MARKETING AGENCY OF THE MONTH
Doing it right
New agency takes business from the big guys
By Dennis H. Pillsbury
It is rare that we recognize an agency that is only in its third year of business. But when that agency is recommended by a large client that used to be with one of the major brokers, we decided that we needed to take a look. And we were suitably impressed.
Scott A. Helmer started Helmer Risk Management, Phoenix, Arizona, in 2006 and now has premium volume in excess of $7.5 million and will finish the year with more than $10 million. And he’s done it all with exceptional service—service that is an outgrowth of his knowledge of the niche area on which he focuses.
Scott was born with the entrepreneurial spirit, apparently inherited from his grandfather who ran a successful printing and advertising company in Chicago. “I looked up to him growing up and always envisioned myself as a business owner,” he says. “As soon as I got out of high school, I started my own pool construction company. I ran that for a few years and then sold the business after a friend and mentor, Allan Rosen of Rosen Investment Advisors, Ltd., Phoenix, recommended that I get into the property/casualty business. I went to school with his son, Matt. Allan not only encouraged me to get into the business but also helped me capitalize Helmer Risk Management.
“I started my insurance career at a personal lines agency, Foothills Insurance Agency in Chandler, Arizona, where I got my feet wet and learned the basics from the owners, George and Tammy Markovich, who were very gracious and helpful.
“I then searched for an agency with more complex commercial risks and found Hill Insurance Services in Scottsdale, where the principal, Mitch Hill and his son, Brent, served as mentors while I learned the business. Mitch and Brent also were willing to sell me the business I had developed when I left the agency. I concentrated on the types of risks that I already knew something about—construction—and they expanded my knowledge and let me work on some of the big accounts, including an oil and gas giant that needed strong risk management services. I got to see first hand how complex those risks can be. I will forever be grateful to them for their willingness to teach me the business,” Scott continues.
Because of that, Scott was able to start his own shop with around $1 million in premium and appoint-ments from two companies that liked his business model.
It was a simple business model on the surface, but it proved difficult to implement. Scott planned to go after pipeline, energy and other construction-related accounts in the $100,000 to $2 million range and take them from the big brokers who, he had heard from friends in the business, “were not providing personal service. One of my first accounts was PDI Construction here in Phoenix.” PDI specializes in construction of underground infrastructure.
“It was a solid company with a good revenue stream that was starting to grow aggressively. The company’s management found that, despite having a broker, it was really having to manage its own insurance program.”
Scott went into the company and helped set up strong loss control programs. He also added several coverages that they did not have, but that were really necessary for companies that specialized in working with dry-utility companies, which was one of PDI’s main client bases.
“Right from the start,” Scott says, “I determined that I would never sell based on price. I was going to focus on providing strong risk management services by becoming an expert in a very narrowly focused market. That being said, the fact that I not only worked with PDI to improve its loss control efforts and added needed coverages, but was able to reduce their insurance costs by more than 10%, was a plus.”
Marketing is key
The focus on two or three very narrow niche markets has allowed Scott to become an expert in those fields, but that wouldn’t mean much if organizations in those fields didn’t know about it. He is an active member of the Distribution Contractors Association, the Pipe Line Contractors Association and the Interstate Natural Gas Association of America. “I serve on various committees of those associations and also contribute articles on subjects that are important to members. I have really immersed myself in these areas so I can provide the best services and coverages.”
By putting himself out in front at those associations, Scott not only has been asked to contribute articles and speak at association events, he has had articles written about his agency in Pipeliner’s Hall of Fame News, World Pipelines and Ethanol Producer Magazine. In these magazines, the articles are highly complimentary of Scott’s personal service and understanding of the business.
In the article in Ethanol Producer Magazine, one of Scott’s clients reports that Helmer Risk Management was able to “improve coverages” and save the client “nearly 30%.” That client recommended Scott to another company, this one based in Parma, Michigan, where Scott performed a careful analysis of all the company’s insurance coverage and, once again, was able to improve coverages and “reduce the overall annual expense for insurance by 25%.”
All of these articles, as well as those he has written for the associations, appear at Helmer Risk Management’s Web site (www.HelmerRisk.com).
It is thanks to this marketing effort and word of mouth recommendations that Scott has been able to land business throughout the United States. “Ninety-five percent of my clients are outside the state of Arizona. These are multi-state and even multinational firms that are used to working remotely with suppliers,” Scott points out. “I do go to see them once or twice a year, but those are mostly good-will visits. I also get to see many of them at association meetings.”
Access to other experts
Although Scott has immersed himself in his clients’ niche areas and is the sole provider of their insurance coverages, he also understands the need to partner with other experts in areas such as loss control or workers comp. Scott provides many of the basic services for his workers comp clients as well as analyzing insurance needs and writing all the appropriate coverages, but he turns to his consultants when there are especially complex problems.
“I’ve partnered with two or three loss control consulting companies that work with my clients. It’s on my dime. I always tell my clients that there won’t be any hidden costs and I intend to keep it that way. These companies will spend a few days on the job site and break down the company’s processes and then tune them up to operate more effectively. It’s been a real strong selling point. My clients like the fact that they receive true independent third-party advice.
“I also had a client with a real workers comp mess,” Scott continues. “He needed to get his mod down for a variety of reasons, one of the most critical being that a contactor in the oil and gas field will not even work with a subcontractor that has a high mod. I partnered with a guy who ran the workers comp section for AIG, and he did a terrific job getting the mod down.
“My model is to solve problems for my client,” Scott explains. “With the kind of work that my clients are doing, they need someone who understands their business and can handle all of their risk management concerns. That is my goal. I won’t take on someone who is just looking to change or shopping for a low price. This is a partnership between Helmer Risk Management and the client.”
He adds, “Of course, there are people and systems back at the office who make all this possible while I am out growing the agency. I have two CSRs and a part-time bookkeeper who make certain that clients receive first-class service and quick response to their needs. We are completely paperless with dual monitors and provide most of our services online, except when it comes to certificates. The certificates are so complex in this area that we don’t have that online. Each one has to be carefully manuscripted and requires personal contact.”
Strong ties with markets
“Because I worked at Hill prior to starting up my own business, I was a known commodity and was able to attract two of the largest writers in this niche area—AIG and Zurich. There are only a handful of companies that write business in my specialty area. They look for quality business with good loss profiles and appreciate my efforts to work with my clients to improve their loss experience.
“I also work with a number of wholesalers, especially for peripheral lines. A knowledgeable wholesaler can be an invaluable resource because of their experience with unique coverage needs. They have been an essential ingredient in my success.”
Not surprisingly, considering the size of clients that he writes, Scott now is investigating the alternative market. “I have one client that is looking to determine whether a captive is feasible. He has the good loss profile and strong risk management controls that would make him an ideal candidate for a captive. We’re investigating that right now, and this is a perfect time. The traditional market is relatively soft, so he’s not feeling pressure to make a quick change. We can take our time and do it right.”
We often talk about the future of the independent agency system and occasionally bemoan the fact that we haven’t been able to attract the best and the brightest into the insurance industry. Clearly that isn’t always the case. Scott Helmer is a perfect example of an individual who found insurance to be an opportunity to be in his own business and help clients. As he says, “I really enjoy what I do, helping people out. This is a great business.”
The future of our system is indeed bright with people like Scott in it. We are pleased to recognize Helmer Risk Management as the Rough Notes Marketing Agency of the Month. *