By Thomas A. McCoy
Representatives from the 1997 Marketing Agency of the Year appear with Rough Notes magazine's Editor in Chief Tom McCoy (third from left). Powers Thomas, AH&T's recently retired chairman, receives the Marketing Agency of the Year award. Agency President Howard Armfield holds a poster-sized version of the July 1997 cover on which some of the AH&T executives appear.
Members of Rough Notes' Editorial Advisory Board include (front row, from left) Bob Bourdeau, Al Bourdeau Insurance Service; Henry Bechard, Jr., Bechard Insurance; Valarie Webster, The Flanders Group; and Lois Van Horn, Athens Insurance Center. Back row, from left are Rick Morgan, Automation Management Group; Max Zimmerman, CPCU, Zimmerman & Company; Dennis Pillsbury, Pillsbury Enterprises; Chris McVicker, The Flanders Group; Martin Van Horn, Athens Insurance Center; and Dennis Hilton, Cheney Insurance Agency.
AH&T executives with the Marketing Agency of the Year award include (seated) Kate Armfield, director, business development unit; John Love, assistant vice president and director, technology business unit; and David Schaefer, vice president of AH&T and managing partner for the firm's D&O practice. Back row, from left includes President Howard Armfield; Powers Thomas, recently retired chairman; and Alexander Green, executive vice president.
The readers of Rough Notes magazine have named Armfield, Harrison & Thomas of Leesburg, Virginia, (AH&T) the 1997 Marketing Agency of the Year. The agency, which specializes primarily in three commercial lines niches--technology, nonprofits and construction--was chosen from among the agencies featured on the cover of Rough Notes last year.
This year's voting was the heaviest of any of the nine years, and for the first time featured more votes cast for the winner via the Internet than via toll-free fax and mail.
"Aggressive, knowledgeable professionals" is how one reader characterized AH&T. Agents expressed admiration for AH&T's growth record in building a national and international client base.
Six executives from Armfield, Harrison & Thomas accepted the Marketing Agency of the Year award at a banquet held in their honor. Guests included two previous Agency of the Year winners, members of the Rough Notes editorial advisory board and other agency and company executives.
Technology titans
AH&T was founded 77 years ago, but what propelled the agency to this award is really a tale of the '90s. About 10 years ago the agency made a major commitment to the technology industry by establishing a subsidiary devoted to serving a variety of tech firms. Among its clients are software developers, hardware manufacturers, value added resellers, Internet service providers and members of the telecommunications industry.
AH&T is the coordinating broker for a national property/casualty program, written through USF&G, for members of the Information Technology Association of America (ITAA). On this program AH&T copartners with agencies in other parts of the U.S., providing coverage for their technology clients. ITAA has about 500 direct members, but members of CRITA (Council of Regional Information Technology Association) members can also access the program, bringing the eligibility to around 15,000 companies.
Walt Gdowski, chairman of The Rough Notes Company, Inc., commends AH&T for its focus on clients' needs.
AH&T has represented both St. Paul and USF&G, and when St. Paul's acquisition of USF&G takes place, "We'll be among the three largest brokers for St. Paul Technology," says John Love, assistant vice president and director of the agency's technology business unit.
In the fast-growing technology realm this specialization has provided an important sales edge. As is explained on the AH&T home page on the Internet, "Many technology companies are growing so fast they don't have the time to 'teach' their service providers--e.g., lawyers, accountants, bankers or insurance brokers." AH&T would rather be the party doing the educating--alerting tech clients to developing exposures."
"When some of our first tech clients began preparing for the initial public offerings (IPOs) of their companies in the late '80s, they had an increased need for directors and officers coverage," notes David Schaefer, CPCU, RPLU, vice president of AH&T and managing partner for the firm's D&O practice. "We were already strong in errors and omissions coverages, but we stepped up our D&O capabilities to be better prepared for the IPOs. Two of our employees have obtained the RPLU designation as a way of helping support the focus on the professional liability exposures of our clients."
As a result of AH&T's commitment to the directors and officers market, the firm now ranks eighth nationally in D&O premium written in the most recent Watson Wyatt D&O Liability Survey.
Life in the fast lane
Because of the rapid growth of tech firms and soaring values on Wall Street, AH&T's client list has included some dazzling tales of growth. "One that was interesting to take public," Schaefer recalls, "because it was such a hot IPO was UUNet Technology, the largest Internet access company in the world. They are now owned by WorldCom and we no longer work with them, but that one proved challenging because of the immense speed with which they were moving. They were sold first to MFS Communications which, in turn, was acquired by WorldCom (the latter firm being the leading suitor in the competition to acquire MCI).
"When UUNet went public the stock opened at 14. They sold the company at about 90, and when MFS was acquired by WorldCom the price was doubled again, so the value of a share of UUNet when it was sold to WorldCom was about $180. All that was in a period of less than two years."
Having set up the agency's technology unit in 1988 and tasted the fruits of specialization, AH&T began looking around its own back yard in the early '90s for another specialization opportunity, based on the types of accounts the agency was already writing. "Construction didn't look particularly good at the time," recalls Alexander Green, AH&T's executive vice president, "although we knew that would improve since it was cyclical. We decided that since the Washington, D.C. area hosts the majority of national professional and trade association headquarters, that would be our next major area of focus."
AH&T began to build its book of nonprofit business working through associations. Today the agency's nonprofits business unit "is probably the third largest writer of nonprofit businesses in the country now," Schaefer says. "It writes over half its business on a broker of record letter."
In establishing each of its priority business units--technology, nonprofits and construction--the agency invested heavily at the beginning in advertising, seminars and direct mail. It also uses less expensive ways to establish identity--letting each unit have its own business cards, Web pages, name and letterhead.
Just another niche
Although its future is closely tied to these commercial lines niches, AH&T has found a way to write other lines as well, including personal lines, life and benefits business. For personal lines, the agency has joined Consumer Insurance Services of America (CISA), the Massachusetts-based group which offers the GroupAdvantage personal lines program through employers. (See article on CISA on page 48).
"Personal lines through the work place is becoming a niche," says Howard Armfield, agency president. "As people have less and less time to deal with insurance and have to do it on evenings and Saturdays, they really like when an employer will allow them, on company time, to talk to an insurance professional about their personal insurance.
"We use our Preferred Client Service Division, which includes GroupAdvantage, to handle personal insurance. And it includes more than just property/casualty; we also provide disability, long term care, life insurance and mutual funds."
Four years ago the agency also established an employee benefits department that offers group benefits such as group life and health and 401(k) plans.
The internal work culture at AH&T is also an important part of the success of the agency, according to John Love. "The management team allows people to do their best. There aren't a lot of autocratic, top-down management decisions that are forced on people. Basically, management is trying to create an environment where people can achieve whatever they are capable of. That's a very energizing environment for producers, and support staff."
Such an environment is perhaps most easily noticed by someone who comes to AH&T from a completely different type of firm. "The most recent producer we hired was one who had just left a big brokerage firm and was ready to go out on his own," says Kate Armfield, who directs the agency's Business Development Unit. "However, he met with us and saw how our producers are encouraged to be their own entrepreneurs--whatever they need to do to get the job done. That was so attractive to him that he decided to come with us."
The agency has an Employee Stock Ownership Plan (ESOP), the largest agency shareholder, which, Howard Armfield says, "has helped open lines of communication" among the firm's 50 employees. "Before we set up the ESOP four years ago, like most agencies we didn't share a lot of financial information with employees. Now we share a lot. They seem to be interested in it and it helps them understand the workings of the agency and why flat management style is important to agency profitability."
All the members of AH&T's management team have well-developed business skills, some of those skills having been honed in other industries. Two principals are former bankers, one is a CPA and another has experience on Capitol Hill. What unifies all the AH&T principals is an entrepreneurial spirit which is closely akin to that of many of the clients they serve. "In many ways we're an insurance agency run like a technology company," says Love.
Powers Thomas, AH&T's recently retired chairman, sees bright prospects for the firm's future. "We envision having a national presence for our mature priority business units," Thomas explains. "One strategy will be to build relationships with agencies in other geographic territories. We are in a perpetual search mode for other high-performing agencies and producers who have an interest in being part of a winning formula."
Like the companies it serves, AH&T looks to the next century as its coming out party. *
©COPYRIGHT: The Rough Notes Magazine, 1998