How many times have we heard, in countless speeches at countless insurance industry functions, that "insurance is a people business"? Unfortunately, too many times--given the fact that too often this phrase is given only lip service. Especially in these days of e-mail, voice mail and the Internet, some fear that human contact is fast becoming obsolete.
But when the Takats, Scott and Kathleen of the Babylon, New York-based Russell/Takats Insurance Agency, talk about insurance being a "people business," they mean it. "I wonder if we're too young a company for you," said Kathleen when approached by Rough Notes to do a story on their agency. Well, perhaps in this age of mega-mergers and the pretty-much-accepted notion that "big is better," the Russell/Takats Agency might seem an odd choice to some. But there is a story to tell here. It is a story of a young couple with one child, Jessica, who operate out of their own home. They have built a business, a small one thus far, but a business nonetheless. How did they do it? By talking to people and by choosing a niche that larger agencies are often reluctant to tap--life and health insurance for small and medium-sized businesses that employ as few as two and as many as 200 employees.
"We have roughly $6 million in premiums on the books," says Scott, "so we're certainly not the biggest agency out there. But our retention is excellent. We provide personalized service and, as a result, our clients don't leave us."
One client, for example, is Atlantic Liberty Savings in Brooklyn Heights, a relatively small savings and loan institution that employs just 27 people in its two branches in Brooklyn, New York. "We're not a large institution and so we need someone to work with us on our needs regarding health care, life insurance and other employee benefits for our workers," says Barry M. Donohue, president. "Our size doesn't warrant a full-time human resources person or risk manager. Therefore, it's important to have an agency represent us that not only can relate to our size, but that also represents other clients such as us and that can use that mass of business to bring more clout to the bargaining table when putting together health insurance programs."
"The thing I like most about our relationship with Russell/Takats," adds Michelle Rizzotto, assistant vice president of Atlantic Liberty, "is that we can talk to them on a one-on-one basis and they will provide us with a whole survey of life, health and dental products that fit our needs. They have saved us money over the 10 or more years that we've been with them--there's no doubt about that. But it's not just money. They make recommendations based on our needs rather than merely cost. And, I think that's just what a small business such as ours is looking for."
"A good many agencies out there shy away from writing health insurance," says Kathleen. "One reason is that there is a great deal of service that is necessary in writing health insurance. It is a service intensive business, and there's no denying it. Because we are a small agency and because our clients are primarily small businesses, we go the extra mile. For one thing, we accumulate information on the best doctors available in our area for various illnesses because we are often asked for referrals. We accumulate information, for example, on breast cancer and other illnesses. We help to keep our clients aware of support groups when they need them."
As an example of how the Takats become personally involved with their clients or even potential clients, Kathleen talks about visiting a potential client who showed some reluctance in leaving her current health insurer. "We told her to wait until she felt comfortable with making the change, but she seemed emotionally upset. She finally explained that she had some years ago contracted cancer. She was in remission, but she still had a three-year-old $15,000 chemotherapy bill that was outstanding from her health insurer. We knew from looking at the contract that it should have been paid and I asked her why she hadn't appealed the claim. She said that she was so happy to be alive and that her other bills had been paid that she didn't pursue the matter. We investigated and found that the hospital and doctors involved billed the insurer under the wrong ID number. One month from the date of our visit, she received a check for $15,000 plus interest." Needless to say, that woman is currently a client of the Russell/Takats Agency.
The Takats didn't start out with visions of glory and great success. Almost immediately after college, Kathleen was hired by a large insurance company as a sales assistant to group representatives in the health arena. Later, she was hired by a managing general agent and, within seven months, had sold $1 million in group health premiums. "I was happy with that job and worked with some of the finest people in the business," says Kathleen. "But Scott and I were just married and wanted to plan a family, and we knew that down the road we would want to make a change. We used our wedding money to buy errors and omissions insurance, bought a fax machine, a copy machine, and answering machine and went to work. Two months later, we received our first commission check. At that point, there was no turning back."
That was in 1988 and five years later, the Takats were approached by a broker by the name of Russell who wanted to retire and offered them the opportunity to purchase his book of business. "We bought that book of business and then wrote our first business plan," says Scott.
And although the Takats are growing, albeit slowly which is according to that business plan, it remains very much a family business. Kathleen's sister, Patricia Connelly, works with Scott and Kathleen as does Kathleen's mother, Barbara. Here again is a people story and one that undoubtedly drives the Takats in the direction of personalized service to clients.
Barbara is a widow who tragically lost her 15-year-old son, Kathleen's brother, in 1979. She joined the Russell/Takats agency in 1993 full time because, as Kathleen puts it, "it allowed her to help other families whose children have died. "I am proud to say that my mother has been named "Woman of the Year" for 2000 by the Long Island-based Women of Substance Ministries for her support of such families," says Kathleen.
Where will the Russell/Takats Agency go from here? Well, expansion is definitely under consideration, according to Scott and Kathleen. One area of expansion planned is into new product lines. Currently, the agency writes health insurance, dental insurance, short and long term disability, group long term life insurance, key man products and estate planning, the last category using the consulting services of Steve Irving, a financial services expert.
"But there is a great need for other products for our clients," says Scott. "For example, there is long term care. "There are the baby boomers out there who are just turning 50. They need quality long term care products and that's an area we're planning to move into."
"We've had overtures from larger agencies that want to take us into their operations," adds Kathleen, and that's an option open to them. But, she says that the Takats current client list has to be considered. "We want to guarantee them that they will still receive personalized service. They are, after all our people. And we are a people business." *