Agency of the Year winner continues to change with the times Senn Dunn emphasizes loss control, sales contests to maintain growth momentum Although less than a year has passed since Senn Dunn of Greensboro, North Carolina, first appeared in the pages of Rough Notes as our November 2005 Marketing Agency of the Month, positive changes have occurred that make it obvious as to why they are the newest Marketing Agency of the Year. The agency hired Drake Evans, a loss control consultant with many years of experience in several industries, to help form a loss control and claims department that will “bring an extra level of service to clients,” says Tim Ward, CPCU, CIC, executive vice president and personal lines manager. Drake is paired with claims specialists Cecilia Foy-Dorsett and Cathy Cartisano. Cecilia oversees claims for commercial lines customers and Cathy oversees claims for personal lines clients. “We want to help clients on both the front and back ends,” Tim comments. “One of our most important jobs has always been to help our clients avoid claims in the first place. We brought in Drake to make this an even greater emphasis in the agency. At the same time, as many before me have noted: ‘Accidents still can happen; that’s why they call them accidents.’ So we also have to have people in place who will make certain that our clients’ claims are handled quickly and fairly. We’re already working on an advertisement that will emphasize this value-added service.” The results are in The Agency of the Year recognition wasn’t Senn Dunn’s only achievement this year. The agency also closed out its sales contest with everyone a winner. In the November 2005 article, Senn Dunn President T. Gray McCaskill described its current sales contest which featured a golf theme where each producer to reach par 72 ($72,000 in revenue from new or referred business) got to wear a green jacket at the Monday morning sales meeting and qualified for a trip to Kiawah Island Resort, near Charleston, South Carolina. The winners will spend four nights at the resort, with daily activities that will include, not surprisingly, golf as well as other sports and recreational activities. The par 72 contest emphasized the teamwork approach that characterizes Senn Dunn. “Producers are encouraged and rewarded for referring business to other departments in order to round out the account,” Tim notes. In fact, the previous sales contest focused strictly on referred business. That contest featured yardsticks that were taped to every producer’s door with inches marked off as they approached the goal of $36,000 in revenue from referred business. The result was just under $1.2 million new revenue from current clients. This year’s contest rewarded producers for bringing in new business from new clients as well as referred business from current clients. And, when the 18-month period of the contest concluded on March 1, 2006, the agency had a total of $2,675,000 in new revenue—$1,545,000 from new clients and $1,130,000 from current clients. Twenty-four producers participated in the contest and 24 producers qualified for the trip. And, to recognize their contribution to this success, the sales support staff also is going to Kiawah. The lead person got 286 strokes and, in this contest, as opposed to an actual golf tournament, the more strokes the better. There were bonuses every time a producer lapped the course. The number one producer of business from new clients produced $246,000 in revenue and the leader for new business from current clients referred $142,000 in revenue. The new revenue came from all areas, with benefits and commercial lines getting the largest share, although there also was significant growth in personal lines. “It’s amazing what people can accomplish when there is a goal to reach,” Tim says. “It was a positive motivator that emphasized reward rather than punishment. That’s the way we like to do everything. Our people enjoy being team players and like to see everyone succeed. And that goes right up to the top. We’d love to see every producer qualify to be an owner of the company. We’ve also rewarded several nonproducers with ownership because of their outstanding contribution to the agency.” Open communication, rewards rather than punishments, and treating its people with dignity and respect are hallmarks of Senn Dunn and reasons it was the November 2005 Marketing Agency of the Month and, now, the well-deserved recipient of recognition as Rough Notes magazine’s 2005 Marketing Agency of the Year. A Tale of Two Markets The day after the Rough Notes Marketing Agency of the Year award presentation, members of the magazine’s editorial advisory board met to discuss issues affecting the agency business, including market conditions. Agent members of the Rough Notes editorial advisory board describe the property/casualty market as both hard and soft at the same time.
These agents, representing high caliber firms that have been honored as the magazine’s Marketing Agency of the Month, represent a geographic spread throughout North America, and it is geography, they say, that increasingly is defining the state of the P-C market. Market hardening in coastal areas, and areas adjacent to coastal areas, is in sharp contrast with softening elsewhere. Last year’s Gulf Coast hurricanes have driven a re-deployment of insurer capital out of these and other coastal states and into more benign U.S. states and Canadian provinces. In states with coastal exposures, the hard market will sometimes spill over into adjacent non-coastal areas, these agents say. This angers insureds in these adjacent areas, who point out that they are paying for someone else’s problems. However, further inland, insurers are cutting rates. Members of the Rough Notes board say that by establishing their firms as risk management consultants, they are more able to cope with the competitive strains and pains of the market—both soft and hard. Arranging insurance is only part of what they do for clients, and whether they are generalists or specialists, they stress value-added services and multiple client contacts throughout the year. Beyond the influence of geography, there are lines of business that are undergoing their own fluctuations. Residential contractors was cited as problematic. One agent who had two residential contractor accounts representing $1 million in premium was quoted a 25% increase for a recent renewal.
A market in flux Confirming what members of the Rough Notes editorial board have been experiencing is the fourth quarter 2005 market survey released by The Council of Insurance Agents and Brokers (CIAB). The Council represents the nation’s leading domestic and international commercial insurance brokers, who annually write 80% of the nation’s commercial property/casualty premium. According to the CIAB’s Commercial Insurance Market Index Survey, “Although the overall commercial property/casualty marketplace has seen little impact from the severe 2005 hurricane season, coastal property is experiencing a sharp increase in prices for wind and flood coverage.” A broker from the Southeast was quoted as saying: “Two markets exist—coastal property (and that definition has expanded north) and the rest.” Asked whether they had seen pricing changes as a result of Hurricanes Katrina and Rita, 58% of the survey respondents said no, while 42% said yes. “Some lip service to market tightening, but little evidence of it,” a Midwestern broker was quoted as saying. “Overall, the market continues to be competitive.”
That’s definitely not the case in coastal areas that are subject to flooding and windstorms, the CIAB survey showed. In these areas, capacity is shrinking, wind deductibles and exclusions are rising sharply, and underwriters are looking carefully at risks, the survey noted. Because of wind code compliance issues, older commercial buildings are receiving higher quotes than newer construction. The survey showed that even with higher deductibles for wind coverage, premiums were still increasing. “Huge reductions in wind limits,” one broker was quoted as saying. “Fifty to 100% increases in property rates for coastal accounts. Other property accounts flat or 10% increases.” New cycle, new challenges Traditionally, the property/casualty insurance market has tended to expand or contract as a whole, with periods of cutthroat competition being followed by sharp tightening as insurers seek to swim to the surface of a sea of red ink. The last five years, however, have seen the emergence of markedly different patterns in capacity and competition as insurers and reinsurers struggle to understand and respond to a vastly altered risk landscape. The terrorist attacks of 9/11, the destructive hurricanes of 2005, and a host of other concerns pose daunting challenges for agents, carriers, and clients. *
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