Joseph J. Dolce, CPCU, vice president and director of program services for Venture Programs, tees off, symbolizing the organization's strength in the golf program market. Other Venture Programs executives (left to right) are: William T. Dalton, director of sales and marketing; Jacqueline Wegner, director of risk management; Beverly Dymek, manager of policy services; and Roger A. Nelson, director of underwriting.
There seem to be as many solutions to growing an agency's business as there are agents. The entrepreneurial spirit leads agents in many different directions as they find creative solutions to overcome adverse market conditions and seek to take advantage of opportunities. And this month, our Agency of the Month has undergone a metamorphosis from a small retail agency 23 years ago to a strong regional agency and a national program administrator providing programs to agencies ranging in size from the small one-person shop to the nation's largest broker.
Phil Harvey first started his retail agency, Philip J. Harvey & Co., West Chester, Pennsylvania, in 1976. When the market hardened in the late '80s and Phil's large business clients began getting hit with huge increases and cancellations of coverage, he helped his clients find alternative markets and, in the process, created markets for other agencies as well.
Phil is president of the Harvey Insurance Group, the parent company of his retail and wholesale businesses. He started his career in industrial sales with Johnson & Johnson. Then he moved to Connecticut General, where he worked with property/casualty agents, helping them sell life/health coverages. "I learned a lot about the needs of agents from working with them and eventually started my own retail agency," Phil says.
"We took the service mentality from the retail side and transferred it to the wholesale side. ... and we began servicing our customer--the broker who wants to place business with an industry specialist."
The initial years were very successful with steady growth. And then the aforementioned hard market. "Most of our large clients were in a position where premiums were swelling and support services from the carriers were deteriorating," Phil remembers. "We started working with Commonwealth Risk to develop alternative markets for our clients. The majority of our large clients wound up in rent-a-captives." By 1994, he continues, "we started to see further retreat from these markets. There were widespread non-renewals in workers compensation. The majority of risks wound up in the assigned risk plan where there was no emphasis on loss control."
Among those clients who were looking for help were "a number of clubs in the golf industry who approached us about putting together an alternative for the golf industry in the Philadelphia area," Phil notes. And that's how the metamorphosis began. "There were approximately 35 clubs in the area that came to us for help," he continues. "Those numbers gave us the necessary data to develop a model to support development of an alternative market. At the time, all of the clubs were insured, some by us and others with competitors. We let those competitors know what we were planning to do and worked out an arrangement where they would continue to receive a monthly commission check and suddenly we were program administrators."
The Preferred Club Program was set up in 1994 with a total of 40 clubs. Today, there are 800 clubs in the program. "And we still have all the clubs we wrote in 1994," Phil adds proudly.
So, it was time for a decision.
The golf program was a tremendous success. Now, does the agency follow up on that success by developing other programs or does it continue to operate as a retail agency with a stand-alone entity golf program? It wasn't an easy decision. The status quo offered continued revenues with very little downside. On the other hand, building on the program business offered unlimited opportunity in a field they had found that they enjoyed.
"We liked working with agents and brokers," says Phil, in explaining the reason they opted for the latter. "And we found that we could offer a real point of difference to them by providing true value-added service to brokers and agents in niche markets where we developed an expertise.
"We took the service approach from the retail side and transferred it to the wholesale side. We created a new wholesale company initially called Program Administrators, Inc. to handle the administrative side of the business. We began hiring professional underwriters, risk managers and loss control specialists. And we began servicing our customer--the broker who wanted to place business with an industry specialist."
Bill Dalton, director of sales and marketing, adds, "Most companies copy what's being done when they enter a market. We look into the unique areas of product design. We research the markets to determine what coverages they really need and design our programs around that. We always look to differentiate ourselves through the coverages we offer, pricing flexibility and responsive underwriting to the brokers and agents on both the front and quality services on the back end. We provide claims and loss control services, as well as an ongoing marketing campaign in each of our areas of specialty."
The company supports the agent's marketing efforts by advertising in the trade journals of its niche markets. "All of our advertising focuses on the quality of the product and advises businesses to buy from the agent or broker of their choice," Bill says.
William T. Dalton manages the sales and marketing effort of Venture Programs, which includes attending trade shows for industries they serve.
Today, the hospitality, employment, social service, life sciences and utilities industries have been added to the golfing industry as areas of specialty. And the program administration capabilities were expanded and renamed Venture Programs this year to reflect the overall focus of the expanding wholesale division.
"We identify markets using information available at the SIC (Standard Industrial Classification) level," Bill says. "There's information on growth patterns, number of potential clients, premium potential and so on. This helps us determine overall market potential and which industries we should concentrate our efforts on."
"The quality of service at Venture Programs is supported by an experienced, professional staff," Phil adds. "Joe Dolce, vice president and director of program services, coordinates the operations from product development to product delivery. Joe's expertise in development helps us determine which classes of business we should concentrate on and which insurance partners should be involved. Beverly Dymek, director of policy administration, like Joe, has been with us for 17 years and supervises the rating and policy issuance staff to ensure timely service to our brokers. Jackie Wegner, director of risk management, oversees claims and loss control services and is often called upon by our brokers to develop client-specific risk management programs.
"In addition, Bill Dalton, director of sales and marketing, has been brought on board to enhance marketing strategies and to develop a national sales and marketing force. Tina Land, director of finance, coordinates an effective national billing, accounting, and licensing system. In recent months, Roger Nelson has brought his 25 years of underwriting experience to the company to direct the underwriting unit."
Phil points out that Venture Programs offers programs in markets that represent more than $6 billion in premium. "We also offer customized program services to agencies," Phil continues. "We can help any agency take an idea from dream to reality. If an agency has a niche market it wishes to pursue, we'll work with them, providing support wherever they need it. We can arrange for reinsurance placement, loss control, claims handling, marketing. We do these private label type arrangements on an exclusive basis. They're a true joint venture between us and the agent."
In order to provide even better service to agents, Venture Programs has instituted a decentralization program with offices in the Southeast, New England, the Midwest and the West. Each office is responsible for a handful of states and operate as "our eyes and ears in those geographical areas," Phil says. "This lets us respond to regional market changes more effectively."
Phil concludes, "All of Venture Program's business comes from brokers and agents. And now we're helping other agency owners develop similar programs where they see an opportunity. It's a real partnership." *
©COPYRIGHT: The Rough Notes Magazine, 1999