Marketing Agency of the Month
Creating a new paradigm
McCart Group opts for consultative selling only
By Dennis H. Pillsbury
When you’re located in the highly competitive environs of Atlanta, Georgia, you’re going to be facing off against all the major brokerage firms as well as other independent agencies. So, you really need to develop a unique value-added proposition that will stand out from the crowd—something that will help alleviate the pain being experienced by employers, regardless of where that pain happens to be located.
As Jeff McCart, principal, The McCart Group, Duluth, Georgia, points out, “That pain is not on the property/casualty side today. Fortunately, we do much more than just procure property/casualty insurance for our clients. We also offer employee benefits, and human resource and payroll administration—areas where many employers are experiencing some degree of pain. And on the property/casualty side, we work closely with our clients to help reduce or eliminate losses.”
The McCart Group traces its roots back to October 1, 1971, when Jeff’s father, Joe McCart, established Joe McCart Insurance Agency, Inc., as a traditional property/casualty insurance agency. Joe is still active in the firm, and serves as president of McCart Insurance Agency, Inc. Jeff majored in Risk Management at the University of Georgia and joined the firm in 1985.
Joe, Jeff, and Steve Needle, who joined in 1992 as president of the new Employer Services division, realized that the agency needed to provide a complete suite of risk transfer and risk mitigation services. In short, “we needed to listen to our clients and respond to their needs better and faster than our competition,” Jeff says.
Political pressures
The Employer Services division was established in 1992 to help employers who were concerned about health care reform. “The health care industry responded to pressure from Washington by establishing a number of new entities designed to reduce health care costs,” Steve remembers. “Our commercial property/casualty clients were telling us they needed help understanding the changes and deciding on the best options for their companies. The HMO concept was pretty new and a lot of employers were having trouble explaining to their employees just what was happening. They also were concerned that a misstep could result in legislation from Washington.”
When the Employer Services division started, The McCart Group decided on the first change in the traditional paradigm. “Jeff and I visited every client as a two-man team. It often just meant that one of us was simply introduced as the guy who took care of property/casualty or employee benefits, but it started a cross-selling theme that has permeated the agency since then.”
Today, Jeff points out, “The majority of our clients have both their property/casualty and employee benefits coverages with us. Our Employer Services division now accounts for 29% of our total revenues of $12.5 million, and that is expected to grow as double-digit growth in that sector continues, while the soft market has resulted in single-digit growth in our property/casualty division.
“We’ve never had a drop in P-C revenues,” he continues. “However, last year’s 5.5% increase was our smallest ever, and this year is not looking any better. Many of our clients are receiving double-digit decreases in their workers comp premiums as a result of lower payrolls, as well as significant reductions in other property/casualty lines.”
P-C services expanded
As cross-selling of employee benefits began to progress, the agency added another service to cement its relationship with clients. In 1994, “we got focused on outsourced risk control and loss prevention services,” Jeff says. “This once again represented a response to the needs of our clients and we significantly enhanced our offerings so we were unique in the marketplace.
“We established an engineering practice group, staffed with seven risk control experts, including specialists in OSHA compliance, DOT compliance and environmental consultants,” he explains. “This group provides loss control audits on a fee basis. Some examples of services provided are ‘mock’ OSHA audits, industrial hygiene assessments, and on-site safety planning and training. We have several bi-lingual safety consultants; this is to meet the demands of our clients and today’s labor force.
“The majority of our clients utilize this service. In fact, last year this group traveled 200,000-plus miles for one of our clients, visiting their facilities in over 40 states and Canada. It is part of the glue that holds the relationship together. Our clients recognize that it is not just the soft market that has resulted in lower rates, but the fact that their loss profile is excellent. In addition, many of our clients have large deductible programs, so reductions/eliminations in losses go directly to their bottom line.”
Jeff continues: “We don’t want to duplicate those services that insurance companies do well, and paying claims is an area where the companies we represent do an outstanding job. However, they sometimes don’t do a good job of claims adjudication, so we have a traditional claims management service that we provide to clients when the need arises.”
No annual clients
“Since we have positioned ourselves as risk management specialists,” Jeff says, “we have removed ourselves from bidding for clients who are just looking for an annual quote. Almost all of our business comes from referrals and we ask for a five-year commitment up front. In return, we provide an audit of their risk management needs that is far more comprehensive than an insurance company audit. It often lasts two days and will look at all aspects of risk within the company.”
The audit serves to identify not only areas where gaps exist and additional coverages are needed, but areas where potential savings can be realized through enhanced safety procedures, implementation of wellness programs, stronger return-to-work procedures, utilization of deductibles or self-insurance, improved payroll administration, coordination of benefits and so on. “We often identify areas of ‘pain’ that fall outside the traditional insurance purview,” Steve notes. “And, in most cases, we either have the expertise in-house to help alleviate that pain or we have established partnerships with companies that can do so.”
For example, Steve continues, “We generated value-added services in the human resources and benefits administration area after hearing from clients about the problems they were having in these areas. But we took this knowledge beyond the bleeding edge by offering staff augmentation for those clients. We have 10 people who we can provide to clients on a part-time, full-time or project basis in those areas.
“They can go in as troubleshooters to help fix what’s broken or simply work one or two days in areas where a customer needs support, so the client can focus on their core business,” Steve adds. “This allows our clients to properly align their employee resources. We’ve also established a relationship with a national payroll administration company where we are a reseller of their services. Again, this was in response to our clients’ needs.
“It is interesting that these services have been the starting point of our relationship with some of our clients,” Steve says. “It can help us get in the door and eventually become broker of record for their insurance. Of course, it is vital that through this process we remain neutral. We exclusively focus our efforts on the HR needs. We never want a client to feel that the people providing HR or other services ever influence the insurance purchase decision. Ultimately, though, we often find ourselves well positioned to address needs in the insurance area.”
Helping self-insured clients
“Many of our large clients are self-insured for some or all of the employee benefit offerings,” Steve says. “One of their needs was for actuarial support to provide financial forecasting, IBNR requirements and other actuarial services. We partnered with a national actuarial firm and created a suite of products called Benefits CFO™ for customers of all sizes. We are able to offer this on a cost-effective basis since we can repeat many of the services over a large number of clients. In addition, we are offering this product through other agencies in order to increase the penetration.”
Steve continues: “We also are working to integrate some services across all lines. We provide leave management integration inside employer services; work with clients to incorporate wellness into the workforce; have programs designed to alleviate presenteeism, and so on. We’re always looking for ways to take existing services and use them to enhance loss control or mitigation in other lines of business for the benefit of our clients.”
It’s the people
“In the final analysis, what we really are selling is our people—their knowledge and their expertise,” Jeff says. “We have 100-plus people who listen very well and really know what they are doing. That’s the reason we are successful and will continue to be successful. The changes we have implemented all came from our people. They listened to what clients wanted and needed and offered ideas about ways we could fulfill those needs and wants. That’s not to say that everything we have tried has been successful. We’ve also learned from some failures. But we keep trying and we maintain a focus on our clients.
Of course, we want those ideas to be developed from a knowledge base that increases the odds,” he notes. “For that reason, we encourage learning and have invested heavily in education. We sponsor multiple in-house training sessions for our employees every year. We are always striving to educate our team members so ultimately they are best equipped to serve our clients. We actually ask our people, ‘Did you learn something new today?’ and want them to always be able to answer with an emphatic ‘Yes.’ Our industry is changing rapidly and our clients are experiencing the same level of change. We need to be dynamic.”
Jeff continues, “You just have to look at how the economy has changed from national to global. It is no longer just the large, complex accounts that have international exposures. Nearly every enterprise is now involved. That’s one of the reasons we’re very pleased to be the exclusive Assurex Global partner in Georgia. This has allowed us to provide coverage and service around the globe as our clients have expanded into other regions. It also has allowed us to share best practices with the best privately held firms in America. The relationship with our other Assurex Global partners has been very helpful to the growth of the firm.”
Steve adds: “We have a tenured group of people. Many have been with us for a decade or more, and they are continuing to change and grow. We really have great people who want to work in this atmosphere of continually finding better ways to serve our clients. We have virtually no turnover.”
Investing in the future
“While no one knows precisely what is going to happen in the future, we have taken steps to prepare for our next leap forward,” Jeff says. “Over the last 24 months, we have invested in professional management. We have brought in people who are used to running large companies so that we are ready to move seamlessly to the next level.”
If the past indeed is prologue, there is no question that The McCart Group will be enjoying a very bright future. We look forward to watching them change and adapt and are pleased to recognize them for the accomplishments thus far by naming them this month’s Rough Notes Marketing Agency of the Month. * |
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From left: Jeff McCart, CPCU, ARM, Principal; Steven J. Needle, President-Employer Services; and Joe McCart, Founder. |
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The Property/Casualty team (from left): Christopher Owens, CIC, CRM, Senior Vice President-Risk Management Division; Susan W. McDonald, CIC, CRM, Account Executive; Stephen R. Adkins, CPCU, ARM, Vice President-Risk Management and Insurance Services; Lorie A. Peters, CIC, CRM, Commercial Account Manager; and Richard Shrader, AAI, Vice President. |
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The Benefits Team (from left): Cindy Covington, Human Resources Services Manager; Geoff Kilgore, Vice President-Employer Services; Pia Xander, Benefits Account Manager; Neil K. Ortkiese, Consultant; and Bridgette Funderburk, Implementation Specialist. |
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The Loss Control/Claims Team: Chantelle J. Dortch, Senior Claims Management Consultant; Chris Mancillas, CIH, Director-Loss Control & Safety Engineering Services; J. Michael Gravely, CPCU, Director-Business Development; and Stephen Adkins. |
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Chris Mancillas (left) and Loss Control & Safety Consultant Frank Trevino (right) run a mock OSHA audit with Maintenance Manager Bobby Callaway of Blaze Recycling & Metal. |
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Collaboration among different departments helps round out all the agency’s accounts. Here, Daniel W. Houston, Director-Strategic Risk Management (standing), discusses an account with (from left) Benefits Team members Bridgette Funderburk, Pia Xander and Neil K. Ortkiese, and Commercial Account Managers Connie Draime and Tina Gill. |
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Education is an essential in The McCart Group’s success. Dan Houston leads a discussion with a number of “students” of the business. |
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The Management Team (from left): Steve Needle, Chris Owens, Stephen Adkins, Jeff McCart and Geoff Kilgore. |
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