Jack Windolf is chairman and chief executive officer of Bollinger, Inc., a large insurance agency that boasts a diversified customer base.
Bollinger, Inc., in Short Hills, New Jersey, is the 36th largest agency in the country, with $37.5 million in commission revenue and more than $270 million in premiums, making it the 16th largest privately held insurance broker in the United States. But, in many ways, it does not resemble the typical large agency, if there is such a thing. Bollinger has an extremely diversified customer base, with very few large or jumbo accounts. Instead, the majority of its property/casualty clients are small and medium-sized businesses and personal lines clients. It also has a large benefits division that provides $12 million of the agency's revenues, as well as a sports division and a golf division.
The agency initially began as a specialist in student accident coverage. In fact, when Jack Windolf, chairman and CEO, joined the agency in 1963, 99% of the business came from student accident insurance. "We've been diversifying ever since," Windolf notes. "Mergers and acquisitions have been a big part of that effort. Property/casualty coverages now represent the major part of our business. In the last few years, we've made more than a dozen acquisitions. Most of them involve smaller agencies in the $1 to
$3 million range."
The diversification both in terms of customers and lines of business has allowed Bollinger to grow steadily, regardless of the state of the insurance market. Last year, despite the continuing soft market, Bollinger produced $3.9 million in new commission income, with the benefits division leading the way. "We are on track to reach $5 million this year," Windolf says.
The agency, which traces its roots back to 1876, was a pioneer of the student and athletic accident insurance market in New Jersey. It entered that market in 1946 and quickly became one of the leading agencies in the field. In 1963, it leveraged its knowledge and clout in the athletic market by offering additional coverages to amateur sports teams and leagues.
Today, Bollinger has five major divisions, including two sports-related divisions--Amateur Sports and Golf--as well as Personal Insurance, Commercial Insurance and Benefits. This diversity has helped to isolate the agency from the vagaries of the insurance marketplace. In recent years, revenues from the commercial insurance side have been depressed due to the lengthy soft market. However, the Benefits Division has picked up the slack and contributed significantly to revenues.
The Benefits Division under Doug Cook, CLU, CPCU, ChFC, executive vice president, continues to offer the K-12 student accident and college student health coverage that was the mainstay of the agency for years. The division operates as both a general agent for small group health, group dental and prescription drug business and for student accident and college student health insurance. It also operates as a retail agent in its region for these specialties, as well as traditional employee benefit business.
Bollinger operates five major insurance divisions which are headed by (front row, left to right) Tom Marks, executive vice president, Club Programs; Mary Herring, executive vice president, Personal Lines; Lori Crispo, executive vice president, Amateur Sports Division; (back row, left to right) Lou Lefevre, executive vice president, Commercial Lines; and Doug Cook, executive vice president, Benefits.
"We write college student health for 75 colleges in the eastern half of the United States," Cook notes. "We provide K-12 student accident and athletic plans for 60% of the schools in New Jersey. We've exported this program to Pennsylvania and Connecticut." He continues that the division recognizes that "brokers are our life blood. There are occasions when we might be viewed as a competitor on a particular account. Whenever that happens, we step away from the situation. We've been selling through brokers for more than 50 years and have earned their trust. They know that we would never jeopardize the important relationship we have with them." With this being said, the agency insures more than 400 public school districts, more than 100 private and charter schools, more than 500 parochial schools, more than 300 nursery schools and day care centers and more than one million students.
On the retail side, "the majority of our business has come from rounding out the property/casualty accounts with employee benefits," Cook says. "However, we've also been the lead on some accounts and brought in the property/casualty people to round out the account. In the commercial group health area, we cover about 800 groups with another 1,500 groups through our GA operation." The division is about 50% retail and 50% wholesale.
The Amateur Sports Division also is an offshoot of the agency's original specialty, but it now provides all necessary insurance coverages for teams and associations. "This really is a fun aspect of insurance," says Lori Crispo, CPCU, executive vice president, who heads up the division. "We get to know all our customers and really become involved in what they are doing. We go to their trade shows and try to keep current with their needs. It's a pretty service-intensive niche." In addition to accident coverage, Bollinger also offers liability insurance, crime insurance, equipment insurance and directors and officers coverage.
Jack Windolf, who has been with Bollinger since 1963, says that the agency grows steadily due to its many acquisitions and mergers.
Bollinger provides amateur sports programs in all 50 states that include "all levels of amateur sports," Crispo points out. "We have programs covering local amateur sports teams and Olympic sports, including the U.S. Olympic Softball Team that won the gold medal in 1996. We actually insure two million softball players and over two million youth soccer players."
Crispo continues that the division provides service and sales on the Internet. "We're always working to improve our coverages to remain competitive." The sports division also operates a rent-a-captive so it can provide alternative risk transfer solutions to clients who want to use a non-traditional approach. It also provides added services including risk management, loss control, claims services and coverage analyses.
The Club Programs Division was started in 1983. "We already had some expertise in country clubs," says Tom Marks, executive vice president. "Early on, we had claims that were not covered. We learned a lot from that and used that experience to design a program with appropriate coverage enhancements that filled the gaps we discovered. The program is a complete package that included risk management as well as traditional insurance. Our efforts earned us the endorsement of the Metropolitan Golf Association. In 1990, we took the program to national level. Today, we provide risk management and insurance services to more than 125 golf associations and 900 golf and country clubs, tennis clubs and city clubs across the country."
Bollinger handles policy issuance, rating and underwriting and most of the claims (they have draft authority up to $10,000 on property losses). "All the functions are centrally located, allowing us to deliver a finished club program within three weeks. It's important to realize that every program is a little different. We fully appraise the needs of the applicant before we issue a package." Coverages include property insurance, liability and umbrella coverage, directors and officers insurance, employment practices liability protection and workers compensation insurance.
The Commercial Lines Division provides coverage to more than 3,500 businesses. Lou Lefevre, ARM, executive vice president, admits that the last few years have been difficult due to the unrelenting soft market. However, "we still managed to have a very successful year last year," notes Lefevre. "We wrote a sizable amount of new business and were able to increase our premium volume. We had $6 million in commission income and have produced outstanding contingencies equal to 11% of our revenues."
Lefevre continues: "We're a little unusual in that we're a large agency with several large accounts, but our average commercial account size is around $35,000 to $40,000. Everyone in our department came from a smaller agency and has brought that small agency service work ethic with them." (Lefevre came from Pearsall, Maben & Frankenbach which merged with Bollinger in 1994. He'd been with Pearsall since 1979.) "It's been very exciting to work at an agency that respects the service but has the marketing clout with a wide number of insurance companies." He adds quickly, however, that "we don't use that clout to force risks down a company's throat. We have a strong department marketing to the companies that places commercial business according to the expressed market focus of our company partners.
"We view a major part of our job as providing information to our clients. We're asset protection managers for our business clients and need to keep them informed about emerging risks and changes in the insurance market that could have an impact on their risk transfer choices. We send them a quarterly newsletter to discuss important issues. The latest issue covers the upcoming hard market," Lefevre says.
The Personal Lines Division handles 17,000 customers for auto, homeowners and other personal lines coverages. It also provides life insurance protection to more than 45,000 individuals. "Automation has been a key part of making all this work," says Mary Herring, CIC, executive vice president. "We can make a lot of touches with our clients due to automation. We're able to profile all our clients and make selected mailings. In the spring, for example, we send out information on insuring watercraft. We also acknowledge every change in writing to each of our customers."
Herring adds that the documentation required by many carriers and the state is substantial. "We've developed common forms that provide all the information required by each of our companies, depending on the type of coverage. We use the same form for every company. In some cases, it provides the insurer with more information than they require, but it allows us to have a common form that everyone in the department can complete almost automatically. This helps to avoid mistakes that can occur when switching from one form to another. All of our companies have accepted our common forms. We also work diligently to avoid double entry of any information."
Herring continues that operating efficiently has made personal lines extremely profitable. "We operate in a take-all-comers state but have still found ways to effectively manage risk and improve loss ratios for our companies," Herring says. One acquisition brought in a book of personal lines that had a loss ratio of 106%. "We brought that down to 60%. We contacted the clients and advised them about ways they could save money on their auto insurance by increasing their deductibles. This cut down on the frequency of claims and proved beneficial to both our clients and companies."
Bollinger has been recognized as a "Best Practices Agency" for its excellent combination of service and profitability. Bollinger was recently notified that they have been ranked as one of the 20 most productive agencies in the United States by Business Insurance magazine. The agency has 189 employees, making their revenue per employee right at $200,000. "We're extremely bottom-line oriented," says Jack Windolf. "We have strong financial controls that everyone takes very seriously."
The agency has 29 stockholders, with a "lot of younger employees in the mix so we have a built-in perpetuation," Windolf notes. In addition, the ESOP owns 45% of the agency. "This has worked very well for us. Every one of our employees is vitally interested in our success. We have full disclosure of all our finances and celebrate when we do well. We also recognize outstanding contributions with an Employee of the Month Award in each division as well as an award for referrals."
Windolf concludes: "I'm most proud that we've truly developed a sales culture, and our new business numbers display our success." *
In an interesting turn of events, one of Rough Notes' first agencies of the month is now part of this month's Marketing Agency of the Month. When Bollinger merged with Pearsall, Maben & Frankenbach in 1994, it brought aboard the people of The Maben Agency, which appeared on our cover in September 1989. Chan Coddington, who was president of Maben when the article was written, joined Bollinger as a managing director and is now semi-retired. Coddington continues as a consultant and lead agent on several major accounts.