MARKETING AGENCY OF THE MONTH Geography, shmography Hobson Insurance writes $5 million in premium in town of 265 people By Dennis H. Pillsbury One of the most interesting aspects of interviewing agencies for recognition as our Marketing Agency of the Month is finding out how many different ways entrepreneurs have found to grow and expand their business. No matter what the obstacle, it seems that these people always find a way to market themselves and overcome restrictions placed on them by location, competition, market conditions or other barriers. And that certainly is the case with Cherokee Capital, Inc., dba Hobson Insurance, in Hobson, Montana, a town of 265 people. Dale Longfellow and his wife, Kathy, established the agency in 1996 when they opted for small town life and moved from Billings to Hobson.
Dale brought with him a wealth of knowledge about insurance and national programs that he had gleaned in his 40-plus years in the industry. He has been a licensed insurance agent since 1965 and is currently licensed in 43 states. His career began with C.I.T. Financial Services, where he eventually became the youngest manager with responsibility for C.I.T.’s largest office, Denver. His training encompassed all lines of insurance, but his penchant was for property/casualty coverages. So it was that he became a producer for the Insurance Exchange in one of its satellite agencies in Billings, Montana. It was there that he handled large commercial P-C accounts for nearly 10 years and developed an expertise in large national programs for buying groups. Five of his large national accounts became the cornerstone for Hobson Insurance. He eventually sold off the two largest accounts and kept the three most profitable groups—Sports, Inc., Worldwide Distributors, and Athletic Dealers of America. Since that time, Hobson Insurance has added seven additional buying groups to its national program business and now has written premiums of nearly $5 million. Giving back to the community The agency also provides coverage to the citizens and businesses of Hobson, as well as giving back to the community that has provided the Longfellow family with “such a wonderful lifestyle,” Dale notes. “We’re really grateful to be able to be here. We enjoy being part of the community.” Dale is in his second term as mayor of Hobson and plans to run for a third term. His daughter, Misty Longfellow Kriskovich, CIC, who works at the agency as manager of the commercial insurance department, serves on the school board, is president of the Hobson Community Club, and on the board of the Central Montana Safe Kids/Safe Communities Coalition. “You have to give back to the community,” Dale declares. “Misty has a wonderful opportunity to listen to young people and try to respond to the changing educational needs that have arisen over the years.”
In addition to being mayor of the town, Dale also serves on the board of Wells Fargo Bank in Lewistown, is chairman for the Central Montana Medical Center Foundation, and is chairman for the Central Montana Regional Water Authority. Dale recently purchased the American Legion building next door to his business on Main Street and donated it to the Friends of the Hobson Library. The Friends plan to move the building to four lots it owns near the present library on Main Street and open it as a museum. Once that move is complete, the agency plans to build an addition to its building because “our business is growing and we have outgrown our present structure,” Dale says. In addition to Dale, Kathy, and Misty, the agency also employs Kristy Longfellow-Hodik, CIC, Dale and Kathy’s other daughter, who serves as head of sales and marketing at Hobson Insurance, and two non-family employees, Christy Aamold and Carol Horan, both of whom are licensed agents. Just hired are Betty Schramm, who has 10 years experience with State Farm, and recent college grad Theresa Lemming. Why it works “The beauty of our national buying group programs is that they’re already underwritten,” Dale explains. “There’s a triangular arrangement where buying group members go to shows twice a year to purchase products at a discount because the buying group pays the bills. The buying groups carefully select their members because they’re on the hook for the purchases, so the pre-underwriting already is done for you. That’s what makes this work. Associations take everyone so there’s always the danger of adverse selection.”
“The buying groups are always looking to provide members with value-added benefits, such as insurance. That’s how I first got involved,” Dale remembers. “My mom worked for and retired from Sports, Inc. I got to know the management and 20 years ago they asked me if I could do a program. I hunted around and found a couple of carriers that were interested and put a program together. You need to have more than one carrier for a national program like this,” Dale maintains, “because if you have a big loss, your one carrier can dump you and you’re finished. You need to know your carriers very well so you can send them business that fits their appetite.” One example is in the sports field where some stores have gun sales. “There are carriers that won’t take any trigger sales and others that will only take stores where trigger sales represent less than 20% of total receipts.” Dale continues, “Ninety percent of our book is BOPs, with an average premium of around $6,000 to $7,000. It’s a nice little policy that’s understood by both the insured and the insurer. We try not to reinvent the wheel for the carriers and use standard ISO forms whenever possible. We also invite our carriers to come to the shows and meet the business people for whom they are providing coverage. They are honest, hard working folks who are perfect risks. We want our carriers to see that.” The same but different
“Each buying group has its own characteristic,” Dale points out. “It’s important to know the differences so we can match the group with the carrier. For example, the businesses in Sports, Inc., are Mom and Pop establishments. Other groups may have multi-location stores that have different underwriting considerations. Of course, someone at the agency attends every show so that we get to hear firsthand about any issues the businesses may be facing and so that we’re seen as supporting the group. Since each group has a show every six months, this means our acquisition costs are a little high, but our loss ratios are low, so it pays off. “We really believe in education,” Dale continues. “Attendance at the shows provides education about the clients, but we also make certain that all of our people are educated about the insurance business. We have to stay on top of what is happening in the marketplace so we can take care of our clients. It’s important to remember that you’re not just dealing with one retail store, but with the headquarters as well. Any problem must be resolved quickly because one customer can actually represent a thousand or more customers. You must surround yourself with smart people. We can’t afford an E&O claim and, so far, we’ve never had one. “You can tell that this is a business where everyone talks to everyone else. Most of our business comes in through word of mouth,” Dale notes. “All the people who are members of buying groups have friends who are in buying groups and they tell them about our good service. That’s why it’s essential that we handle any problems quickly and fairly so the word about us is always positive. “Of course,” Dale continues, “we do a lot over the Internet. Retailers do nearly everything electronically and they can relate to that type of communication. We have applica-tions online so a retailer can apply for coverage electronically. (On the Monday morning I spoke to Dale, he already had several applications for coverage.) Giving back to the industry
Of course, none of this would have been possible without the support of the insurance industry. “We appreciate all that this industry has done for us and try to give back as much as possible,” Dale says. He will be serving as president-elect of the Independent Insurance Agents Association of Montana this year in place of the current president-elect who traded presidential years with Dale due to a family illness. (Dale was vice president of the association.) Dale also is a past president of the Montana Insurance Education Foundation. Kristy serves on the board of the Montana Young Agents. Just last month, Dale attended the Big “I” National Legislative Conference in Washington, D.C., in order to support his fellow agents and to make his voice heard. Thanks in large part to Misty’s efforts as manager of the commercial insurance department, and with the help of Christy Aamold, Hobson Insurance was selected as a 2004 Best Practices Agency by the Independent Insurance Agents and Brokers of America. Misty also was recognized for her outstanding customer service as the Montana CSR of the Year and the National CSR of the Year in 2005. Hobson Insurance exemplifies the entrepreneurial spirit shown by every agency that appears on the cover of Rough Notes. It has succeeded despite the challenges of its geographic location. Like all our marketing agencies, Hobson didn’t see a problem; it saw an opportunity. We are pleased to recognize Hobson Insurance as our Marketing Agency of the Month. * |
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