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INTO THE RING Despite stiff competition, New York agency owner Michael Cracco has come out a winner By Elaine Tolen Growing up on New York's Long Island, Michael Cracco and his best friend, Chad Eskanazy, were inseparable. They were high school football and wrestling stars. Their high school yearbook quipped under each of their photos: "Where Mike is, you'll find Chad"; "Where Chad is, you'll find Mike." Because they were together so much, it's no surprise that Mike got a pretty good picture of the insurance business from Chad's father, Al Eskanazy, owner of Morstan General Agency in Lake Success, New York.
After high school graduation in 1992, Mike eagerly accepted a job offer at the large P&C wholesaler. Like says that Al's financial success was one aspect of the insurance business that he found attractive. At Morstan, he worked his way "up the ladder" while going to night school at Stony Brook University. Mike started out as a file clerk, then worked in the mailroom before moving to the underwriting department, where he worked for several years. "Now that I'm on the retail side of the industry, my experience as an underwriter helps me appreciate the role of both sides," says the now 31-year-old owner of Completely Covered Insurance in Massapequa, also on Long Island. While working at Morstan, Mike got to know Dennis D'amico, owner of Sprint Insurance Agency on Staten Island, because Mike was his main underwriter. "Dennis is my best friend and mentor.We share ideas, problems, referrals, everything. In fact, we call each other 'partners' even though we have no financial interest in the other's agency," Mike says. "He inspired me to go out on my own. He invited me to buy into his agency but said that first I needed to learn the retail side of the business. 'If you like it, you can stay here or go out on your own.' "
During his "intensive year of training" at Sprint Insurance, Mike says that Dennis taught him how to deal one-on-one with clients, companies and employees. In 2000, Mike was ready to start his own agency. In one of the most difficult insurance markets in the country, this was no small feat. "New York has always been a very competitive area, not to mention the most highly regulated in the country," Mike says. "I went out on my own during the hard market," Mike continues. "There was a more level playing field in the industry. A lot of carriers had pulled out or placed moratoriums on new business. You worked hard to get a few clients.Then after 9/11, all industries in New York-not just insurance-really felt the brunt economically." When he started Completely Covered Insurance Agency in 2000, Mike had just a few "side clients" like friends and family, but no real revenue stream. "I really started the agency from scratch. I was fortunate to be in a high-traffic area," Mike explains. "The NY-YIP (the New York Young Insurance Professionals, an affiliate of the Professional Insurance Agents of New York State, Inc.) helped pave the way, by providing opportunities to meet carriers and giving me marketing strategies." Starting his own business "took a lot of knocking on doors," Mike remembers. "I was young, so I had to really sell myself. I took-and still take-an educational approach by selling the concept of the independent agent. I show clients what the agency can do for them; that I can be their agent for nearly every aspect of their lives." Through e-mail and newsletters, Mike keeps clients abreast of agency news as well as industry happenings. Through these vehicles, Mike lets them know "how I'm keeping up. For example, I might share what educational meetings I've attended or who I've been meeting with on the political scene. I might include photos of myself meeting with state senators to lobby the extension of TRIA (Terrorism Risk Insurance Act), which is very important in New York," he explains. "I think it makes clients feel secure that I'm actively keeping up with the industry." Completely Covered's business is a mix of personal and commercial; 65% personal and 35% commercial lines. Most of the personal lines business is local (Long Island), while the commercial business extends into New York City.With the agency staff capable of handling the personal business, Mike is free to concentrate on the commercial side. He represents a variety of clients, including bodegas (small grocery stores that are run by and cater to Latinos), dry cleaners, limousine services, and corporate customers in New York City's financial district.
Besides Mike, there are four fulltime employees, one broker and three customer service representatives, several part-time staffers, plus a "volunteer employee"- Mike's father, Benedetto, who is a retired Port Authority detective. "From the beginning when I couldn't afford to pay employees, Dad came in every day to answer the phone, help with accounting, bring me lunch or whatever needed to be done," Mike remembers. "He has been such a big help. Even now he comes in once a day to do things like handling commission checks and bank reconciliations." The agency staff is trilingual: English, Spanish and Polish. "One of the towns that borders ours is predominantly Polish, and it's easier for some clients to speak their native language," Mike explains. "Knowing Spanish is also important to be able to serve a diverse clientele." While the agency does gain new customers because of its high-traffic location, 20% to 30% of Mike's new business now comes from referrals from Network Alliance, a networking group that he and a real estate broker friend started three years ago. "We were looking for new prospects and warm leads," Mike says. "I tell a client who is looking to refinance, for example, that I have a friend in the mortgage business who can help. I ask the client if my friend can call him or her," Mike explains. "If my clients have faith in me, they're going to have faith in the professionals I recommend." In addition to Mike and the real estate broker, the group consists of a real estate attorney, accountant, contractor and mortgage broker. The group meets twice a month for breakfast to share names of prospects.
Mentoring young people While Mike was working at Morstan, Al Eskanazy encouraged him to become involved in the NYYIP. "He understood that young people are the future," Mike says. Even with a full plate of day job and evening college, Mike joined and, over the years, has taken on more responsibility with the group. He is currently serving his second year as NY-YIP chairman. Five years ago when Mike joined the YIP, he says the group was not very active. He and others in YIP held focus groups around the state, finding out what young agents wanted and needed from the organization. "The feedback was that they wanted more networking in regional settings. They wanted to meet more company people as well as other industry leaders," Mike says. At that time, according to Mike, there were two to three regional meetings during the year. Now he says there are eight to nine such meetings. Many times an educational seminar is also on the agenda. "I have the best board of directors anyone could ask for." The NY-YIP board is comprised of past NY- YIP presidents, agency owners and company personnel. "I've met a lot of company people, other young agents and industry leaders through YIP," Mike says. "My advice to younger people is to surround themselves with good people in the industry. As they move to another company or agency, they've expanded their Rolodex." One of the NY-YIP projects currently in development that is close to Mike's heart is the student recruitment program which dovetails with the Agent Staffing Assistance Program (ASAP) that PIANY launched last year. Mike explains that "ASAP works to help agencies recruit and develop strong staff for the industry. The NY-YIP see an opportunity to build the industry's image and help from the perspective of those looking to start a career, but may not be thinking about insurance (yet). "If you don't have a friend or family member in the insurance industry, you don't know anything about the possibilities. None of my high school or college classes mentioned insurance as a career to consider," Mike says. "There is so much potential to move up. I was lucky because I did know someone in the industry, and I want to help educate students about the industry because I feel I owe it to them." According to Mike, the program is being designed to teach the importance of insurance and to change the negative perception that many people have of the field. "We explain to students why young people have higher auto insurance premiums, and how insurance helps them in all areas of their lives," he says. "Just as the association [PIANY] has guided and mentored us, we want to do the same for younger students." As YIP chairperson, Mike serves as liaison to the PIANY board. He is also on the association's RAP Committee (Regional Awareness Program), which hosts conferences around the state that feature networking opportunities through company functions and other activities, educational seminars with a variety of speakers, and trade shows. At each RAP, the YIP holds separate meetings for young agents to network and recruit. Mike has worked for several years on the Long Island RAP and Hudson Valley RAP, and has recently started assisting the MetroRAP (New York City).
Encouraged by family Mike has been married for six years to his high school sweetheart, Jennifer. "My wife is definitely my biggest supporter," Mike stresses. "She allowed me to take the time and opportunity to start my own agency. Sometimes I'd be at the office until 11 p.m. or midnight, but she still urged me on." Last July, the Cracco family grew with the birth of Michael Cracco, Jr. "It is important to make sure you're there for your child," says Mike. "The agency staff is now large and capable enough to take care of things so I can spend more time with my family. The key is to surround yourself with an excellent staff of people, which I have." Being an agency owner/producer and young agent leader doesn't leave a lot of extra time for Mike. What little free time he has is spent with family. In the summer, the Craccos especially enjoy going out on their boat to Fire Island. Besides working with his father, Mike is close to the rest of his extended family. "My mother's advice to her three boys was 'always stay close.' Her dedication to the family is the reason why we're friends and live successful lives," he says. Playing a Sunday morning game of football is one way Mike stays close to his two brothers, Joseph and Anthony. "As children, we played together almost every day," Mike continues. "Joe, our older brother, was an excellent athlete; he inspired both Anthony and myself to be the best." Looking at the future In the current softer market, Mike observes that "consumers are happier. Companies really want your business." But that business-in New York, at least-is threatened as TRIA is set to expire on December 31, 2005. "Companies will not want to do business here if TRIA doesn't get extended," Mike asserts. "I have been very active in working with PIA to lobby for TRIA." Mike continues, "Agencies in other parts of the country may not see the importance of TRIA as much as agencies in big cities. But there will be different issues that affect other regions of the country more than New York, and we'll support those agencies and areas." Despite the challenges facing the insurance industry, Mike is optimistic about his future. "My goal is long-term profitable growth. I want good clients and good companies, which means being selective and not trying to write every customer. I don't want to grow too big. As long as my family and staff are happy, I'm happy."
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