By Ron Peters
Standing (left to right): InsGroup member Scott Addis, CEO of Garno & Addis in Philadelphia and Mark McCrary, InsGroup's manager of agency programs. Seated (left to right): InsGroup member Richard Young of Insurance One in Rockville, Maryland and Ron Peters, executive director of InsGroup.
When agents are looking for an insurance program to better serve the needs of clients, the need for creative solutions is paramount. That was the situation which eight agency members of InsGroup faced about a year ago. They realized that the needs of a number of their clients could best be served through the use of an alternative insurance mechanism.
Since InsGroup is owned by E.W. Blanch, and Discover Re is a large client of Blanch, these eight agencies were put in contact with Discover Re to explore the potential of an agency owned captive. After substantial task force work, the captive capability became a reality, jointly owned by the eight members and Discover Re, accepting its first submission in April 1997.
This heterogeneous captive, SASI (Special Agent Special Insured), is now viewed as a strong vehicle for members to achieve the service needs of their clients as well as provide them with another "arrow in their quiver" to compete against the national brokerage houses.
"SASI provides a double benefit to the InsGroup members," says Bob Phelan, president of The Litchfield Group, Torrington, Connecticut, who served as the task force leader. "Most importantly, it gives then a unique, and needed, product to open doors with new clients in a very competitive marketplace. Secondly, by participating in the underwriting results and investment income on the SASI business volume, agencies can realize a positive impact on their revenue line. As a member benefit, SASI is second to none."
The InsGroup is a nationwide network of more than 60 independent property/casualty agencies located in more than 150 cities throughout the United States. Together they handle more than $2 billion in annual premiums and employ over 3,000 people. They also have international reach by virtue of InsGroup's affiliation with E.W. Blanch Holdings, Inc. (EWB), which provides integrated risk management and reinsurance services as well as wholesaling. Swire/Blanch, an EWB subsidiary, supports all InsGroup member needs outside the United States--either by direct involvement or by facilitating an entry into the International Broker Network (IBN).
InsGroup functions as the link between these independent agencies, facilitating the exchange of ideas, working to enable revenue growth and operating efficiencies, and striving to help each member offer the highest level of customer service possible.
In the last nine years, seven InsGroup agency members have been recognized on the cover of Rough Notes as the magazine's Marketing Agency of the Month. Travis Hair, executive vice president of Schaefer-Smith-Ankeney Insurance Agency in Phoenix, Arizona, one of the firms named a Rough Notes Marketing Agency of the Month, says, "The ability to call on our fellow InsGroup agents as we compete on multi-state accounts has leveled the playing field as we compete against the national brokerage houses."
"We have worked closely with our fellow members and created both personal and business relationships that are invaluable as we continue to grow our business," says Hair, whose agency has been a member of InsGroup since 1992. "With InsGroup evolving from a management organization to more of a marketing organization since it was acquired by E.W. Blanch, we continue to be excited about the opportunity they can bring."
Richard Young (above), president of Insurance One in Rockville, Maryland, says the benefits to InsGroup membership are two-fold: the chance to discuss common problems with fellow members and the market assistance the group can provide.
The InsGroup was started as an association of independent agencies over 25 years ago by an agency owner in Nebraska. His belief was that much more could be achieved in conjunction with other like-minded, quality agencies. He conceived InsGroup as being a group of independent agencies across the country working together to develop their agencies by the constant sharing of ideas and experiences. The realization of this opportunity was fostered both on a day-to-day basis and through conferences held a number of times a year.
Over time, a number of Alliance Partners became members with InsGroup, to provide management consultant support in the areas of systems, personnel development, risk management techniques, sales support, and financial evaluations.
A natural second step was to pursue opportunities with carriers whereby the combined size and geographic spread of the agencies could be utilized to support marketing efforts.
While varying levels of success were achieved in these efforts, they didn't reach their full long-term potential.
During the late '80s and early '90s InsGroup members benefited from the management and re-engineering concepts of the time, as they continued to improve the efficiency of their firms. Agency buyouts and other market activity proved the worth of the efficiencies which InsGroup members had put in place.
By the mid-'90s it became clear that for InsGroup to continue to carry out its objectives it would need additional capital infusion. This ultimately resulted in the sale of the InsGroup Service Company to E.W. Blanch Holdings, Inc., in early 1996.
The future
The purchase of InsGroup by Blanch has brought a number of advantages to both parties. For one thing, it provides InsGroup members with the opportunity to work with various EWB units to identify high potential market segments, develop programs (including the reinsurance placement) and distribute them on a worldwide basis.
Agencies that are part of InsGroup can create and be a part of innovative and profitable programs by working with other members and InsGroup staff to identify new marketing opportunities. This can occur in many forms: a national program, a specific geographic program or even an individual agency program. Within the last nine months InsGroup/E.W. Blanch has helped initiate all three types of programs.
One new national opportunity, started in mid-'97, involved a partnering with the Atlantic Mutual Insurance Company. Those members availing themselves of this opportunity received a $4,300 average incentive commission check for the first quarter the program was active. While this amount may seem small, for these members, it essentially paid their yearly dues.
Scott Addis knows the value of networking with fellow InsGroup members. His agency was the winner of the 1997 Customer Excellence Award presented by the Greater Philadelphia Chamber of Commerce.
The InsGroup recently facilitated a market relationship between one of its members, The Allen Insurance Group/Marion A. Agency of Fort Valley, Georgia, and Valley Insurance Company, a partner carrier which was trying to expand geographically. It is expected to achieve the goals of both organizations. Denny Wilson, senior vice president of The Allen Group, said, "In a short six-month's time frame we have experienced a multi-faceted support environment from the EWB/InsGroup relationship." Wilson's agency has availed itself of the Alternative Risk Financing program and the new standard market focused support efforts brought by the Atlantic Mutual relationship.
The Allen Agency also successfully placed coverage for two separate risks in Mexico receiving assistance from the Swire/Blanch connection to InsGroup. "We believe the EWB/InsGroup relationship will continue to be a big assist in our ability to expand our marketing efforts and grow our enterprise," Wilson said.
The ideal generation of a program starts from the needs of an individual agency. Often if it is very difficult to receive acceptance, or even recognition of need/potential, by a carrier. InsGroup member Kiely-Hines and Associates of Louisville, Kentucky, a former Rough Notes Marketing Agency of the Month, experienced this acceptability void for a number of years. Shortly after InsGroup was purchased by EWB, Kiely-Hines and Associates brought forward a program and requested the assistance of EWB in establishing the program and finding a primary carrier. Through the joint efforts of Kiely-Hines and the EWB Program Services unit, a carrier was identified, solicited and upon review decided to underwrite the program.
Efforts and expected results of this nature are at the heart of the new InsGroup member/EWB relationship. E.W. Blanch conducts business with some 300 clients, thus affording a strong base of opportunities for members extending beyond the normal property/casualty lines into life/health and alternative mechanisms. For the agency desiring to grow by availing itself of multiple means of revenue generation, this alignment with EWB brings strong possibilities.
Through InsGroup, each member is able to capitalize on the collective knowledge, experience, and resources of the total network--a focus that dates to the founding tenet of InsGroup. This allows members to offer clients extended service beyond their own geographic area. Most important, the collective power of the InsGroup network enables members to offer their clients outstanding service and expertise not available from other agencies, as well as to be able to compete against the national brokerage houses.
InsGroup member Scott Addis, CEO, Garno & Addis, Philadelphia, Pennsylvania, says, "The true value of membership in InsGroup to our agency is the confidence in the technical resources and quality of product knowledge available at a moment's notice within our network." Garno & Addis was the recipient of the Greater Philadelphia Chamber of Commerce's 1997 Customer Excellence Award, and Scott believes that the InsGroup network was a most valued partner in helping them to respond to client needs and provide valued service.
Membership
Membership in InsGroup involves a thorough application process designed to maintain the high standards of professionalism, management excellence, and sharing of knowledge that historically has existed. The average agency produces about $30 million in gross written premium and has approximately 35 employees. Membership is neither open to everyone nor automatic. Before membership is offered, the criteria to be evaluated include: sales aggressiveness, industry reputation, financial soundness and commercial orientation.
A one-time installation fee and monthly-dues structure based on agency revenue(s) can be considered an investment which can be recouped by participation in the programs available and/or by capitalizing on the shared experiences and opportunities resident in this elite network.
Richard Young, president of Insurance One in Rockville, Maryland, one of the newest members of InsGroup, said, "The investment in membership was modest compared to the potential gain. Through exposure to our peers we have been able to share ideas and discuss problems and resultant solutions. We also are getting increasing exposure to additional markets, thus enabling us to broaden our marketing efforts."
The major goals of InsGroup are to increase both our membership base and the number of revenue generating opportunities our members can access. Accomplishment of these goals will ensure that we help our members grow their enterprise, provide additional service to EWB's primary carrier clients and support the growth goals of our parent corporation.
We invite inquiries both from independent agencies which generally meet the size and traits previously identified, and insurance carriers interested in associating themselves with InsGroup. Please contact either Ron Peters, executive director of InsGroup, at (302) 765-6004 or Mark McCrary, manager of Agency and Company Programs, at (302) 765-6016. *
©COPYRIGHT: The Rough Notes Magazine, 1998