Each principal of RKF&K regularly evaluates his own strengths and weaknessess as well as those of the other partners. From left are: Ronald R. Lensing, executive vice president; Tad Krug, chairman and CEO; and Timothy P. Farrell, president.
Ramsey, Krug, Farrell & Lensing (RKF&L) of Little Rock, Arkansas, has grown to become one of the largest agencies in Arkansas since its founding in 1980 with only seven employees and $241,000 in revenue. Today the agency has more than 60 employees and total revenues in excess of $6 million.
The agency actually traces its roots to 1932 when Herschel Lewis and Raymond Norwood founded the Lewis and Norwood Co., a managing general agency. A retail division--Ramsey, Olberts, Krug and Farrell--was formed in 1976, "but we really didn't start until we got out of the MGA business," says Tad Krug, chairman and chief executive officer of RKF&L. The MGA was sold to Cigna in l980, and the retail company got its current name when Mr. Olberts joined Cigna. Krug, Tim Farrell and Tom Ramsey, who was semi-retired, came over from the MGA. Ron Lensing joined the retail agency in 1979.
From the start, RKF&L was interested in establishing an agency where each individual at the agency enjoyed what he/she was doing. For the three owners, that meant identifying their own strengths and weaknesses. "We meet every quarter and talk about the previous quarter and our plans for the next one," Tad says. "When we first started out, we sat down and wrote down our own strengths and weaknesses and what we felt the strengths and weaknesses of our partners were. It was illuminating. We still do this every quarter to make certain that we stay focused on those areas where we are most effective. It helped us define responsibilities and not manage by committee.
"Tim, Ron and I were very lucky in that we have great synergy. We don't overlap much except that we all sell. Tim does the operations and all the numbers. Ron is the sales manager. I mostly sell insurance and deal with the companies. It's worked really well."
That same recognition of strengths extends to the staff. "We start out by trying to hire people who have good attitudes and want to be in insurance," Tad says. "We're very, very blessed to have really great people here. The right kind of people are the keys to the future. We've always had the best staff we've ever had," he adds proudly.
Agency executives include (standing from left): Larry W. Jolley, senior vice president and chief operating officer; Timothy P. Farrell; Tad Krug; Ronald R. Lensing; and Karen S. Regan, senior vice president, marketing. Seated from left are: Debbie Bjornson, controller; Sherry Jaggers, vice president; Stacey Russenberger, vice president, personal accounts; and senior vice presidents Alfred L. Williams, William B. Sigler and Michael D. Halter.
RKF&L uses Omnia to test every applicant. "We do not hire people unless they profile well for the job for which they are being interviewed," Tad says, adding that everyone at the agency also was profiled.
The emphasis on strengths basically lets the people at the agency operate in an atmosphere of mutual respect. Producers tend to gravitate toward their areas of interest, and this really is the way that niche specialties have developed at RKF&L. These include construction, transportation, medical professional, and risk management services. "Our hit ratio in these markets is about twice what it is in general business," Tad says. "The people in these areas know about our agency and what we have done for our clients."
"We ... hire people who have good attitudes and want to be in insurance."
--Tad Krug
Claims people look for ways to improve service to clients. One idea that grew out of this need turned RKF&L into a 24-7 claims service 10 years ago. The service is called "Strikeforce."
"When we first started out, we asked volunteers to carry a beeper during off-hours. Eighty percent of our staff volunteered, including the principals," Tad says, adding that he too carried a beeper and got the inevitable calls in the wee hours of the morning. The way he remembers those calls exemplifies his attitude and the attitude of the agency toward clients. "It was the best feeling in the world to help someone in trouble," he says. The agency had partnered up with a restoration service that operates on a 24-hour basis, so they were able to send people to the scene quickly. The motto "When Lightning Strikes, We Strike Back" was adopted to promote the service to clients.
The agency also got into the self-insurance business through an acquisition in 1990. This allowed RKF&L to grow with its clients and be prepared for market fluctuations. "We do a lot of self-insurance in workers compensation," Krug says. However, the current soft market in that line has made self-insurance less attractive; so RKF&L got one of its insurance partners to provide traditional first-dollar coverage. The insurer agreed to let RKF&L continue to do the underwriting, claims handling and loss control. This willingness to change to better meet clients' needs is part of the essence of RKF&L. "What really works for us," Krug says, "is we listen for what our clients need and what their expectations are. Then we design products and services to meet those needs. Finally, we work our tails off to deliver what we promised."
Another example of this involved a national account that had operations all over North America. "We negotiated with one of our insurance companies and the results were we now write the risk using a custom designed policy form, with us handling claims and loss control," Krug points out.
The agency is active in the trade associations of its principal niche markets and has even worked with those associations to set up purchasing groups under the association's aegis.
To help retention, RKF&L is in regular contact with its clients. The agency sends out a quarterly newsletter and maintains with clients. "We try to alert clients to articles about their business," Krug says. "We're also up front about the marketplace, letting them know that we'll always be competitive but won't have the lowest price each year. We view our relationships as long term and want them to operate in the same way."
In personal lines, the agency started writing package policies about seven or eight years ago and worked hard to convert all customers to those policies. "Our retention did a complete turnaround," Krug notes. Starting this spring, RKF&L is getting into workplace sales for personal lines, using GROUPadvantage, an opportunity directly related to being a partner in Assurex International.
The agency's retention rate in commercial lines is 92% and 88% in personal lines.
RKF&L also believes in giving back to the community. "We feel we have been truly blessed as a business," Krug says "and want to help out where we can." One of the agency's contributions was a prayer hermitage that was presented to Oasis, an ecumenical retreat center. The prayer hermitage is a small, self-contained, one-room house used by one or two persons seeking solitude, reflection, "refueling" and prayer. The name Still Waters was chosen by RKF&L. The prayer hermitage opened in January of 1997 for individual retreats. RKF&L also is involved with a number of nonprofit organizations within Arkansas and raises money by organizing a golf tournament each year.
Technology is a key focus for RKF&L. "We're committed to Internet technology for the future," Krug says. "It will provide client access and faster service. We already have an interactive computer link with one of our larger clients now via Lotus Notes. The client can see the same things we see. They have access to claims detail and so on. I've never been more excited about the future of this business because of 21st century electronics," Krug concludes. "It can really add value for our clients."
It is this continuing focus on the needs of clients and improving service to those clients that makes RKF&L a worthy Marketing Agency of the Month. *
©COPYRIGHT: The Rough Notes Magazine, 1999