13th ANNUAL ROUGH NOTES
MARKETING AGENCY OF
THE YEAR CANDIDATES

New selection process for the 2001 winner utilizes a panel of experts

In January, one of the agencies featured in a Rough Notes cover story during 2001 will be chosen Marketing Agency of the Year. The agency principals of the winning firm will be presented with the award at a dinner held in their honor in February.

The Marketing Agency of the Year selection process is being changed this year to a peer review system of voting. The winner will be chosen by the former Rough Notes Marketing Agency of the Month winners for the years 1989 through 2000--representing 130 agencies. Ballots have been mailed to the owners of these firms, who will be allowed to vote for one of the 11 (February through December) Agency of the Month firms from 2001.

Thus, the winner of the 2001 Marketing Agency of the Year will have the added distinction of being chosen by a panel of agents who have demonstrated superior marketing and management capabilities of their own. The former Marketing Agencies of the Month represent a broad cross-section of firms--varying widely in size, geographic location (all 50 states and Canada are represented) and overall strategic emphasis.

The award nominees, described on the succeeding pages, also demonstrate a wide mix of agency sizes and styles.

A story on the winner of the Rough Notes Marketing Agency of the Year award will appear in our April issue.

FEBRUARY

Rigg Group
Fort Worth, Texas
Cecil Y. Ray, Jr., on the cover

When the going gets tough, the tough ... diversify. That's the highly profitable strategy pursued by the Rigg Group, which traces its roots back over 100 years. As a strong regional broker that competes with national brokers, Rigg has the muscle and flexibility to write business from corner stores to international conglomerates. Particularly during the prolonged soft market that prevailed until a couple of years ago, Rigg enjoyed the stability engendered by its carefully focused diversification strategy. Through its subsidiaries, the firm positions itself as a one-stop shop by offering excess-surplus lines capability through RISC, Inc., employee benefits and life and health insurance, and premium financing. With its strong financial foundation and supportive work environment, Rigg Group consistently attracts top performers who value the opportunity to make great money and have fun doing it.

"About 55% of our (RISC, Inc.'s) business comes from the general agency side and 45% is brokerage business. On the general agency side we will write just under $40 million in 2000 ..." --Robin Stough, President, RISC, Inc.

Cecil Y. Ray, Jr. (seated) is chairman of Rigg Group in Fort Worth, Texas. Charles Reynolds is executive vice president of Wm. Rigg Co.

MARCH

J. Smith Lanier & Co.
West Point, Georgia
D. Gaines Lanier on the cover

How many agencies do you know that have their own university? That's just one of the bold moves undertaken by J. Smith Lanier & Co., which has a proud tradition dating back to 1868 and today is a top player in the southeastern United States. With 14 offices, 375 employees, and revenue of some $40 million, Lanier writes a well-balanced mix of personal, commercial, and benefits business. Now in its fifth generation of family ownership, Lanier prides itself on being a private company that's run like a publicly held firm. Employees share in agency ownership through an ESOP, and management regularly transfers shares to the next generation. And to learn new insurance and personal development skills, employees don't even have to leave the office. The newly established J. Smith Lanier University develops for each employee an educational track that's designed to fit with his or her career objectives.

"The agency is dependent on many generations of people if it is going to be viable into the future ... We have 40 shareholders, plus an ESOP that owns one-third of the agency shares." --D. Gaines Lanier

Gary E. Ivey, CPCU, ARM, chief operating officer of J. Smith Lanier & Co. (left) meets with D. Gaines Lanier, president and chief executive officer. Gaines' aunt, Edith Lanier Wickham, who ran the agency from the early '30s through 1957, is shown in the photograph behind them.

APRIL

Matsen Insurance Brokers
Santa Rosa, California
Lynne Wallace on the cover

How does an agency grow from $1.1 million to $5 million in commissions in less than 10 years? Matsen Insurance Brokers has a three-word answer: focus, value, and strategy. Matsen focuses on carefully selected niche markets: real estate, construction, technology/communications, hospitality, goods and services, and health care services. The firm offers value by investing in employee training, and it pursues a strategy of building cooperation between producers and account managers. How Matsen defuses the tension between these two groups is testimony to the firm's practical, outside-the-box approach: Account managers are paid 10% of the initial commission for account rounding and referral generation, with the money coming straight out of the producer's pocket. What's more, account managers take more front-line responsibility for smaller accounts so that producers can focus on larger accounts. Everybody's happy--and the biggest beneficiaries are clients, who enjoy responsive service that's targeted to their needs.

"If you see a problem, it's probably because you are a part of the solution." --Lynne Wallace

Lynne Wallace serves as president of Matsen Insurance Brokers, and Ralph G. Matsen, the firm's founder, is chairman.

MAY

Litchfield Insurance Group
Torrington, Connecticut
Robert G. Phelan on the cover

The Litchfield Insurance Group is proud of its many beginnings: 1917, 1975 and 1998--each time reinventing itself to meet the changing needs of its clients. Most recently the firm sold its profitable personal lines business, resulting in a smaller, more focused agency, concentrating on commercial business. In its current arrangement, the agency's competitive edge comes from its providing innovative "Fortune 500"-type insurance solutions to middle market companies--those with between 50 and 1,000 employees. Litchfield offers traditional and alternative market solutions through its Captive Solutions subsidiary. The agency also has a relationship with a human resources consultant/lawyer. This relationship allows Litchfield clients to get help with all areas of employment law, regulatory compliance and practical HR issues. Technology clients have access to a cyber liability program that includes disaster recovery planning and a network security audit. Additionally, the agency has a safety consultant on staff. The approach appeals to agency clients as evidenced by a retention rate of 95% or higher. Litchfield works with clients in 22 states and 25 foreign countries.

"We have had a safety consultant on staff since 1989. Of all the things we do, this probably has had the greatest impact on our retention." --Bob Phelan

Daniel H. Kraut (seated) is president of The Litchfield Insurance Group. Robert G. Phelan serves as the company's chairman and CEO.

JUNE

Horst Insurance Agency
Lancaster, Pennsylvania
David H. Berndt and David C. King pictured on the cover

Fostering a "whatever it takes" attitude in an agency can bring about impressive results and that's precisely what happened at the Horst Insurance Agency. The agency's initiative toward managing client relationships and differentiating the agency all started when Dave King, senior vice president of sales and marketing for the agency, needed a new furnace in his home. In deciding which plumber to do business with, King based his decision on which firm "got it" in terms of professional service. Based on his experience with the plumbing professional, King set into motion activities within the agency to realistically evaluate its client services. Emerging from that evaluation process was an audit check that is sent throughout the policy term to workers comp clients. Intended to prevent "audit surprises" at the end of the policy term, the audit check consists of an exposure summary that helps clients know whether they correctly estimated their payrolls at the beginning of the policy term. In the employee benefits area, the agency oversees the enrollment process that can be difficult for clients. Agency President David H. Berndt notes that success in managing a large agency is a matter of choosing the fundamental strategies necessary to serve the ever-changing marketplace.

"Few changes have had as profound an effect as our shift from managing processes to managing relationships." --Dave King

The executive team of Horst Insurance includes (standing, from left) David H. Berndt, president; David C. King, senior vice president; and David J. Berndt, vice president. Seated (from left) are Sandra R. Gordon, vice president of client services and Louis R. Kolber, vice president.

JULY

Gregory & Appel
Indianapolis, Indiana
Daniel C. Appel on the cover

"We've gotten old by thinking young every day," says Dan Appel, current president and representative of the fourth generation at this 117-year-old family-run agency. Gregory & Appel exemplifies its long-term commitment to the community it serves by giving 10% to 20% of its pre-tax profit to human service and cultural institutions in central Indiana. This generosity was recognized when the agency received the National Society of Fund Raising Executives' 2000 Small Business Philanthropy Award. The agency defines itself as risk managers who take a holistic approach to clients by offering engineering and loss control services as a way to reduce the premium for customers while at the same time making the business attractive to insurance company markets. "From the very beginning," says Appel, "we advised our clients that the soft market would not last forever and that our emphasis on loss control would pay off over the long term ... There's a huge client education piece that lets professional agents distance themselves from the competition." Gregory & Appel uses a team approach to develop a multi-layer relationship with its commercial clients. Commercial clients have a lead broker, a risk management director and a CSR handling their account. And each client has its own claim representative who acts as an advocate and liaison with the insurance company adjuster during a claim.

"Our mission is to build partnerships with our clients, partnerships of trust and confidence, partnerships of shared goals and strategies." --Dan Appel

Pictured from left are Gregory & Appel's executive vice president and general manager, David Riley; president, Daniel C. Appel; (standing) senior vice president, John G. (Jack) Mahoney; and Jeff Webster, CPCU.

AUGUST

CIMA Companies
Alexandria, Virginia
Officers of the agency on the cover

Since its founding in 1949, CIMA Companies has grown to more than $10 million in revenues with 14,000 clients located in every state in the nation, Guam, Puerto Rico and the Virgin Islands. In addition to its Alexandria headquarters, the agency maintains offices in Baltimore and Atlanta. The agency's components include a subsidiary that provides fee-based loss control and other risk management services; a wholesale facility; an international business unit; a program business unit; and a construction and bond department. One consistent thread in the agency's growth pattern has been its attention to "problem" markets including legal services organizations, pension actuaries and social services organizations for developmentally disabled people. The result has been the creation of national programs utilizing both traditional markets and alternative markets. A further area of growth has been to set up strategic alliances with other agencies. "For the agent without a perpetuation plan, who wants to keep the agency intact with its own identity, we believe we represent a great alternative to the prospect of being acquired by a national broker or a bank," says Bill Henry, CIMA vice president. Bill Groves, senior vice president, points out that "... sweat equity does pay off. Every employee has the opportunity to become an officer and an owner."

"We have a history of developing and administering programs for classes of business that have problems obtaining coverage." --William Henry, Jr., Vice president, CIMA Companies, Inc.

CIMA executives include (front row, from left) Susan Kahn, David Brantlinger and Richard Bourne; and (back row, from left) William Henry, Jr., Laurie Coleman and William Groves.

SEPTEMBER

Harold W. Wells & Son
Wilmington, North Carolina
Calvin F. Wells (left) and Harold W. Wells, III, on the cover

This agency, which has been in the Wells family for four generations, has faced many of the challenges confronting most P-C agencies, as well as one claims-related challenge that may be unique. Within four years, starting in 1996, the agency's hometown sustained five direct hits from Hurricanes: Bertha, Fran, Bonnie, Dennis and Floyd. Not only did Wells & Son survive this onslaught of storms, but it racked up an average annual growth rate of 15% over the last five years. In 1999, the owners--Harold Wells, III, and Calvin Wells--at the urging of their sales manager, James L. Roberts, Jr., overhauled their business production strategy, narrowing their target accounts to those that offered the highest potential return. This meant account executives had to give up some small commercial accounts business and move toward working on a referrals-only basis. The agency also established a clear division between sales and service. This included setting up four "pods" for large commercial business (consisting of groups of account executives, account managers and assistants). The servicing for each pod is handled only by those account managers within the pod. The agency has 55 employees in three locations. It has seen strong growth in benefits business in the last 10 years.

"We were always looking for ways to work smarter. We wanted to make certain that our agency remained independent and continued to grow and prosper into the future." --Harold Wells, III

Harold W. Wells & Son executives include (left to right) James L. Roberts, Jr., TIA, account executive-sales manager; Harold W. Wells, III, president; Calvin F. Wells; and Harold (Hal) W. Wells, IV, account executive.

OCTOBER

American Insurance Services
Clark, New Jersey
Nick San Filippo on the cover

Nick San Filippo began his career in the financial services business and then merged with a property/casualty agency in 1976. In the 10 years that followed, Nick and his partner raised the premium volume from $300,000 to $5 million before dividing the agency between them. Nick formed American Insurance Services (AIS) in 1986. At that point San Filippo began to broaden his business outlook from a mostly sales perspective to more of a manager's perspective. He decided to become a Master Agency for SIAA (Strategic Independent Agents Alliance), the national network of more than 700 agency members writing more than $1.52 billion in annual premiums. This allows him to focus on helping other agents get started in the business--with company appointments, automation and what Nick calls "an opportunity to compete on equal footing with established agents." San Filippo's SIAA network includes 17 members in New Jersey and one in Pennsylvania. He has also formed other companies to complement his agency work: American Financial Services Group--which handles financial services business for San Filippo's SIAA members; Comp-Care Brokerage--a wholesale broker for monoline workers compensation; and Affinity Group Programs, LLC, which writes group auto and homeowners on a payroll deduction basis.

"I realized ... that I had been spending too much time in the business and was losing long-term perspective. I needed to get away from the day-to-day grind and begin to identify opportunities and 'seize' them when they emerged."

Nick San Filippo formed American Insurance Services in 1986. He has since established three sister companies and is a Master Agency for SIAA.

NOVEMBER

Payne Financial Group
Missoula, Montana
Bill Wrigglesworth on the cover

Three independent agencies, 14 offices spanning the entire state of Montana and parts of Wyoming, and nine or 10 different cultures--combining these entities was a challenge but also a recipe for success for Payne Financial Group, Inc. Opening for business in January 2001, the combined agency exceeded commission revenue of $18 million the first year, up from $15.5 million in commission revenue that was produced by the three separate agencies. To build a cohesive team, Bill Wrigglesworth, president and chief executive officer of the new agency, drove around the region for six months prior to the merger to meet with each of the 185 employees. Silo management, rather than management by location or region, has integrated the employees into one company. The agency puts a big emphasis on the three "C's"--Clients, Colleagues and Community. Some employees are invited to become stockholders based on their achievement, and Payne University ensures that employees will get the continuing education they need. Profitable changes at the new agency include: appointing an executive to handle insurance company relations, creating a Select Business Division to handle the small business market, and creating "specialty practices" to lend expertise to fellow producers.

"We have underwriting authority from some carriers, and are very proud that we have produced loss ratios averaging less than 30% for that business." --Brian Donahue, Chief Operating Officer, Payne Financial Group

Payne Financial Group President/CEO Bill Wrigglesworth (seated) met the challenge of bringing three agencies into one strong organization. Also part of the synergy are (left) Brian Donohue, chief operating officer and managing executive-Commercial Lines; and Ed Heine, executive vice president, Payne Financial Group and managing executive-Surety.

DECEMBER

Unland Companies
Pekin, Illinois
H. Jeff Peterson on the cover

From its humble beginnings in 1941 as a one-man life insurance agency, Unland Companies in Pekin, Illinois, has gone through several metamorphoses to become a top independent agency. It has gone from a life agency with a P-C office to a multi-office independent agency to a virtual captive agency and back to a multi-company independent agency with a strong benefits department. In the 1980s the agency took a sharp turn towards success when Unland Cos. became a COMPAR agency with Cigna. That relationship helped the agency advance in automation, underwriting and loss control, which has allowed Unland Cos. to protect its companies and contingencies. In 1986, founder Jim Unland sold the agency to the employees, using an ESOP, and H. Jeff Peterson became president. The human touch is a big part of the agency's service, beginning with the "real person" who answers the phone instead of an automated message. All employees are expected to form personal relationships with clients, and be involved in the community. The agency's specialties include writing 19 school systems, and offering Bank Owned Life Insurance. All told, Unland Cos. has premium volume of approximately $6 million in property/casualty business and $4 million in group benefits.

"We jealously protect our contingency income to the benefit of both our agency and our companies." --H. Jeff Peterson, President, Unland Companies

Unland Companies President H. Jeff Peterson (left) has been part of the agency's transformation since joining the firm in 1975. Other agency executives include Bill Shock (standing), vice president of life/health benefits, and Afton Booth, CIC, vice president.

Please help us name the Marketing Agency of the Year for 2001. Only agencies that have been a Rough Notes Marketing Agency of the Month are eligible to vote. Your agency is entitled to one vote.

From the 11 agencies described in this mailing, please select one as your choice for Marketing Agency of the Year. You can send your vote to us by e-mail, fax (toll-free) or mail. We must receive the vote by January 10, 2002.

1) To vote by e-mail: Send the name of your choice to: tmccoy@roughnotes.com

2) To vote by toll-free fax: Send the ballot below to Tom McCoy: (800) 321-1909

3) To vote by mail: Send ballot to:

Tom McCoy
Editor-in-Chief
Rough Notes Magazine
11690 Technology Dr.
Carmel, IN 46032

Select one of the 2001 Marketing Agencies of the Month from the list on preceding pages.

MY CHOICE FOR THE 2001 MARKETING AGENCY OF THE YEAR IS:

Your name:

Agency name:

Your e-mail address:

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