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MARKETING ADDING VALUE, BUILDING STRENGTH In the heart of oil and gas country, Stoltz & Co. brings skill and focus to challenging risks By Elisabeth Boone, CPCU
What comes to mind when you hear the name of Midland, Texas? If you’ve never been there, chances are you’ll think first of our current President, George W. Bush, and his father, former President George H.W. Bush. Both men were active in the oil business in the area, and if you’ve been to Midland, you know that oil and gas are king. Midland is also home to Stoltz & Company, LLP, an independent agency that was established in 1990 by Mark A. Stoltz, CIC, who serves as majority agency principal, chief executive officer, and managing partner. Patricia Clevenger, CIC, CPIW, partner and chief operations officer, is responsible for all of the agency’s internal operations, including the management of its branch offices in Houston, San Antonio, Fort Stockton, and Amarillo. Clyde Sawyer, partner and commercial account executive, is responsible for business development in the Fort Stockton and San Antonio offices. A significant portion of Stoltz & Company’s book consists of oil and gas risks and related businesses. Before starting the agency, Mark, a 1975 Texas Tech graduate, worked as a sales representative for an oil and gas company. In 1983 he became a producer for United General Insurance Company, which at that time operated as a direct writer. A year later, Stoltz and some other producers bought the office and turned it into an independent agency. They operated the agency as partners and producers until 1990, when Stoltz established Stoltz & Company. Clyde Sawyer joined the new agency as a partner at that time and was largely responsible for the establishment of the Fort Stockton location. Clevenger began her career in 1977 in the loss control department at the Dallas branch of Royal-Globe Insurance. She subsequently returned with her family to her hometown of Hobbs, New Mexico, on the eastern border of the state some 90 miles west of Midland, and joined an agency there. At the agency, she says, “I learned just about everything I know about insurance, under the mentorship of a wonderful woman there. I began in personal lines, became a bond specialist, then a marketing assistant, a commercial lines account manager, a trainer—you name it, I learned it,” she says. Clevenger later joined another agency in Hobbs and worked there until 1992, when she bought into an agency. “One day I was called and asked to do some consulting work for a firm called Stoltz & Company,” she says. “It was a two-year-old company, and they needed some operations assistance. From 1992 to 1996, I visited them in Midland about twice a week, helping Mark put together an operating structure for his agency.” After many discussions about her coming on board with the agency, Clevenger says, “In 1996 Mark made me an offer I couldn’t refuse, and I joined the agency as operations manager. In 2001, I bought in as a partner and became chief operations officer.” Wide range of risks The property and casualty division of Stoltz & Company places coverage for a wide range of commercial risks, including those with international exposures. Areas of specialization include oil operators, service companies, manufacturers, distributors, contractors, agriculture, medical facilities, public entities, real estate property management, transportation, retail/wholesale, financial institutions, and professional liability. In addition to oil and gas companies, Stoltz & Company arranges coverage for facilities that support those companies. “We write oil lease operators, drilling contractors, servicing contractors, machine shops, manufacturers, meter and pump facilities—we’ve probably written at least one of every kind of risk associated with the oil and gas industry,” Clevenger says A unique feature of Stoltz & Company is its alternative risk financing group. The creative talents of this group allow the agency to develop specific programs and write difficult, hard-to-place risks as well as large and/or complex exposures. The employee benefits division offers health and life products along with ancillary products to meet clients’ needs for human resource services. The agency has access to markets for both domestic and overseas business and has relationships with several excess-surplus lines facilities. Its main operating territory is Texas, New Mexico, Oklahoma, and Louisiana, but the agency has clients in almost every state. 15 years young
Although Stoltz & Company has been in business since 1990, “I still consider us to be a very young agency,” Stoltz says. “We started the agency right when the soft market was beginning. That market prevailed for many years, so we built our operation up through the very softest conditions. I think it took a little bit more innovation on our part to accomplish certain objectives and to get our services to the level where we thought they needed to be. We needed someone who could move us ahead technologically as well as operation-ally into the next phase, and that was Patricia’s role. She came in to give us expertise that we simply didn’t have. All along, and especially over the last three years, we’ve been acquiring key people who have the expertise we need,” Stoltz continues. “For example, one of our investments is in an environmental specialist; he and another engineer on staff are Certified Safety Professionals. We also have a certified workers comp specialist. We’re acquiring a level of expertise to help us move in the direction we want to go.” With respect to his—or any agency’s—direction, Stoltz observes, “There seem to be two parallel lines that, in the insurance buyer’s mind, never converge: One is professional services and the other is sales. Most buyers would approach us as a sales organization rather than as a professional services provider like a law firm or an accounting firm. We really should be sitting next to these advisers,” Stoltz says, “so our challenge is to acquire the expertise we need to demonstrate that we can provide those professional services our clients require. To us, it’s important not only to develop and offer those services but also to provide the kind of value that can positively affect our client’s balance sheet. We need to make prospects aware that these professional services are in fact available.” To provide those services, as well as to perform the traditional agency functions of sales and service, Stoltz & Company employs a staff of 36. Twenty-two people are at its headquarters in Midland; seven work in the San Antonio office; four at Fort Stockton; and three are at the Houston location. Of the agency’s total staff, 10 are producers, some of whom specialize in a particular area while others, particularly younger producers, are generalists. “Because of the way we’ve structured our risk management services, our agency is designed to be accessible to accounts that need the extra value we provide,” Stoltz says. “Often those are the larger accounts with complex needs that require a higher level of sophistication. We’re not focused on an account in terms of premium so much as we are on the services and added value the client needs.” Having said that, he adds, “We have a lot of accounts that are over a million dollars in premium, and we write some that are a hundred thousand but that are very sophisticated because of what they do.” Boom and bust Because Stoltz & Company writes a large volume of oil and gas business, the agency’s principals are well aware that the industry is extremely vulnerable to boom and bust cycles, and these cycles affect not only the operators themselves but also the economy of the entire surrounding region. “One reason we’ve entered other geographic market segments is to diversify our income stream,” Clevenger explains. “With such dependence on oil and gas, we know how important it is to have other sources of business. Our San Antonio office, for example, is going to be highly diversified, pursuing business in a lot of different industries.” In addition to oil and gas, another market in which Stoltz & Company has significant involvement is professional liability for lawyers, architects and engineers, and consulting firms. “We also write quite a lot of contractors in specialties like granite and marble; heating and air conditioning; and plumbing,” Clevenger says. On the manufacturing side, “we tend to write more of the heavy manufacturers,” Stoltz says. “We work very hard to custom-tailor solutions to meet our clients’ needs, as opposed to just selling product and price,” Stoltz says. “We recognize that the level of value we provide may or may not be of great importance to some companies, so we don’t pretend we are the agency of choice for everybody. For people who want value and realize that risk management can have a substantial impact on their balance sheet, we’re the one they need.” Re-branding effort
To communicate the image of a value-oriented agency, Clevenger says, “In the last year we’ve re-branded ourselves. Working with a design consultant in Houston, we’ve created a new logo and a new Web site. We’ve adopted four words that we think convey our position in the market: ingenuity, strength, dependability, and strategy. Ingenuity is the creativity that we bring to the table. We believe we can craft, as Mark said, a very tailored program for each client. Our strength is in our relationships; we’re extremely relationship oriented, with our clients, our companies and underwriters, with our trusted advisers, and within our staff. Dependability is embodied in our risk management group, which is made up of our engineers, our work comp specialist, and our claims specialist.” The fourth word, strategy, Clevenger says, “means aligning us, our carrier, and our client in the very best position to meet the client’s needs and control the total cost of risk. We’ve repositioned ourselves to show people that we are not the insurance industry that Eliot Spitzer is trying to make an example of. We are a professional services organization. Every agency has access to products, but not every agency is a professional services company,” Clevenger declares. “People don’t associate insurance agents with the level of professionalism of a doctor or CPA. We’re trying to turn that ship around and give our organization a new vision when we talk to people about putting together a program that will meet their needs.” Valuable feedback To obtain feedback from professionals in other disciplines, the agency recently established an advisory board. “We invited some of our clients and a couple of our own trusted advisers, as well as two other highly respected business leaders, and we had our first meeting in March,” Clevenger says. “We made a presentation on our new branding to help them understand what we are doing and all the kinds of services we provide. We asked the advisory board members to take a few minutes in private to review the presentation, then come back and give us their thoughts. What we heard from our advisers is also what we’re hearing from the general public,” Clevenger observes. “They want somebody they can trust, and that’s what we want to be.” For support and guidance in living their mission, the principals of Stoltz & Company rely heavily on the knowledge they gain as members of The Sitkins 100TM. “Joining the group gave us the opportunity we were looking for to keep learning and challenging ourselves to improve, with a group of peers who share the same philosophy we have,” Clevenger explains. “It’s wonderful to be able to come together with a group of people who have the same strong drive to build relationships and get better at what they do. We love the challenge of it. We hear a great idea from another member, and it challenges us not only to make it work for us but also to find something we can share that will benefit others.” New initiatives Looking ahead, a key concern for the partners of Stoltz & Company is perpetuation. “An important part of our mission is our commitment to the independent agency system,” Clevenger says. “That means we have to create perpetuation for ourselves. We don’t want to sell; we don’t want to be bought by an alphabet house or a huge corporate broker. We love the culture that we as an independent business can create and use to better people’s lives,” she says. Another way in which Stoltz & Company is moving to secure the agency’s future is by recruiting and training talented people. “We’ve been able to hire some wonderful young people just in the last year and have begun teaching them the complexities of the insurance business as part of our perpetuation process,” Clevenger says. “We want Stoltz & Company to be around a long time, and we’ve been making a major investment in building the team we need to ensure our perpetuation. Right now, we have three partners who are all the same age; that’s why we’re so pleased to be bringing in bright young people.” Stoltz describes some other initiatives the agency is pursuing. “We’re building a dedicated workers comp management unit; we have five certified work comp advisers and a certified work comp specialist in the agency now, which is a tremendous benefit to our clients, particularly in light of the current situation in work comp. We’ve also invested heavily in building up our risk management group, and we have two out of only a few Certified Safety Professionals in the entire area. The combined experience of our two CSPs alone is 70 years, so they’re a great resource for our clients,” he asserts. “The bottom line,” Stoltz says, is “if we’re going to be a professional services firm, we’d better have professional services to offer. That’s where we’re concentrating our resources.” * |
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