The Schultheis Agency team pulls together to achieve impressive results. From left, Mary Alice Fisher; Kenan Schultheis; Brett Schultheis; Alton "Bud" Schultheis; Frank Schultheis and Michael Weissmann.
When the Schultheis Insurance Agency started doing business in 1944, it was as a second career for Frank M. Schultheis, who had been a produce salesman up to that point. And, with typical Midwestern frugality, Frank used the tools of that trade to help out with his new one--the apple crates became filing cabinets--and he operated out of his house.
Today, the apple crates have been replaced with computers and the agency has moved from Frank's house to a remodeled facility in the center of Evansville, Indiana. As Frank J. Schultheis, today's president and son of the founder, explains, the current location was a house on the outskirts of town when it was purchased in 1954 as the home for the agency. It has been remodeled several times since then and now rests comfortably in the center of town, thanks to a growth spurt that saw Evansville spread out and surround the Schultheis location. In addition, the agency also has some 20 other locations that are either branches of Schultheis Insurance Agency or affiliate agencies--Affordable Insurance Agency, Hoosierland Insurance Agency and Salem Insurance Agency.
Frank J. joined the agency in 1961 after graduation. His brother, Alton (Bud) Schultheis, corporate secretary of the agency, has been with the agency since 1958 except for a period of time while serving in the military. Frank's sister, Mary Alice Fisher, joined in 1978. She is assistant secretary. When Frank joined the agency there were only one or two other people working in the agency. Today, the agency has five principals, 35 producers and a support staff of 68 people, 20 of whom are licensed. And another generation has entered the ranks--Brett and Kenan Schultheis both joined the agency in 1982. They currently are vice presidents. Michael Weissmann, Frank's son-in-law, joined in 1980, and is also a vice president.
Brothers Bud (left) and Frank Schultheis represent the second generation of family involved in the agency's leadership.
The Schultheis Agency (not including affiliate agencies) had premium volume of $39.9 million in 1997 and served some 25,000 customers. This is an increase from $36.6 million at the end of 1996 and 23,000 customers. Hoosierland Insurance Agency (which is owned by Schultheis along with a minority partner) has volume of about $4 million; Salem (where Schultheis has several other partners) has about $13 million in volume; and Affordable (a nonstandard auto agency where Todd Schultheis serves as president) has volume of $12 million.
The fact that Schultheis has 25,000 customers in a metropolitan area with a population of around 250,000 is clear evidence of its success at marketing. It also means that, unlike many large agencies, Schultheis writes a significant amount of personal lines business. Indeed, the agency split is 55% commercial lines and 45% personal lines.
Advertising and community involvement
Two of the key ingredients in the success of Schultheis Insurance Agency are advertising and community involvement. The agency has advertised regularly on both radio and cable TV for the past seven or eight years. The advertisements are principally image ads that feature safety tips geared to the season such as "Watch out for kids now that school is out." Each ad features a catchy jingle that has remained constant during this decade of the '90s.
This consistent reiteration of theme has resulted in excellent name recognition for the agency. In fact, a 1994 TOMA (Top of Mind Awareness) marketing survey in Vanderburgh, Warrick and Posey Counties found that only State Farm had better name recognition. Schultheis beat out Allstate, Farm Bureau and all other independent insurance agencies in the area.
Community involvement adds to the name recognition enjoyed by the agency, but more important, Frank says, it "serves as a means for us to give back to our community." Management and employees participate in numerous civic organizations, including Civitan, Kiwanis, Rotary, Jaycees, Masons, Girl Scouts, Boy Scouts, Public Education Foundation, Leadership Evansville and many others. In addition, the agency participates in a number of community activities, including serving as a rest stop for one of the Walkathons designed to raise money for MS research and participating in Red Cross Blood Drives and in the Festival of Lights.
The agency also combines media exposure with community involvement three or four times a year, when it does a remote radio program from its office. They always promote a charity along with the program. This May, it was the Humane Society animal shelter. Schultheis paid for spaying or neutering if people adopted an animal. Frank also is involved with a homeless shelter in town.
Another "awareness opportunity," as well as a selling opportunity, is the agency's participation at the Tri-State Home Show held in Evansville. For the past four years, Schultheis Insurance has purchased an exhibit booth at the show. The exhibition attracts individuals from southern Indiana, southeastern Illinois and western Kentucky, who are preparing to build or remodel their homes. Although the man-hours needed to staff the booth for the three-day show are high, Frank says "the leads generated far outweigh the costs and it is an excellent opportunity for staff members to meet both prospective and current clients to discuss their plans and provide advice concerning insurance needed for the project." In addition, the show offers Schultheis commercial lines people an opportunity to talk to the building supply and contractor exhibitors working at the show.
Schultheis also is involved in expanding its personal lines book through mass merchandising. The agency has two programs that target individuals in specific professional areas with American States and with Citizens Insurance. The Employee Advantage Program provided by Schultheis is a group personal lines program that uses IDS software. The program is a payroll deduct plan and, because of the IDS connection, Schultheis is able to offer it with any of five different insurers.
Workers comp expertise
In addition to the networking opportunities afforded by the various name recognition efforts and community involvement, Schultheis has developed an exceptional expertise in workers compensation as a means of attracting and retaining commercial lines clients. The agency is a co-founder and co-owner of Employers Security Insurance Co., Indianapolis, a workers compensation insurer set up in 1992 when markets for that coverage were hard to find. The company writes principally in Indiana, but also is licensed to write business in Illinois, Kentucky and Michigan.
Kenan and Brett Schultheis represent the third generation involved in the agency. They are joined here by Mike Weissmann.
"During the hard market, we learned a lot about workers compensation and about finding innovative ways to put programs together," Frank explains. "We really became immersed in the coverage so we could help our clients obtain coverage and reduce their losses. Employers Security was established to provide a much needed market and to take advantage of opportunities that existed because many insurers were turning away a lot of good risks as well as bad."
Of course, as everyone knows, the situation in workers compensation is markedly different today. So Schultheis has taken its workers compensation expertise to another level by forming a new company, Safety Management, to provide OSHA compliance consultation. Safety Management works on a fee basis with reduced fee structures given to agency clients.
The combination of expertise, name recognition and community involvement has helped Schultheis grow internally from referrals, cold calls and mass marketing. However, it also has been active in acquiring agencies in order to expand geographically.
The first major acquisition occurred in 1986, when Schultheis acquired an agency with volume around $2 million. "When we purchase an agency, we leave the sales and support staff in place. If the agency has strong name recognition in its marketing area, we don't change the name. We understand the importance of that recognition.
"The principal change is that accounting functions are centralized in Evansville so support staff can concentrate on customer service, account rounding and new growth. The sales staff has the advantage of additional company markets and the underwriting capabilities provided from the Evansville office."
Automation
The main office in Evansville, and all branch offices, are linked electronically through the Delphi Information Systems agency management product--Infinity. The system includes invoicing, accounting, policy coverage details, receivables tracking, diary, word processing, electronic mail, electronic filing, desktop faxing, integrated personal lines rating, marketing letters, claims, and management reports. The agency also uses LANs and WANs for third-party software. Approximately 90% of all personal lines business is downloaded/uploaded through company interface projects. All accounting functions are centralized in the Evansville office.
And automation plays a key role in service. In addition to traditional switchboard operations, the system offers 24-hour service through a special voice mailbox that is tied to a pager. An on-call staff member returns the call after hours and on weekends. That staffer can access the policyholder database from home using a laptop or in-home system. Thus, the client gets a prompt response at a time when service traditionally is difficult at best and non-existent at worst.
Company partners
Schultheis does much of the underwriting for its personal lines accounts. In fact, that is an expectation of Cincinnati Insurance, one of its carriers. "Cincinnati lets you operate almost like a company. We process their policies and do the underwriting. But they also expect results." The close relationship that Schultheis has with its companies is shown by the fact that Cincinnati has four adjusters working out of the Schultheis office in Evansville and Frank is a director and serves on the company's executive committee. American States has an underwriter located in the Evansville office. "We truly are partners with our companies," Frank explains. "In some cases (mentioned above), we actually provide them with office space for branch underwriters or adjusters. And our centralization effort has made us more attractive to insurers. Even though we actually are four different agencies with a total of 20 branches, the insurance company only needs to call on the Evansville office to achieve its communication and marketing impact."
Employee partners
Of course, none of this would work for very long if Schultheis didn't have a strong staff of committed individuals. "We have a lot of people working here, but we still try to operate as a family," Frank says. "I tell people when I hire them that I'm a coach. It's my belief that everyone wants to do well and it's our job to furnish them with the tools to do so and make a good living and be happy while they're doing so. We want each employee to feel like he or she is really part of this agency."
To promote this atmosphere of camaraderie and involvement, Schultheis has cookouts in the summer on property behind the agency that the agency purchased and on which it built a gazebo. The agency also has company picnics, a Christmas party and so on. But each of these events is planned not by management, but by the employees themselves. "We try to involve them as much as possible," Frank continues, adding that it's key to develop an atmosphere of trust and individual responsibility in an agency that has a lot of offices, some of which are more than 50 miles away.
"We don't supervise as strongly as a lot of agencies. We work on a trust basis. It goes back to my basic philosophy that people want to do well if given the opportunity."
"Our customers also are viewed as partners, whether they are small personal lines clients or a large commercial enterprise. (The agency's list of commercial clients ranges from the small "mom and pop" business to the large sophisticated insured with a $250,000 S.I.R.) A lot of our personal lines business is agency billed," Frank continues. "People will come in to the agency to pay that bill or just to discuss insurance or visit their agent to discuss insurance. We've spent a lot of money to make this a friendly environment. The building is in a nice shopping center area with attractive landscaping. We have flowers and other decorations all around the office. There are private offices where people can go to discuss their insurance needs. We probably have 30 or 40 people drop in to our office every day."
In addition, the agency has an open house every year that brings in around 300 to 400 people. "We also try to communicate with our customers regularly through personal letters."
In sum, Frank says, "the strength of our agency is the partnership we have with each other and with our insurance carriers and customers. We get involved in a positive way with all of them." *
--Frank J. Schultheis
©COPYRIGHT: The Rough Notes Magazine, 1998