Carving out clarity

ARM celebrates 40 years of helping agents boost their business

By Lori Widmer

It can be tough to have an identity crisis, but when you’re an inter­national organization serving many masters, it can be downright daunting.

That’s the challenge new Chairman Craig Payan faces as he takes the helm of the Associated Risk Managers (ARM), the 40-year-old group dedicated to bringing exclusive products, programs, and resources to member insurance agents looking to increase business potential. In fact, the name itself is cause for some confusion. ARM is not a risk management service, nor is it affiliated with the Associate in Risk Management (also ARM) professional designation that risk managers study for.

Yet that is not the main challenge Payan is trying to overcome. Instead he’s focusing on conveying the group’s unique structure and offerings to three separate groups—membership, insurance carriers, and the buying public. “We’re trying to brand ourselves to three different constituencies,” says Payan, who is also president of PA&T Insurance, an Orland Park, Illinois-based insurance agency offering personal and commercial lines. “Number one is our member agents. We want them to have the understanding and appreciation for the state, regional and national ARM organizations.”

Equally important to Payan is to brand ARM as a distribution point for carriers, vendors, and product suppliers. Through offering exclusive programs to ARM members, Payan also hopes to capture the consumer by presenting more options through ARM member agencies.

He admits the goal might be considered utopian, but he’s confident he can lay the groundwork now in order to position ARM to accomplish its marketing efforts well beyond his tenure. To that end, Payan and the ARM board have launched a new branding campaign aimed at putting the focus back on how agents can benefit from their membership at both national and regional/state levels.

The grassroots beginning

It’s not as though ARM hasn’t managed to establish itself and grow to a national group—even without a clear definition. The group is celebrating its 40th anniversary this year, an achievement that was hard fought, but one that has seen much upward momentum in terms of its membership growth since its inception as a state group in 1969.

ARM was the brainchild of Wayne Hoffman, an Indianapolis, Indiana, independent agent who was seeing a growing need at the agency level for a more localized approach to commercial insurance sales. Asking a dozen or more industry friends and contacts throughout Indiana to get together, Hoffman addressed the changes taking place in the industry and shared his concern that each individual agency would have difficulty keeping up with those changes. He proposed an idea: Join forces and share knowledge and resources, meet regularly, share information about the marketplace, and develop a few insurance programs to help each other increase business.

Then there’s the name. Using the words “risk management”—a hot buzz phrase at the time—the band of colleagues formed Associated Risk Managers with the focus on increasing commercial insurance business and helping each other meet the needs of a rapidly changing insurance market.

Part of ARM’s historical path included the 1970 expansion into neighboring states, then eventually across the country. As the national organization grew, an office was opened and staff hired. However, despite efforts to create exclusive national products and programs, most were not well received and many state groups were lukewarm to paying more dues for unrealized benefits. Payan explains, “Agents were happy working within their state groups and didn’t see the benefits at the national level. Many decided not to support it, and a few groups spoke of dropping out of ARM.”

Payan himself was in one of these groups that questioned the value of their membership. They went so far as to kick around ideas for a new group name. While nothing came of his group’s deliberations, the national organization’s office was closed and the state groups went through a thorough examination of the organization, its membership, its needs, and what a national ARM group could do to enhance, rather than detract from the state and regional associations.

Since that time, the focus has remained fairly constant—to help agents increase their business through collaboration. Today’s ARM International stretches into 23 states with nearly 240 member agencies. Collectively the ARM network of agents generates over $4 billion in property and casualty premiums.

Teaming for success

Then came the partnership. Ten years ago, when ARM International found itself in the position of justifying its existence to its membership, the board took on a more benefits-oriented stance. Larry McSpadden, senior vice president at Beauchamp & McSpadden, Inc., an independent insurance agency in Indiana, past president of ARM of Indiana and past chairman of the national group, faced the same state concerns about the lack of benefits of the national group. As McSpadden puts it, “The national was coming up with programs that no one really wanted at the grassroots level.”

The board discussed the foundation of the national group—why did it exist? What benefit was it giving to its state members? What did the states need that they weren’t getting from national membership? During those discussions, the focus shifted to the recent acquisition of ARM of California by Arthur J. Gallagher & Co. (Gallagher), one of the world’s largest insurance brokers. “They were some really good guys who understood our position because they too grew out of being an independent broker,” says McSpadden, “which is what we’re all about.”

ARM International met with the Gallagher team and within a few short months, the collaboration resulted in what’s now known as ARM Partners, a relationship with Arthur J. Gallagher & Co. whereby Gallagher handles much of ARM International’s back-office functions. From Gallagher, ARM receives help in organizing meetings and getting word out to the membership, as well as a newsletter that reaches all ARM members. Also they serve as the communications switch between ARM agents and all of the markets and sources that Gallagher has to offer to ARM agents.

The partnership was an instant success. ARM agents have been able to take advantage of some key Gallagher services, including the Arthur J. Gallagher & Co. subsidiary, Risk Placement Services, Inc., an E&S wholesale group started a year prior to the ARM/Gallagher partnership.

Outlining benefits

That’s not the only partnership that’s been beneficial to ARM agents. ARM International has also partnered with AFCO Premium Funding, which handles the operations side of ARMFico, ARM’s premium financing company. AFCO handles the group’s licensing and offers what McSpadden says is “the best buy rate anyone gets.”

More recently Payan has led the charge to increase the buzz about membership benefits. Niche products, exclusive product packages, superior resources and a national network of member agents who can supply support and answers round out what Payan believes are key benefits that no other organization can provide insurance agents. “We want to validate the value of membership and maximize opportunities,” he says. “I never want to hear an ARM agent say, ‘I don’t know why I’m a member of ARM.’”

Adding to the value

That’s why Payan has taken on the task of searching for new oppor­tunities, programs and products to bring to the ARM membership in order to help them gain a competitive advantage. One thing that won’t be part of an ARM package—an aggre­gator. In fact, four years ago when the national board was looking at new product options, they met with an aggregator to discuss a partnership rather than attempting to reinvent the wheel. The meeting quickly fell apart. “Those conversa­tions were all dependent on giving up some level of independence, which did not fit the personality of the ARM organization.”

That independence is what sets ARM apart from other member-agent organi­zations, Payan says. “Every ARM member agent maintains the ability to choose which products and services to use. Throughout all of it we’re able to remain independent.”

As Payan travels from region to region attending meetings and getting to know ARM member agents better, he says he’ll keep communi­cating the benefits of the national group, which he says levels the playing field and allows small agencies to compete alongside large organizations. The successful agency, in Payan’s estimation, uses whatever tools are available to distinguish itself from the competition.

Payan will also be pushing the commonality of purpose that ARM brings to independent agents. Despite state group memberships being comprised of competitors, Payan says competition among ARM members is rare. “I’ve often referred to us as conspirators rather than competitors. Conspirators who work together to provide ourselves with the tools to better serve our customers and grow our business.”

For more information:
ARM International
Web site: www.armiweb.com