The Changing Face of the Independent Agent
Taking the Reins
Andy Beauchamp turns his passion into profit
By Elaine Tolen
It’s 5:45 a.m. on a cold, dark January morning in Indiana. The frozen snow crunches under Andy Beauchamp’s feet as he walks to the stable on his horse farm in Pendleton, about 35 miles northeast of Indianapolis.
While many people are still sleeping, Andy and his wife, Alisa, are putting hay in the pastures and adjusting blankets on their 10 sport horses so they will be comfortable during the day while Andy and Alisa are at work. The Beauchamps then go about the daily routine of mucking stalls, feeding, filling water buckets and pulling bales of hay down from the loft for the evening feeding.
If no problems arise, Andy and Alisa finish their work about 7:15, and soon after, he is on the road heading 30 miles northeast to Morrison Galliher in Muncie, Indiana, where he is a vice president/director and head of the agency’s Equine Insurance Specialists division. Then at the end of a long day of insurance work, Andy and Alisa spend another two to three hours taking care of their brood and maintaining their farm.
Horses don’t take weekends off, so “it’s a 365-day-a-year pursuit—not like being passionate about golf where you can put away your clubs until next season,” Andy muses.
Passion becomes a niche
Andy loved horses as a youth. During the summer, he attended Culver Military Academy in northern Indiana where he was part of the Black Horse Troop, one of the nation’s top high school horsemanship groups. Andy’s family had horses on their farm, and Andy showed and rode them competitively.
At Ball State University, Andy was on the equestrian team, which went to the national finals his freshman year. After graduation, he met Alisa, who shared a love of horses and who had showed horses while at Miami University of Ohio.
“Horses are my passion,” Andy says. “I remember thinking, ‘I could make a career of this.’” Being involved in horse shows throughout the Midwest during college and post-graduation gave Andy the opportunity to get to know trainers, riders and owners, many of whom would later become his insureds. His path to specializing in the equine industry began in 1992, even before he became an independent insurance agent.
“When I was on the Ball State equestrian team, one of the trainers, Dave Dorner, needed liability insurance for his equine business,” remembers Andy. “He knew my family had an insurance agency and asked if we could help. Equine insurance is a high-risk area and there aren’t many markets, but we realized that there had to be many others in the same boat.” So the agency started an equine division that year.
In 1994, Andy became the fourth generation of his family to join Beauchamp & McSpadden, Inc. (Morrison Galliher is one of Beauchamp & McSpadden’s four offices.) Andy’s great-grandfather, Ward, founded the agency in 1927. His grandfather, Robert, joined the firm after World War II, followed by his father, Bob, who is chairman/CEO. Andy’s uncle serves as president and his brother, cousin, aunt and mother are some of the 45-plus employees. All of the Beauchamps take an active part in the community, and Andy has given back through a number of involvements, such as the Muncie Jaycees, Crime Stoppers, Chamber of Commerce, YMCA fund raising and Academy for Community Leadership.
After working for several years in personal lines at Morrison Galliher, Andy moved to the agency’s commercial side. In addition to handling small and medium-sized commercial accounts, with his background it was natural that Andy would specialize in the equine industry. “People saw that one of their own had a product they needed. There’s a trust with my clients because I speak their language. They didn’t want to do business with big brokers.
“At that time there wasn’t much marketing on the Internet for the equine insurance market, at least, so our advertising was through word of mouth.” Being a member of several horse associations and sponsoring equine events also spread the word about Morrison Galliher and Equine Insurance Specialists.
In 1996, the agency developed the industry’s first Web site for online quoting of life insurance on horses (www.insureyourhorse.com). The site gets several thousand hits a day, according to Andy, with an average of 300 daily “user sessions” in which information is retrieved or an application is downloaded.
Licensed in 48 states, Equine Insurance Specialists employs five people, three of whom are producers. Andy says the division has enjoyed double-digit growth for several years and an 85% retention rate. He sees the growth continuing and hopes to add an equine producer every year, drawing from the horse industry. “You can teach a new producer about insurance, but expertise in horses is something that has to be learned through experience,” Andy explains.
Besides retail selling, Equine Insurance Specialists is a wholesaler to 800 agencies throughout the country. For instance, Andy says, an agency might cover a factory owner who also owns a horse farm. “Most carriers don’t have a standard appetite for farm-related exposures, so the agent obtains coverage from us. It is a seamless transaction for the wholesale insured; rarely do they know we are involved. It makes the agent look like a hero because he or she was able to find coverage for a tough risk.”
Before the current soft market, Andy says the division’s book was 60% wholesale and 40% retail. Now it’s 50-50. “The reduction in renewals does not necessarily alarm me because the soft market will eventually change,” Andy states. “We are seeing companies writing equine insurance who have no concept of what they are writing, but do it in consideration of covering a larger risk, such as contractor or manufacturer for the agent.
“In fact, having a niche market in the soft market as well as multiple products is paramount,” he continues. “The independent agency system offers the client choice. Within a niche, choice of products becomes even more important as the offerings tend to be few and far between.”
Exposures in the equine industry are varied and include horse mortality, farm property and liability as well as coverages for independent instructors and trainers. Horses can live into their mid-20s, and whether they’re used for pleasure, competition or breeding, “you’re dealing with a person’s ‘family member’ or livelihood, and insureds want to make sure they have the correct coverages and a knowledgeable agent to answer their questions,” Andy explains.
Coverages also are varied. For example, there’s “prospective foal coverage,” which provides full value coverage during the 11-month gestation period if the foal is not carried to term pregnancy and is not born alive. “We provide a lot of international transportation coverage as well as infertility coverage, which covers 100% of the insured value of a stallion if it is not able to breed to mares,” he continues.
“People pay top dollar to breed their horses. A stud fee can range from $1,000 to hundreds of thousands of dollars, and these investments need to be protected.” The agency also uses standard ISO forms with enhancements to cover equine insureds’ property & liability risks.
Andy admits that his job is never boring. “I might work with a thoroughbred owner in Kentucky in the morning and talk with an owner of a breeding operation in San Diego that afternoon,” he says.
Leading the way
Having observed his father’s involvement in industry trade groups, it was natural for Andy to do the same. Bob Beauchamp served for two years as president of the Independent Insurance Agents of Indiana (IIAI) and several years as a state National Director for the Independent Insurance Agents & Brokers of America (IIABA). “I saw the respect and admiration that my dad received from giving to the state and national organizations,” Andy remembers. “He has built lifelong relationships with agents and companies through association activities.”
As soon as Andy joined Morrison Galliher in 1994, he followed his father’s lead and became involved in the IIAI’s Young Agents Committee (YAC). And last fall, at the age of 36, Andy attended his 30th IIAI convention. This close connection has given him a unique perspective and deeper understanding of the role of the association.
“Many young agents don’t understand what these associations do, in the lobbying area for instance,” Andy continues. “It’s much easier to keep a bill from becoming law than to overturn it once it’s enacted. Being involved in trade groups helps young agents learn about the legislative process and how they can be effective through grassroots efforts.”
When Andy joined the YAC, the group was small, the result of aging out and changes in leadership strengths. “From growing up in the industry, I knew there were many more young agents in Indiana,” he remembers.
With support from the IIAI, Andy and a core group of young agents began building membership. To find young agents around the state, the YAC enlisted the help of insurance company field reps who were under 40 years of age. These reps would take YAC brochures with them when visiting agencies, distributing information when they met young agents and educating them on the benefits of the YAC program.
Besides organizing educational programs, the YAC added events such as an annual golf outing and bowling tournament, which in addition to providing networking opportunities, helped to raise money for projects such as the state and national PACs. Indiana young agents have been involved in a variety of community projects, such as helping a food bank and providing money for families of active military personnel. The YAC Annual Conference has grown to include breakout educational sessions, team-building activities, networking with companies and vendors, as well as a golf tournament.
Within a year of the rebirth of the IIAI Young Agents Committee, the group had 50 active members. About 200 young agents are now active in the YAC. Although part of the Independent Insurance Agents of Indiana, the committee is self-funded, with committee members raising $20,000 to $30,000 annually from companies and vendors to support the YAC’s activities.
In the last 13 years, Andy has served in many capacities on the YAC, including chairman in 2000. Under his leadership, the YAC won the IIABA’s Outstanding Young Agent Committee of the Year Award three consecutive years in 2000, 2001 and 2002. In 2003, they received the Big “I” Membership Development Award. In 2001, Andy was named IIAI Young Agent of the Year.
To make a young agents committee successful, Andy says, “Individuals in leadership have to ‘get it.’ They have to have a passion for the industry and the association and be willing to put in the time and effort necessary to help it flourish.” IIAI executive Steve Duff, CAE, says, “And Andy does ‘get it.’ Like his dad, he keeps up with issues that impact independent insurance agents. He puts the interests of the association first. For that, he reaps personal and professional rewards.”
Andy points out that young agent programs have a greater purpose beyond helping people in their individual careers. “These groups strengthen the entire independent agency system and are key to the industry’s perpetuation,” he explains. “As agency owners grow older and think about retirement, many times they go the route of mergers and acquisitions simply because they have no perpetuation plan.
“They should be looking to young agents to perpetuate their business,” he continues. “Young agent programs help inspire individuals to make the insurance industry a career, instead of just a job that they might leave in five years, and give them experience and knowledge that they’ll need when they take the reins at an agency.
“Sometimes there’s a gap between what the 60-year-old owner expects to receive when he sells the agency and what the 30-year-old agent can afford to pay for it,” Andy continues. “Some companies will loan funds to young owners. Again, association involvement helps agents make valuable contacts and build relationships that can lead to these kinds of arrangements.”
Making an impact on a national scale
After serving on the IIAI’s Young Agents Committee (during which time as chairman he sat on the association board), Andy has been on the IIAI Board of Directors for the last nine years. In 2005, he was named Director of the Year. Also that year he became the first young agent from Indiana to serve on the IIABA’s National Young Agents Committee. In this capacity he represents Iowa, Illinois, Indiana, Michigan, Minnesota, North Dakota, Ohio, South Dakota and Wisconsin.
Andy says he and the other National Young Agents Committee members have become great friends and work closely together, with the goal of providing more resources from the national level to the state level, to help state young agent programs be successful. Their efforts culminate with the Young Agents Sales & Leadership Conference held each September. This year’s event will be in Las Vegas, September 12-14, 2008. “We’re not there to put on a show or promote products,” Andy explains. “Our goal is to improve the organization.”
When his National YAC term ends later this year, Andy hopes to do more on the national level, as well as continue to contribute to Indiana independent agents. With such a family history behind him and a commitment to the insurance industry moving him forward, there’s no doubt that Andy Beauchamp will be in the winner’s circle for years to come.