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MARKETING AGENCY OF THE MONTH Rewarding performance Outperforming goals leads to increased ownership in this Miami agency By Dennis H. Pillsbury HBA Insurance Group, Miami, Florida, was formed in 1999 through the merger of two agencies that trace their roots back to the early 1900s. The merger brought together apparently disparate entities, but they had a common focus of being seen as professional partners with their customers rather than as insurance salespeople. “It was a marriage of very different people,” says Ernesto “Tito” Freyre, chairman. “But we found great common ground,” adds Bill Beckham, president. One of the agencies, AmerInsurance, was founded in 1910 in Havana, Cuba, and continued to serve the Hispanic community when the Pantin family reestablished it in Miami in 1961. The other agency, Head Beckham Insurance, had been serving South Florida clients since 1932. Bill and Tito met at a company incentive trip in 1997 and found that their agencies had a lot in common that might make a merger feasible. They had the same automation system. They represented many of the same companies so a merger would give them some added leverage. And they liked each other. At the same time, their differences were complementary and could lead to increased opportunities and better service to clients. “For example,” Bill notes, “AmerInsurance had a number of younger producers who would help set the stage for perpetuation.” The two also felt that the melding of the cultural and professional diversity would result in a situation where “the sum is more than the parts,” Tito says. “We’ve leveraged our differences and turned them into synergies,” he continues. “We’ve been able to develop a culture where talents, income, and equity are shared.” Bill adds: “The word on the street was that, because we were so different, the merger wouldn’t make it six months. We’re still here.” And the results have been impressive. HBA Insurance closed last year with $17.5 million in revenue. In 1999, the combined revenue of the two agencies was $6.5 million. “And we’re on target to exceed $20 million this year,” Bill says. Meeting the needs “We view ourselves and present ourselves as professionals—like attorneys or accountants or architects,” Tito says. “We’ve done a lot of evaluating to determine the strengths of each of our individual people and have created teams to utilize those strengths to best meet the needs of our clients.” “A team might include a rainmaker, risk manager, and servicing producer, for example,” Bill continues. “Depending on the account, it also might include a person from personal lines or employee benefits if there’s a cross-selling opportunity. We still have one agent overseeing the entire account but involve different specialists where the need arises. Every account is shared in this way.” “We also have to meet the needs of our producers,” Tito adds. “We offer generous compensation that can result in ownership for our producers. We basically share equity through the book. Those who have brought value to the agency are rewarded with ownership. We now have a total of 14 shareholders whom we call partners. More than 90% of our volume is generated by our partners. Every three years, we give shares of the business to those who have outperformed their goals. In that way, the stronger horses get stronger and those who have not performed find their ownership diluted. “Another strategy that has been successful for us is to hook up our younger producers with seasoned producers on certain accounts,” Tito says. “One of our goals has been to bring more young people into the agency, and this has helped to assure their success.” “Our agencies had always been strong supporters of the community in which we do business,” Bill says. “We’ve been active in the Miami Rotary Club, the Coral Gables Chamber of Commerce, and the Convention and Visitors Bureau, as well as a number of charities. But five years ago, we added to that by establishing a golf tournament, the HBA Insurance Classic. About 60 people were involved in the first year with money going to two charities—Shake-A-Leg Miami and the Little Havana Activities and Nutrition Centers of Dade County. “Last year, the event involved more than 200 people and netted more than $100,000,” Bill continues. “Everybody gets involved. Our insurance companies sponsor holes and events. And it’s really done a lot to help the image of the insurance industry in the eyes of the community.” Shake-A-Leg provides water sports, education, and recreation along with classroom and other enrichment opportunities for those individuals most in need, with emphasis on disabled and disadvantaged youths. The charity partners with the City of Miami, Miami-Dade County Public Schools and more than 100 community organizations. Little Havana Activities and Nutrition Centers provides social services to disadvantaged persons in the South Florida area, with special emphasis on the elderly population. Last year, the Centers served more than 54,000 people. The organization offers congregate meals, home-delivered meals, adult day health care, counseling, transportation and in-home personal care, and respite services. Tito points out that the agency also volunteers in the insurance community. “Several partners have presided over the local Big “I” (Independent Insurance Agents of Miami-Dade). And one of our associates served as president of the Latin American Agents Association.” Tito continues: “Of course, we also support our company partners by sending them business that fits their marketing profile and offers them an opportunity for profit. We are at the gold, platinum or whatever precious metal represents the highest level with most of our companies, including the large national carriers.” Going the extra mile Although Hurricane Katrina and the devastation it wreaked on New Orleans has continued to capture the attention of the nation, many also remember that Florida “enjoyed” the attention of four major storms that criss-crossed the state a year earlier. “We had to do a lot of hand-holding with our clients and be the advocate for their claims,” Bill remembers. “One of our clients is a large food distributor,” Tito notes. “Fortunately, they didn’t suffer much in terms of physical damage, but their phone systems were down. We accommodated them with telephones and office space here. They were able to avoid losing sales, and as a token of their appreciation, they provided lunch for our entire staff. “We also had to deal with a lot of out-of-state adjusters who were naturally eager to settle claims quickly,” he continues. “We were there with our clients’ coverage forms to make certain they received proper compensation for their losses. In one instance, one of our clients had given up on recovering extra expense losses, but we continued to pursue that claim and ultimately got his claim paid.” “And, of course, we have our own catastrophe plan,” Bill notes. “Our building is west of the airport, away from the coast and has very few windows. All our records are backed up to an off-site computer. And we have a generator to provide power for the entire building during an outage.” Automation “Several years ago, we chose ImageRight as our document management system. In part, we use it to scan in all our mail—electronic mail as well as paper mail. ImageRight grabs the e-documents off our Exchange server and smartly routes them, as well as the scanned paper documents, to where they need to go, based on CSR or policy number, with minor human intervention,” Bill adds. “As it turned out, the workflow capabilities of ImageRight have made us more efficient. For example, a team leader can manage the policy checking process with a couple of mouse clicks. The team leader can electronically spot check a CSR’s workload and should it be too great, the team leader can reallocate some renewals and premium generating endorsements to another CSR who doesn’t have as great a workload at that point. We’ve become the prototype for agencies that use ImageRight, so ImageRight works closely with us as they develop new applications, both to their benefit and ours.” Tito continues: “Our automation capabilities have been used to benefit our clients. We’ve set up things so clients have the ability to issue their own certificates, for example. They also can get MVR reports. “We also use outsourcing services to improve our workers comp services for our clients. We review our clients’ losses every three months and project their experience modification before NCCI does. We’ve been able to quickly identify mistakes in the experience mods or the reserves and can work with NCCI and the companies to make the appropriate changes. This is a value-added that shows up in terms of dollar savings for our clients.” “Our people also work with our company partners on upload and download,” Bill points out. “We are continually working toward streamlining the insurance process so our clients are served quickly and efficiently whenever they need a change in coverage, obtain a certificate or a loss run, or get help with a claim.” HBA Insurance Group focuses on the middle market with premiums ranging from $50,000 to $2 million, Tito says, adding: “That’s where we stop for now. We stay in that niche just below the big boys.” Clearly, however, the agency is poised to move into that group and is well positioned to compete with anyone, regardless of size. That’s one of the reasons we are proud to recognize HBA Insurance Group as our Rough Notes Marketing Agency of the Month. * |
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