19th annual Rough Notes Marketing of the Year candidates
One of the agencies featured in a Rough Notes cover story during 2007 will be chosen Marketing Agency of the Year. The agency principals of the winning firm will be presented with the award at a dinner held in their honor this spring.
The winner will be selected by votes of the previous years’ Rough Notes cover agents (from the years 1989-2006). Ballots have been mailed to the owners of these 196 firms.
The nominees for this year’s award are described on the following pages. The winning agency will be announced in February, and a full story on the winner will appear in a future issue.
February
Cottingham & Butler
Dubuque, Iowa
In the last 20 years, Cottingham & Butler has grown to 340 employees with revenues reaching $49 million. In 2006, the agency was ranked by Business Insurance as the 57th largest brokerage in the country, and is in the smallest city for any broker in the top 100.
Attracting youthful professionals and encouraging innovation in meeting clients’ unique needs has resulted in a plethora of risk transfer solutions and risk mitigation services that include captive management, loss control expertise, safety consulting, claims management, an employee benefits TPA, and a managed care facility.
One of Cottingham & Butler’s largest niches is the transportation industry, and to help clients have better control over their costs the agency set up three trucking captives, as well as a heterogeneous captive for non-trucking clients.
The agency has also pursued large and small national accounts in second-tier cities that don’t necessarily attract the attention of the large national brokers, but have outgrown smaller agencies. The strategy to move these accounts has resulted in the tripling of non-trucking business in two years.
Cottingham & Butler’s large employee benefits book includes 300 self-funded clients. This area has its own TPA and managed care company that includes five physicians and more than 20 nurses who provide claims review and management of PPO discounts for P-C clients, along with other services.
March
The Starke Agency
Montgomery, Alabama
The Starke Agency is built on a strong work ethic that has spanned generations and given rise to the agency’s motto—Omnia Vincit Labor (Work Wins). The same motto appears on the tombstone of the first Starke to come to Alabama—Professor John Metcalfe Starke, who founded The Starke University School and became known as The Great Educator in the region.
Along with his brother, Bolling P. Starke Sr. founded the agency in 1929 as an insurance and real estate operation. The two brothers split up the agency after World War II, with Bolling taking over the insurance business.
Today, the agency is headed up by the third generation, with Bolling P. Starke III (Trey) serving as president and majority stockholder.
The agency still stands on the bedrock of hard work and service to the community, although it has branched out from its original focus on personal lines. Commercial lines, including bonding, make up the largest percentage of its business. Total revenues are $3.7 million and the agency employs 26 people. It has enjoyed steady growth, averaging better than 7% annually.
Not surprisingly, community involvement and education are emphasized and are actually part of every employee’s annual goals. Each employee has to establish three measurable goals and one educational goal. And producers, in addition to meeting production goals, must be involved in at least two community organizations and must have attained or be pursuing a professional designation to qualify for a bonus.
April
Commonwealth Insurance Group
Charleston, South Carolina
From the time Todd Tyler founded his agency in 1997 and for the next five years he and his growing production staff each made 50 cold calls a day. As the agency grew, though, Todd wanted the organization to work more efficiently.
He discovered that the personal lines business wasn’t contributing enough to the bottom line. Todd decided to sell off some $4 million in personal lines business and reduced the agency’s staff by one-third.
He then focused on developing a planning process for commercial lines and corporate benefits. Every producer has to delineate his or her top five goals for the upcoming year at a November retreat. Corporate sales goals are set up also, including a desire to double revenues every three years. The agency is on track to reach $6 million in revenue by 2009.
“And we don’t just expect our sales people to succeed without help. We typically spend $20,000 to $30,000 a year in sales training and consulting,” Todd says. “Marsh, Berry & Company, Inc., has been tremendously helpful in this regard.”
Todd also credits Scott Addis, president of The Addis Group, King of Prussia, Pennsylvania, and founder of Beyond Insurance, with helping Commonwealth “see the innovative concepts built around risk management … as opposed to simply selling insurance products.”
In 2005, Commonwealth launched its Clubsurance™ program. It was selected as the preferred provider of insurance by the National Golf Course Owners Association for its 5,000-plus members across the United States.
May
Roeding Group Companies
Crestview Hills, Kentucky
This $8.7 million revenue firm with 66 employees is a multi-generational, family-owned firm that has successfully diversified both its ownership base and its client base. Key performers are rewarded with ownership, and its revenue stream (48% commercial, 13% personal, 11% benefits and 28% public entity business) qualifies it as both a generalist and a specialist. In 1998, Roeding merged with Public Entity Insurance, which operates as a division of the firm from its Lexington, Kentucky, offices. Among its clients is the Kentucky Association of Counties.
Roeding Group is completely paperless in personal lines and small commercial and is “close” in large commercial. In 2007 it received the Travelers’ Personal Lines Agency of the Year award for the company’s Great Lakes Region based on profitability, growth and application of technology. Incoming mail is scanned and delivered to the desktop, and all service personnel use dual monitors. In personal lines, the agency was able to reduce its number of CSRs from six to five, while business continued to grow.
Roeding Group has hired four new producers in the last three years. Three of the firm’s shareholders, who are also leading producers, serve as mentors to new producers. It has a centralized marketing department with two marketing managers—one for mid- to large accounts, the other for small commercial—helping to raise the agency’s hit ratio from 25% before 2005 to 71% as of January 2007.
June
HBA Insurance Group
Miami, Florida
Formed in 1999 through the merger of two agencies, HBA Insurance Group is a culturally and professionally diverse agency serving the middle market, including the Hispanic community and South Florida clients.
To meet clients’ needs, each employee’s strengths are examined to create specialized teams. Employees who have brought value to the agency are rewarded through ownership. At this writing, 14 shareholders have become partners, and those partners generate more than 90% of the agency’s volume. To encourage perpetuation, younger producers are paired with seasoned producers on certain accounts.
The agency’s document management system has enabled the teams to more efficiently serve clients. For example, a team leader “can electronically spot check a CSR’s workload and should it be too great, can reallocate … to another CSR who doesn’t have as great a workload at that point,” says President Bill Beckham.
HBA Insurance was put to the test and passed with flying colors in 2004 when four major hurricanes swept across Florida. “We were there with our clients’ coverage forms to make certain they received proper compensation for their losses,” remembers Chairman Ernesto “Tito” Freyre.
The agency goes the extra mile in other ways, such as improving workers comp services through outsourcing. Tito says, “We review our clients’ losses every three months and project their experience modification before NCCI does.”
In 1999, the combined revenue of the two agencies was $6.5 million; by mid-2007 the agency was on target to exceed $20 million.
July
Moreton & Co.
Salt Lake City, Utah
For 97 years Moreton & Co. has been headquartered in Salt Lake City. The family firm is now in its fourth generation, with 170 employees and offices in Arizona, Colorado and Idaho. Revenues total around $30 million, with one-third of that coming from employee benefits. “Our goal is to become a dominant western U.S. broker by the end of the decade,” says Executive Vice President Daniel Jones.
Moreton & Co. targets middle and upper middle market commercial lines clients, as well as specializes in high net worth accounts in personal lines. The agency’s retention rate is better than 96%. In addition to property/casualty and employee benefits for commercial lines customers, the agency also offers life insurance and wealth planning.
The agency has its own online employee benefits software—Benefitfactor—as well as an in-house benefits underwriter and an in-house attorney who specializes in benefits and will work with clients on benefits and human resources concerns.
“We’ve always had a reputation for being excellent problem solvers for our clients, and that has allowed us to bite off some pretty big challenges,” Dan says. Among those big challenges was the 2002 Winter Olympic Games. The agency handled all the risk management and insurance needs for those games.
In addition to the Olympic Games, Moreton & Co. is the insurance broker for the Utah Jazz.
August
Shephed Insurance and Financial Services
Carmel, Indiana
David Shepherd started this agency from scratch in 1977—operating in its early years from a garage converted into an office. Today the firm has grown to 70 employees and $7 million in annual revenues, with a team of highly motivated producers—all 20 of whom are former successful athletes. Much of that growth has been recent—an additional $1 million per year in revenue since 2003, nearly all of it organic growth.
By diversifying its book of business—30% commercial lines, 30% personal lines, 30% benefits and 10% 401(k) and other investments—Shepherd Insurance & Financial Services has immunized itself from some of the soft market effects. It also has diversified geographically—with an office 200 miles away in Evansville, Indiana—and generationally—with a management team made up of individuals in their 20s, 30s, 40s and 50s.
Kelly Shepherd Kakone, Dave’s daughter, is the agency president. She says, “My most important job is listening”—which the agency encourages by holding regular meetings to address employee concerns. The agency also conducts annual off-site corporate retreats that include representatives from each department.
Dave notes, “After the last corporate retreat, 75% of the ideas presented on how to improve the company were implemented.” Franchise truck dealerships have been an important niche for P-C business, benefits and investment products. In 2006, the Auto Dealers Association of Indiana named Shepherd Insurance the exclusive agent for their association-owned insurance company.
September
Alaska USA Insurance Brokers
Anchorage, Alaska
Alaska USA Insurance Brokers was created when the Alaska USA Federal Credit Union purchased the state’s largest independent insurance agency in 2004. The credit union had been in the insurance business since 1986 but wanted to expand into all lines of business.
In 2005, Randy Pugh was brought in to run the agency. He had been with Willis in Anchorage, and the credit union was one of his clients.
Randy found a real synergy between the credit union and the insurance agency arising from a combination of “very loyal customers and an emphasis on relationships and strong service” at both entities.
In 2006, using Marsh Berry as intermediary, the agency approached Willis about purchasing its book of surety business. Willis offered to sell all its Alaska business since it was mostly middle market business that didn’t fit the Willis model. That brought some $10 million in revenue and 29 experienced employees to Alaska USA. This additional talent has allowed the agency to compete successfully for any size account.
The agency instituted a team-selling and retention bonus program that allows account managers to share in the production team’s success. The result was internal growth of 17% in 2006 and renewal rates of 97% in commercial lines and 92% in personal lines. Total revenues now exceed $15 million, which has allowed the agency to attract all the major insurance companies operating in Alaska, as well as a number of regionals.
October
The Oswald Companies
Cleveland, Ohio
Too often, growing an agency means bringing on additional layers of management, sometimes to the point that talented people become frustrated with the bureaucracy and look elsewhere for opportunities.
That’s definitely not the case with The Oswald Companies in Cleveland, Ohio. Established in 1893, the agency in 1991 established a sister company in Florida and has succeeded in maintaining an entrepreneurial spirit while almost tripling its revenue in the last six years. Although Oswald has made a few acquisitions, its growth has been almost entirely organic.
The Oswald Companies now employ some 425 people in offices throughout the Midwest and Southeast, and the companies finished 2007 with revenue of more than $65 million. A key to its impressive success is the fact that Oswald is an employee-owned company and is thus able to retain and recruit exceptional talent.
The agency’s strong corporate culture is grounded in its core values, known by the acronym PERC: Passion for Excellence, Integrity, Resourcefulness; and Commitment to community. These values are carried out in day-to-day operations as employees put the client first, always strive to improve the agency’s products and services, and play a meaningful role in their community.
Focused on building a presence in select niche markets, Oswald has brought on board people with expertise in those niches and has earned coveted trusted advisor status with clients by working with them to reduce their risk transfer costs and provide solutions, not just promises. Thanks to an active recruiting and training program, Oswald now employs 50 people under age 27 who demonstrate the entrepreneurial spirit to move the agency into the future.
November
Mackoul & Associates, Inc.
Long Beach, New York
Robert E. Mackoul, CLU, founded Mackoul & Associates, Inc., in 1987. He had no premium, just his financial services clientele and an idea. His clients were buying and selling apartment buildings in New York City. He decided he would focus on providing coverage for real estate owners, and condominium/cooper-ative buildings in the New York metropolitan area. By 1996, premium volume was just shy of $3 million. During the next decade, premium volume grew by more than 800%. All the growth has been organic.
“We have built a sales culture where each employee is a partner in the overall success of the agency and where everyone has a vested interest in its success,” states Robert.
Goals for growth and retention and a marketing plan for how they will be achieved are presented at the beginning of each year at an off-site kickoff meeting. At year-end if the agency reached its annual growth goals, the agency takes each employee and a guest on a five-day paid vacation to an all-inclusive resort.
Robert and his son, Edward, inspect every risk that the agency is going to quote and then provides its carriers with a five-page report and pictures as part of any submission.
The agency created New Empire Group, Ltd. to be the program manager for commercial umbrellas. Initially used only for Mackoul & Associates’ business, it now offers commercial umbrella to other New York brokers and boasts nearly $11 million in umbrella premium.
December
Assurance Agency
Schaumburg, Illinois
“Work isn’t supposed to be fun—if it were fun, they wouldn’t pay you,” goes a timeworn office cliché.
One agency that doesn’t subscribe to that sour-grapes philosophy is the Assurance Agency in Schaumburg, Illinois. In fact, the 46-year-old agency attributes much of its success to a culture that rewards hard work with fun—and the opportunity for ownership.
Established in 1961 to write coverage for construction risks in the northwestern suburbs of Chicago, Assurance in 1990 began to diversify into other lines. The agency now has four practices: construction, manufacturing, health care, and employee benefits. Producers are held accountable for achieving their sales goals and are supported by an in-house seminar team that attracts qualified prospects.
In 1995, founders Jim Blackburn and Jerry Powell divested themselves of 51% of the agency’s stock by trading it to five younger producers in exchange for ownership of their books.
Since that time, sharing stock with deserving employees has become the linchpin of Assurance’s perpetuation plan. A strong commitment to education and development helps employees grow as professionals and spurs them to give clients five-star service.
To relieve the stress created by a 2006 reorganization, Assurance’s management put the focus on fun, hosting an ice cream social, giving each employee a gift certificate for a weekend dinner, and offering staffers the opportunity to compete for other prizes.
The “work is fun” approach clearly is paying off: Assurance now has 177 full-time employees and finished 2007 with revenue in excess of $35 million—all the result of organic growth.