Smart Choice® lets agents choose their path to success
By Dennis Pillsbury
First row (from left) are: Program Directors Jason Worth (KY), Cary Wilson (SC), and Deborah Brandon (IN); Director of Public Relations Holly Fields; President Doug Witcher; and Program Director Jim Goss (TN). Second row (from left) are: Program Directors Jim Cook (GA), Bruce Cunningham (VA), Paul Taylor (KY), and Chuck Hadfield (AR); CFO Steve Bostian; and Program Director John Worth (KY). Third row (from left) are: Program Director Brad Haines (NC); Senior Vice President of Marketing Eric Love; and NC Agency Development Director Arch Hamilton. Ohio Program Directors Rob Newman and Mike Tucker are not pictured.
"I thought it would be really neat to be able to offer name brand companies to (small) agencies like mine by somehow pooling the resources of a number of agencies."
--Doug Witcher
For many independent agencies, success is measured in terms of premium volume and market share. It defines their ability to obtain company appointments and keep markets open. The plethora of mergers and acquisitions provide clear evidence that size does matter, especially in the current marketplace where insurance companies continually ratchet up the volume requirements and play the 80/20 game to the detriment of smaller agencies.
But not all owners want their agencies to become huge. There are many entrepreneurs out there who want to build a small, profitable boutique operation where they can exercise their talents for selling and servicing without having to develop an expertise in management. And just what are they supposed to do?
One answer is to become a Smart Choice Agent.
The Smart Choice Agents program was started in 1994 by Doug Witcher, president of Worldwide Insurance Network, Inc. (WIN). Under the program, WIN contracts with insurance companies and provides those markets to the Smart Choice Agents. From a small group of 13 agencies in North Carolina with a couple of carriers, the concept has grown to comprise more than 1,000 agencies and 17 insurance companies. In 1998, the states of Tennessee, South Carolina and Virginia were added to the program; Arkansas, Georgia and Kentucky were added in 2000; and Ohio and Indiana in 2002.
Doug explains that the program grew out of his own frustration in trying to obtain company appointments. "I was one of those small agents back in the early '80s. I started my agency in 1979. It was a small shop with one principal and two employees. I wanted access to more companies to better serve my customer base, but every time I tried to bring in additional carriers, I was warned by my current companies to keep my production up."
Pictured (from back to front) are: Program Directors John Worth (KY), Deborah Brandon (IN), Jason Worth (KY), and Paul Taylor (KY).
Doug continues: "I thought it would be really neat to be able to offer name brand companies to agencies like mine by somehow pooling the resources of a number of agencies. Starting in 1988, I began talking to companies about the concept and by 1994, got the okay from a couple to try it out in North Carolina. They were very pleased with the results and in 1996 asked me to expand to other agencies. We grew to 140 agencies in North Carolina by 1998 and then started moving into other states."
The main objective of the Smart Choice program, Doug points out, is "to help our agents reach their full potential as they define it."
Tom Wiecek, CIC, owner of Paramount Insurance Agency, High Point, North Carolina, wanted "the freedom to operate a small, profitable business and not worry about volume. I wanted to open an agency in High Point to serve the insurance needs of my community, but I couldn't secure appointments from companies. Smart Choice proved to be my best option. I started the agency in January 1997. Today, we have $1.2 million in premium with 80% personal lines, 15% commercial and 5% life/health. We have a full-time CSR and a part-time receptionist."
Mark Allen of Mark Allen Insurance in Salisbury, North Carolina, was one of the first in the program. "I'd been with Farm Bureau for about five years and had produced a consistently good loss ratio. That meant nothing when I decided to go on my own and started looking for company appointments. Smart Choice provided me with markets and security and guidance. I wouldn't think of trying to start out in this business without a Big Brother backing me up. In the past 10 years, I've seen three agencies in the area close their doors, and many others are having difficulties with markets. But, with Smart Choice as my Big Brother, I've always had markets. I have no intention of ever leaving Smart Choice."
Mark Allen Insurance writes about $2.5 million in premium, almost all personal lines. Mark's oldest son joined him about three-and-a-half years ago, "which finally gave me time to take a vacation," Mark adds. The agency also employs two CSRs.
While the provision of markets is a centerpiece of the program, Doug notes that there are "education and training programs to help agencies succeed." He continues: "I'm very proud of the fact that we've helped many minority agents get into the business and succeed. We've also worked with captive agents who wanted to become independent. Most of the training is provided at the request of the agents."
Standing (from left) are: Program Directors Cary Wilson (SC), Brad Haines (NC), Chuck Hadfield (AR), and Jim Goss (TN); Senior Vice President of Marketing Eric Love; and Program Director Jim Cook (GA). Seated (from left) are: Program Director Bruce Cunningham (VA) and NC Agency Development Director Arch Hamilton.
The program offers a "unique concept of gatekeeping" that has been partially responsible for its acceptance by the insurance companies. Applications for coverage from the agents are sent to Worldwide Insurance Network, which reviews them and then uploads the information to the company. "We want to make certain that the submissions are in line with what our companies are offering," Doug notes. "We've spent a lot of time producing quality business for our companies and don't want to do anything to jeopardize that relationship. Our focus has been on making money for our companies and for our agencies. We've actually worked with the companies and looked in-depth into where they are making money. We've analyzed their books by geography and/or product type and actually put together a profitability model for each state and area. Once we determine what has been profitable for the company, that's all we sell. Our agents understand that we don't have a full line of coverages and work within those parameters. Ninety percent of new agents do all their business through our program." Doug concludes that the increased number of insurance companies involved means that "we now offer a broad line of products. We even offer tax preparation."
Each state has a program director who handles recruitment of agencies "and we wouldn't be where we are today without them," adds Doug. The target agencies for the program directors are "smaller independent agencies who have chosen to be that size, but want to be able to offer good quality business from recognized insurance companies."
Smart Choice produces more than $100 million in premium. It is the largest personal lines producer for The Hartford and is near the top with Travelers. The program holds annual meetings in each state where agents are recognized as being a leadership agent ($50,000 in commissions) or a peak performer ($100,000 in commissions). It is anticipated that the program should be up and running in Illinois, Iowa, Missouri, Pennsylvania, Texas and Wisconsin by the end of this year.
"In the final analysis," Doug concludes, "it's all about relationships. Our meetings are designed to enhance our relationships with our member agencies. Our profitability models are designed to enhance our relationships with our companies. That's the glue thatholds it all together. And most important, of course, is the unique relationship that small agents have with their clients and the community that they serve." *
For more information:
Smart Choice
Web site: www.SmartChoiceAgents.com