MARKETING AGENCY OF THE MONTH
Cross-selling opportunities keep the competition low
and persistency high at Chicago-area agency
By Dennis Pillsbury
T.J. Adams Group senior staff members, standing (from left): Anthony S. Pulgine, CIC, chief marketing officer; Scott P. Walker, manager-information technology; Kenneth R. Olson, AIS, vice president-benefits; Michael Brod, select unit practice leader; and Juergen Huellen, chief financial officer. Sitting (from left): Rosemary O'Brien, CPCU, ARM, vice president and personal lines manager; Kent A. Nelson, president and CEO; Christine A. Gruden, vice president; and Jo A. Ayala, CPCU, vice president and claims manager.
As it enters its 35th year, T.J. Adams Group, LLC, is a transformed agency. From its beginning as a specialist for the construction industry, the agency has developed into a full-service firm that writes all coverages. Today, it celebrates its 35th anniversary with $17 million in revenue and 130 employees in six locations in the Chicago area--the headquarters in Lombard, two branch offices in Oak Brook, a branch in Bannockburn, and two in Palatine--and, in addition to offering all lines of commercial property/casualty business, also provides employee benefits, human resources consulting, safety and loss control consulting, high-end personal lines, and the ability to provide all of this on a global basis, thanks to its membership in Assurex Global.
The agency started life in 1967 as Cory & Adams, Inc., after its founders--Theodore J. Adams (who currently is chairman emeritus) and Daniel Cory. It was located on LaSalle Street in downtown Chicago. Steady growth and an expanding staff necessitated a move to the Oak Brook Commerce Plaza Complex in 1972, where it remained (moving once to a larger space in the complex) until 2001, when the agency moved to its present location to take advantage of an availability that "gave us everything we needed for going forward," says Kent A. Nelson, president and CEO. "We were able to sublease a beautifully furnished, 20,000 square foot location with category 5 wiring. And our news release about the move was picked up as a front-page story in the business section of a DuPage county newspaper announcing: 'Major Broker Moves to Lombard.' And to make it even better, the paper made a mistake, quoting our premium volume as $14 billion (the total for all of Assurex) and had to do a follow-up story. We got a number of calls from people because of the story."
At the end of 1998, T.J. Adams & Associates, Inc. (the new name adopted in 1982 following a change in ownership), boasted revenues of $7.9 million, principally coming from commercial property/casualty business. The agency had branched out from its construction specialty in the '80s, but remained very much a traditional property/casualty broker. It had 75 employees. T.J. Adams' chairman, Richard Miller, notes: "The board of directors wanted to bring the agency to the next level and began looking around for someone to lead that effort. Kent, who had more than 20 years of experience and held leadership positions with a number of top brokers, was known by several of the board members from his time as area president for Arthur J. Gallagher. We decided to offer him the leadership of T.J. Adams."
Kent A. Nelson took over the helm at T.J. Adams in 1998 when he was brought on board as president and chief executive officer.
"This approach (including loss control history as part of the submission package) has resulted in a very favorable response from the markets and in many cases has helped move our submission to the 'top of the pile,' which is a tremendous advantage in this market."
--Kent Nelson
"They promised me a politics-free environment," Kent remembers. Kent was with a large international broker at the time. "It sounded like an interesting change and challenge, so I decided to take the job." (Kent admits that "politics was less of a concern at a smaller broker, but certainly not completely absent.")
Kent immediately placed his mark on the agency by enhancing its ability to write multi-state and international accounts through gaining membership in Assurex, by boosting its internal and external communications efforts, and by increasing the value-added services and cross-selling opportunities so that, today, he's proud to say: "We don't have to walk away from anything."
Expanding value
One of Kent's first efforts involved getting T.J. Adams into Assurex. Fortunately, the agency in Illinois that was a member was purchased by a larger firm, leaving an opening for another agency. "I lobbied hard for membership and we were eventually successful. The membership lets us provide our clients with risk management anywhere in the world and guarantees that our clients will be treated in the same professional way that has been the hallmark of our agency," Kent points out. "When the agency started out in 1967, the motto was: 'No one works for Cory & Adams; everyone in the organization works for the client.' That remains our philosophy today."
He continues: "Assurex gives us the best of all worlds. We have an international network, but without the politics that you have inside an international brokerage. And each Assurex Partner will respond within 24 hours. That's part of the membership responsibility and everyone takes that seriously."
At the same time, Kent worked on improving communications internally and externally and also started an ongoing effort to enhance the value-added services T.J. Adams was able to provide to clients.
"One of the smartest things I did was to hire Christine Farmer to improve our communications," says Kent. "I had worked with Chris before. We brought her in on a consulting basis at first and then added her to the staff as our full-time communications manager. We want a lot of attention and we've gotten it because of Chris. We make the news."
He continues that in today's hard market, "visibility certainly doesn't hurt. People are getting hurt by the marketplace and are looking around. They remember our name and we have an opportunity."
Kent adds that internally, "we need to keep our employees informed. That's been especially important as we've grown. We now have more than 130 employees in five offices. We have a biweekly update that goes out on our intranet called 'The Same Page,' with smaller letters indicating that's what 'we're all on.'"
The third initiative involved expanding the value-added services provided by T.J. Adams. In 1999, the agency formed two subsidiary companies--Adams Safety Management Services and Medical Providers Risk Services.
Adams Safety Management Services (ASMS) provides loss control and safety programs for clients. "That's been key in today's market. A lot of carriers today won't even look at clients who don't have a safety program," Kent points out. "We even do some stand-alone fee-for-service work for other brokers and for some carriers. We have a contract with one of our Assurex Partners where we provide automated delivery of safety manuals and other consultative services to his clients. We've also worked with companies who have been cited by OSHA. We'll work with the client and OSHA to fix the problems at the company that led to the citation(s). It's really been a big help in opening some doors for us."
Medical Providers Risk Services sells medical malpractice to doctor groups. William Storie, CSP, ARM, heads up that company. "Bill came from a top broker and has a lot of connections with medical malpractice companies and has been able to maintain our markets, thanks to his relationships," Kent notes. The subsidiary contributes about $1 million in revenue with three people. "It also provides a tremendous opportunity for cross-selling," Kent adds. "The doctors themselves are looking for homeowners, auto and umbrella coverages to protect their personal assets, and the group often needs commercial coverages for the property and employees."
Heightening marketing efforts
The marketing department of
T.J. Adams has enjoyed a reputable position in the marketplace throughout the years, securing competitive rates and top-quality, comprehensive coverage with first-rate carriers. Marketing also operates on a consultative basis with the production units. "Our role involves not only working with the markets on placement but also assisting our sales units by recommending program structure and the best possible markets for a particular client or prospect," says Anthony Pulgine, general manager of marketing.
Another major marketing focus at T.J. Adams is incorporating safety and risk management into placement efforts. Marketing works directly with ASMS to develop an "Executive Summary" of a particular risk. ASMS professionals inspect the clients' job sites along with an analysis of their claims experience, which includes a trend analysis. Marketing then incorporates the "Executive Summary" into the submission package to give the markets a better comfort level with the risk and T.J. Adams' understanding of the risk. Anthony adds, "This approach has resulted in a very favorable response from the markets and in many cases has helped move our submission to the 'top of the pile,' which is a tremendous advantage in this market."
William R. Storie, CSP, ARM, AIS, practice leader, heads up Medical Providers Risk Services, LLC, the medical malpractice arm of T.J. Adams, which was formed in 1999.
Learning from partners
In addition to being able to provide access to markets around the world, Assurex also offers members "an extraordinary opportunity to network with other successful agencies," Kent notes. "The first person to call me after we became a partner was Steve Jackman of the Seitlin Agency (Rough Notes' Marketing Agency of the Month in July 2000). He pointed out that we had a lot in common. We both focused on 'building a wall of services around our clients,' as the story on Seitlin pointed out. And we both outsourced those services which were important to our clients but which did not make sense for us to do internally. We get together at every Assurex meeting and bounce ideas off of each other and try to help each other out."
For example, Kent continues: "We took a page out of Seitlin's book and established a partnership with a human resources firm two years ago. Strategic affiliate, Human Resource Advisors, Inc. (HRA), works hand-in-hand with T.J. Adams and its clients to tailor services that meet clients' specific needs on an as-needed basis. T.J. Adams has charged Joyce Grenis, resident of HRA, with not only providing a high level of service to our clients but also with educating our producers and account execs about HR compliance issues and cutting-edge HR topics. This dialogue equips our group to respond in a variety of ways to our client base," Kent comments. "Everybody has a human resources headache. It's been a great entrée. Then, once we're in the door, we start to cross-sell, usually leading with benefits."
Benefits is the fastest growing division
The agency basically "dabbled" in employee benefits a few years ago, before T.J. Adams made it part of the overall initiative to expand value-added services. "Three years ago, we had three people doing benefits," Kent points out. "Today, we have a 15-person department under the direction of our benefits vice president--Ken Olson, AIS--that produces more than $3 million in revenue. It's our fastest growing division and has really helped us in this hard market.
"These days, it's been easier to go in on a new account on the benefits side. That's been our door opener. Eventually, the customer then comes to us looking for help on the P-C side. It really would have been difficult for us to grow the way we have if we didn't have benefits as part of our arsenal." Ken [Olson] adds: "This successful cross-selling of existing clients has involved earning our sales team's trust in the value-added services that the benefits division offers. Exposing long-standing client relationships to this venture was risky so we had to do it right."
Kent points out that the addition of benefits has served "to keep the competition out. We really are solving all of our clients' risk transfer needs. It's been interesting to observe how inured the benefits' clients are to double-digit rate increases. They've gotten used to getting whacked every year. And now they're getting hit with even worse increases on the property/casualty side that the benefit increases almost seem pleasant in comparison." It also helps that they see us on a regular basis, either working with their human resources department or helping with a benefits case or a workers comp claim or helping with a loss control program. They know that they're getting something for their money."
Ken [Olson] comments that "in these times of high premium increases, clients look to T.J. Adams as more than a professional insurance buyer. Benchmark data, employee communication templates, legislative updates and out-of-the box plan design strategies help clients make sound decisions and contribute to the overall high client satisfaction level."
The result has been that T.J. Adams enjoys retention of more than 95% in both the commercial P-C and benefits divisions. And revenues have more than doubled in the last three years. It was ranked as the 10th largest agency in the Chicago area in a recent Crain's Chicago Business.
Helping clients maintain their personal assets
The agency also formed a partnership with a CPA firm that provides wealth management and other accounting services. "This primarily is a service for the executives of our commercial clients," Kent points out, "and is another important piece in our being recognized as a professional advisor.
"We also have a high-end personal lines division under Rosemary O'Brien, CPCU, ARM. She works with markets that focus on the special needs of the high-value personal lines marketplace. These people don't just purchase off-the-shelf products, but often need to schedule property like art collections, jewelry, family heirlooms and other valuables. The companies that specialize in this area help them with valuations, proper storage, security and so on."
Future plans
Kent says one of the agency's goals is "to become an even stronger sales organization. Brian Cullen, ARM, CIC, and self-described Risk Management Coach is leading that effort along with several key people in the company. They formed a committee to champion the cause of new business sales and brainstorm strategies that work." Besides managing a large book of business, Brian wears the sales management hat in the company and is working with some of the more progressive Assurex partners to help sharpen the approaches. Initiatives include Business Continuity and Disaster Recovery Planning, Safety Audits and use of diagnostic appointments to approach prospects and expand client relations. "We're convinced that we can be even more aggressive about getting out in front of people and doing more presentations," says Brian.
"We have all the pieces in place to support a stronger sales effort," Kent adds. "We have a talented sales and support staff known for their expertise, experience, integrity and relationships in the industry. We've also brought some highly qualified people into our claims department to enhance the value-added and prevent E&O problems. We've put together a very strong financial department. And our automation and telecommunication systems are state-of-the-art. Tools and support are available for our professionals to implement industry best practices and achieve excellent results."
Kent says the networking with Assurex Partners "certainly will help with this effort. They all are very strong sales organizations and many of them have tried different things to enhance sales. We continue to share a lot of ideas with them and are increasingly convinced that it is a mutually beneficial relationship. It's another vital reason to be part of that organization."
Kent concludes: "The communications piece has helped to tie all our efforts together. External communications helps to bring us to the attention of the public, and internal communications helps keep all 130 of us striving for the same goals. Very few agencies have a communications manager, and I think that's a significant oversight. It really has been instrumental for us."
A commitment to education
T.J. Adams is committed to enhancing the knowledge base of its staff. Nearly 15% of the workforce has earned the CPCU designation; and many hold the ARM, CIC and CSP designations. A number of the agency's people teach at the Insurance School of Chicago; and Kent is an adjunct professor at Northern Illinois University (NIU), where he teaches seminars in negotiation and in leadership. He is a member of the NIU Board of Executive Advisors and was a founder of the NIU Executive Club of Chicago.
In addition, members of the staff speak regularly at industry-related events and frequently author articles.
Kent says that "teaching helps me stay abreast of subjects that are valuable in today's business climate. It really helps me keep my communica-tions and organizational skills sharp."
T.J. Adams' goal of reaching another level certainly has been realized, but it clearly is not the end. The agency is committed to continually strive, as evidenced by its future plans to become an even better sales organization that consistently cross-sells. If the agency was able to more than double revenues in three years, one has to wonder what the next three years will bring as the agency becomes an even better sales organization. It is for both its past successes and what promises to be a bright future that we recognize T.J. Adams as our Marketing Agency of
the Month. *