Marketing Agency of the Month

A true partnership with clients

This Pennsylvania agency focuses on developing clients
with a risk management attitude

By Dennis H. Pillsbury

Johnson, Kendall & Johnson, Inc., Newtown, Pennsylvania, comes by its focus on client service honestly. Its predecessor, The Johnson Companies, had a history of always looking for ways to help clients—and one of those ways made the company famous in the benefits world. One of its subsidiaries, Johnson Benna, an executive compensation and pension consulting firm, developed and sold the first 401(k) plan in 1980. Ted Benna wasn’t looking to change the retirement planning world; he was simply looking for an effective way to serve his clients and noticed a loophole in the tax code. I don’t need to tell you how successful his idea has become.

Anyway, back to The Johnson Companies. It was founded in 1956 as a life, retirement planning, and benefits firm by Ed and Dave Johnson. In 1959, Ted Kendall joined the firm from the old Aetna to provide property/casualty expertise. In addition to Johnson Benna, other units included Johnson Administrators, a TPA for benefits firm, and Johnson, Kendall & Johnson for property/casualty.

In 1990, Ed and Dave decided to sell The Johnson Companies. By 1994, two of the leading producers at Johnson, Kendall & Johnson, Inc.—Bruce White and John Wright—reached an agreement to buy the firm. “That’s when we became independent,” Bruce remembers.

Bruce, who serves as executive vice president of the agency, says that they immediately started to “refocus ourselves to become true partners with clients. We wanted to develop clients who were serious about managing risk. And that gave us the freedom to develop risk transfer programs that reflected those efforts. The focus shifted away from selling insurance and toward risk mitigation with insurance as a tool to help transfer the costs of unavoidable risk.”

A risk boutique

Like many agencies, Johnson, Kendall & Johnson determined to become a boutique operation that focused on a specific niche. But unlike many agencies that defined that niche by type of business or line of business, JK&J focused on finding the right clients. “Our niche was risk mitigation,” Bruce maintains proudly. “One of our first new hires after becoming independent was a safety engineer. We now have three on staff.

“Our goal was to keep our clients focused on improving their risk profile. In addition to safety engineers, we also developed a support staff that could help clients with contract reviews, or to perform due diligence in the event of a proposed acquisition or the addition of a new division. In essence, we became an all-purpose tool that the client could use to solve any risk-related problem.”

At the same time, the agency formed a claims advocacy group to make certain that, when claims did occur, “our clients stayed at the forefront of the insurance company,” Bruce notes. The group includes claims experts who “understand the level of detail that an insurance company wants when a claim occurs. And we make certain that we provide that detail so there will be no glitches in the process.”

Bruce continues: “Our people also speak the language of insurance company claims people so they can discuss any problems with the company and get them resolved quickly. At the same time, we keep in touch with the affected client on a regular basis to let him or her know the progress of the claim and when to expect final resolution. This three way communication—agency, company and client—is a vital part of what we provide to our clients.”

Finding and keeping producers

Because of the unique nature of the agency, Bruce and John decided that the best way to get producers that fit into the culture was to develop their own “homegrown production talent. We made that decision in 1995. We wanted to train producers to become professionals who relied on greater knowledge and become a resource to their clients. That’s not always the guy with the strong sales drive, although that’s certainly a necessary ingredient, since you do need someone who will close.

“Unfortunately, when we started college recruiting to find people that fit into our risk management culture, we found out that we weren’t very good at it,” Bruce remembers. “Fortunately, we found Bud Antrim and he helped us put together a recruiting and mentoring program.” Antrim, who is managing partner at The CIB Group, LLC, was head of Woodgate Partners at the time, a firm that specialized in college recruiting for the insurance industry.

His approach includes establishing relationships with local colleges, screening applicants, presenting top talent to the agency and then helping them develop a structured training program so the talent will stay with the agency. (For additional information about Antrim’s approach, see “Back to School” in the December 2001 issue of Rough Notes magazine.)

In 1997, Johnson, Kendall & Johnson hired its first recruit, Doug Friel, and put him through the JKJ Mentoring Program that Bud Antrim helped them create. To show how successful the program has been, Doug is now a partner in the agency.

The JKJ Mentoring Program involves a five-year process that starts out focusing on class work activity and support type activity designed to turn the candidate into a risk management expert. “The candidate will also be involved in doing research when we’re working on a client’s needs,” Bruce points out, “so that he or she will be familiar with what to look for when developing a risk management program for our clients.

“By the third year, the candidate is beginning to develop a book of business, getting the first few hundred thousand of revenue in the next two years. In the fifth year, he or she will start gaining some independence, although still working on a team basis with the group to which they were assigned when they were hired. I’m always in that group,” Bruce notes.

“Once the candidate gains that independence, he also will develop his own team. We’ve had great success with this program. Our hit ratio is around 75%.”

Hire for life

“Our hiring and mentoring process really differentiates us. We hire as a company,” Bruce says. “Our producers will go to the college and spend the day there meeting candidates. A few will be selected to come back to our office and meet with us. After a brief introduction to the firm and a meeting with the management team for about an hour, they will then meet individually with 10 to 15 JKJ people for about 20 minutes each. These are people from all levels at the agency—the people who do the work. Every one of our 56 employees is important to us and we want them involved in meeting potential new hires. We want their input and we want to make that clear to the candidate.

“After the individual meetings, we get back together for a social hour-and-a-half session that is designed to see how they deal with a social setting. We then decide on whom to bring back for follow up. That may involve six or seven breakfast meetings so that we really get to know the person before we hire them and they get to know us. When we hire, we hire for life, and we emphasize that in our introduction.

“We also emphasize our culture of entrepreneurship where ownership is passed on from generation to generation (not family), and Doug is an example of that. People who produce are invited to become owners. In addition, the agency also is partially owned by an ESOP.

“We are looking for some unique skill sets,” Bruce admits. “For example, I have clients that I’ve had for 23 years and I must bring new ideas and passion every time I meet with them. So we look for people who can sustain energy doing the same kinds of things.”

An international flavor

In addition to serving the people and businesses in their area of Pennsylvania, the agency is involved in placing coverages internationally through its relationship with UniBA Partners, an independent global network that provides insurance broking, risk management and employee benefits solutions in more than 120 countries.

“We’ve also had a lot of business opportunities with German-owned companies and recently formed JKJ&H International (the H is for Friedrich E. Hortkorn GmbH, the German broker that is a partner in this venture). We’ve worked together with Hortkorn for about 10 years. There are cultural differences that make it imperative that we both have local representation. It allows us to provide true consultative insurance and risk management understanding despite those cultural differences. Having a partner that understands those differences and can adapt risk management and safety programs to reflect those differences is key in developing and retaining international clients. We also have developed a close relationship with the German American Chamber of Commerce.”

The partnership with Hortkorn has been very successful, so “we are working on a similar partnership with a Canadian firm,” Bruce points out.

It’s all about the team

“For us, it’s all about the culture and the team,” Bruce concludes. “We recognize that we have to pay people well and treat them well so that each individual understands that we view him or her as an important part of our agency. Our method involves a long-term commitment, especially in developing new production talent. John and I have not produced new business revenue in our names in more than a decade. It’s always developed in conjunction with one of the young producers. We want to get them to $500,000 in revenue, and you can accomplish that with a team behind you.

“And those teams never end. We all still stay in touch with the clients that we’ve developed as a team, even though the producer may take the lead. It helps to enhance the knowledge base the client can depend on and maintain a level of passion that one individual may not have available every day. Thanks to the efforts of all our people, we finished last year with $150 million in premiums, a small increase from the prior year in a very tough market.”

The spirit of entrepreneurship and teamwork that pervades Johnson, Kendall & Johnson has resulted in a risk management boutique that takes excellent care of its clients. We at Rough Notes are proud to recognize the agency as this month’s Marketing Agency of the Month.