the Eagle Insurance Group. The Wiseman Agency is a founding member of Eagle, a loose cluster that was set up to develop markets. "We try to keep at least $1 million in premium with each of our markets," Gary says. "But, in some cases, most of the business we write may not fit with what a particular insurance company is looking for. We didn't want to lose companies that were good markets for some of our clients but realized there was no way that our agency alone could provide them with sufficient volume. The Eagle Group has helped there. We may only have one or two accounts with a particular company, but the other members of the group make up the difference." There are seven member agencies in the group, which was set up as a separate corporation so the insurer only has to deal with one agency contract.
The Wiseman Agency is fully automated with the Applied System. "We have a fully loaded database that we use for customer service. We also have upload and download with our companies," Gary says.
He concludes by saying that "we have never found a point where we cannot be competitive. We have two sets of competitors. One is the other independent agents and the direct writing agents in the area. There are about eight in our trading area. And then there are the national brokers who are after the larger accounts. But we've built solid relationships where we tell our clients everything. We let them know what they're getting for the fees or premiums they pay and they understand that you get what you pay for. The business people are pretty sophisticated and have seen the vagaries of the insurance market. They understand low-balling and, in most cases, won't jump because of price only. They really appreciate the fact that we document our time to them and encourage them to ask questions. They really look at this as a long-term relationship."
The Wiseman Agency is proof that small agencies don't necessarily have to sell out to the big guys or the banks. With the right tools and work ethic, a small town, family agency can, as Tom says, "compete against anyone." The growing number of atrabilious prognosticators predicting the death knell of the small agency may want to take a look at The Wiseman Agency and revise their forecast.
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