G. Edward Kalbaugh is co-founder and partner of Allegent Growth Strategies, LLC
By Dennis Pillsbury
G. Edward Kalbaugh is co-founder and partner of Allegent Growth Strategies, LLC
The insurance industry depends on the interrelationship of capital, product creation, distribution and consumer demand. Consequently, our objective was to create a consulting firm that would address the needs of all the players in the insurance demand/supply cycle," says G. Edward Kalbaugh, co-founder and partner, Allegent Growth Strategies, LLC, Woodbury, New York. "I headed Business Transition Services, a consulting company focused on insurance industry strategies and out of that came a relationship with Rich (Richard H. Hershman) and Joe (Joseph J. DeVito). We felt there was a need for an integrated consulting firm that could deliver a broad range of services that focused on increasing the value proposition for agents and companies. Their issues are so interrelated, it made sense for them to be handled by one firm."
Rich, co-founder and managing partner, continues that "most firms only focus on one aspect of an agency or company. Our approach is to first assess our client's business and then determine how to best increase value. Our goal is to increase the value proposition for our clients by multiples over our cost to them. In fact, that's our mantra."
The assessment includes interviews with key people at the agency or company and reviews of all processes, organization, technology, the capability of individuals, the competition, markets, customer profiles and service levels to customers. Once completed, options are defined and a plan of action is developed to maximize value by establishing specific goals and objectives. This process often results in solutions entirely different than may have been anticipated by the client.
For example, one agency approached Allegent to review what they believed was a problem with producer compensation. After the agency assessment, Allegent determined that compensation "was just the tip of the iceberg," Ed remembers. "Allegent and the agency owners agreed to undertake a complete restructuring and to develop new strategies that focused on a combination of internal growth and acquisitions. In addition to helping with the process, Allegent also brought in a number of our strategic partners to help the agency."
Richard H. Hershman is co-founder and managing partner of Allegent Growth Strategies, LLC
Chuck Eldridge, president of Firstate Insurance Holdings, Boca Raton, Florida, engaged Allegent to help with an expansion into Puerto Rico with a proprietary auto extended warranty product. The product is marketed directly through auto dealers and from insurance agencies to be located in 24 Pep Boys superstores in Puerto Rico by Firstate Insurance PR, Inc., an independent agency subsidiary of Firstate Insurance Holdings. Chuck explains that "you have to have that service aspect for the concept to work. You need to have a captive audience." Pep Boys services approximately 440,000 of the 2+ million vehicles in Puerto Rico.
"We already had a relationship with Pep Boys," Chuck says. "Allegent helped us formulate the initial business plan, helped us raise capital and assisted in developing the extended service contract. This project was far bigger than anything we had ever done before and we felt it was best to outsource in those areas where we needed knowledgeable people. The three partners at Allegent bring a tremendous knowledge base to the table, especially in the financial area."
He continues that he was also impressed that "Allegent was willing to take an equity position in the company. That showed me that they believed in it. It's a small position, but there are incentives going forward."
Chuck adds that "when I started in this business, I wanted to grow to have 1,000 employees. Now my dream is to have a few part-time employees and outsource nearly everything. I really believe in the concept. It allows me to do what I do well, which is selling, but I don't have to try to be all things to all people."
He concludes that the Allegent relationship has helped in a number of ways, including the fact that "they bring a perspective that I appreciate. They know how other agencies operate and can ask me questions about why I do something in a certain way. I may decide to keep on doing it that way, but at least I have a benchmark and can make an educated decision. Going forward, Allegent is helping me to identify agencies for possible acquisition and continuing to look over my shoulder as we look to export this program to the mainland."
Another example of Allegent's capability is its role in helping CoverageConnect, a technology company, further its business objectives. Allegent is helping CoverageConnect align with insurance carriers, wholesalers and large brokers who depend on small and mid-sized commercial account policies from independent agencies. CoverageConnect's "Risk Manager In A Box" is an online platform that enables producers to conduct surveys and define the risks and coverages of over 1,200 small, mid-sized commercial business types, then develop quotes and applications and submit them to multiple carriers. CoverageConnects's companion module, CarrierConnect, enables seamless connection to insurance carrier systems.
According to Charlie Ruoff, CoverageConnect executive vice president, "Tapping into Allegent's relationships enables us to quickly reach the right decision makers so we can present our solutions efficiently. Allegent is also helping us in other ways, including in a financial advisory role."
Expertise
The three partners at Allegent have nearly a total of 100 years of business experience.
Rich is a CPA with a BS in accounting and an MBA in taxation. In his 30-year career, he was a partner with KPMG Peat Marwick, specializing in the insurance industry, has served as CFO for a number of large insurance companies and is actively involved on the boards of several companies. His focus at Allegent is on setting strategic direction and policy, developing new business and providing management of client engagements.
In Joe's 32-year career, he was a partner with KPMG Peat Marwick, specializing in insurance enterprises and also ran an insurance company for five years. In addition to being a partner at Allegent, he is founder and chairman of DeVito Consulting, which provides litigation and arbitration support, audits and financial examinations, and a full range of operations management services. He is a CPA with a BS in accounting and an MBA in executive management. He is a recognized leader in insurance regulatory matters, having served as a teacher for state examiners and as legal support for insurance departments and is a loss reserve specialist in the state of New York. His focus at Allegent is on developing new business and providing management of client engagements.
Ed Kalbaugh reviews results of client assessment.
In his 35-year career, Ed has been president of Business Transition Services, a company he founded to assist Fortune 1000 companies, as well as insurance companies and agencies in achieving organizational redirection and business turnarounds. He also has served as regional president of the Strategic Insurance Agency Alliance (SIAA). His career began at Rockwell International, where he advanced to director, extended engineering operations, space division. While at Rockwell, he completed the six year UC/Rockwell Management Development Program. He has co-founded two technology companies. At Allegent, his focus is on developing and executing business strategies, developing new business, and overseeing operations.
This expertise is supplemented by a staff of experts inside Allegent, as well as strategic alliances with DeVito Consulting, Insurance Regulatory Consultants, providing state filings and actuarial services; Decisions Strategies, providing corporate intelligence and complex claims investigations; and TheAgencySite.com, an online resource center for insurance professionals. The result is that Allegent basically can do everything thanks to a little help from its friends.
Joe notes that while experience and expertise are important ingredients in helping clients, "equally important is who we know. For example, in the state licensing area, we know the people in the departments and are able to keep the process moving along. We're managing the U.S. branch office of a major foreign insurance company and have gotten them licensed in 15 additional states thus far."
Rich points out that "markets usually are the single biggest problem for agents. We know people at the insurance company level and can open a door for the agent. We know who is interested in what lines of business and who the right person is to contact."
Knowledge is power
Ed says that one of the things Allegent has found is that "agents have not done enough to leverage knowledge to benefit their customers. Part of the problem stems from the fact that agency management systems are designed to process information, but are not designed to enhance customer relationships. Agents need to understand the customer and provide key information to their clients that can help them achieve success."
He continues that the company can and has worked with agencies of all sizes. "The character may be different, but the problems often are the same." Ed concludes: "We don't try to change the character of the agency and its principals, but rather to find the strengths of those individuals and utilize those strengths to the maximum degree."
Allegent has four major practice areas -- Transaction Support, Corporate Development, Marketing and Distribution, and Legal-Regulatory Support Services -- with a number of services provided within each category.
"The key to successfully helping our clients is that we view them as partners and strive to establish long-term relationships that are mutually rewarding," Rich notes. "And our clients see this commitment to results in the way we define deliverables and in the fact that compensation is performance based. They appreciate our ability to look at all aspects of their agency or company and develop complete solutions that fit their management style and way of doing business." *
For more information
E-mail: info@allegentsi.com