Marketing Agency of the Month

Right place, right time, and a lot of hard work

Mandatory coverage and strong sales skills combine to help California agency succeed

By Dennis H. Pillsbury

"Do you think you can sell insurance?"

"Sure I can."

And with those three words, Joe Jimenez found himself in the insurance business.

Joe had been selling furniture until he started dating Sandi in 1985. Sandi's parents, Ed and Flory Slocomb, owned College Student Insurance Service (CSIS), Garden Grove, California, a franchise operation that they bought into in 1970. When the relationship between Joe and Sandi started looking serious, Ed and Flory asked Joe the aforementioned question and the rest is history. "I was one of those lucky guys who fell into a perfect situation," Joe comments.

He and Sandi were married in 1986, so that worked out very well.

In 1991, they were successfully growing the business and decided to "spread our wings and open our own office." Ed and Flory were ready to retire and offered to sell their business to Joe and Sandi. "We worked out a buy/sell agreement and the business was transferred to us. The total business amounted to about $1 million in sales," Joe says. By that time, the agency had transformed itself from one designed to provide affordable insurance to college students to a full-service independent agency.

"Many of our clients had graduated and started families of their own," Joe points out. "We've continued to handle their insurance needs and are now handling the needs of second- and even third-generation clients. While it may be the affordable coverage that brings them to our agency, it's the service that keeps families coming back," he adds proudly.

New offices help expansion

In 1996, the agency opened a small office in Orange. The timing could not have been better. It came right before mandatory insurance requirements were adopted in California in 1997, and business flowed into both offices as the agency emphasized its guarantee to provide the lowest rate. Much of the business was written with Mercury Insurance, although the agency also promised to check with several carriers to make certain the client got the best deal possible.

Thanks to the mandatory coverage law, only 10 years after Joe purchased CSIS and its $1 million in premiums, the agency became one of the first agencies to receive Mercury Insurance Chairman's Club Award for reaching $1 million in commissions with that company.

To take further advantage of the mandatory insurance law, CSIS opened an office in 1997 in Costa Mesa. They also embarked on a program of acquisition to reach additional areas in the California market. In 2003, CSIS purchased Best in the West Agency and followed that by purchasing a small agency located in Anaheim. "We just kept growing that way," Joe points out, "either by purchasing the total agency or by buying books of business."

Joe continues: "Naturally, we needed to find people that we liked and could trust to run each of these offices, and who better than family? My brother Oscar was in sales in another business, but saw the opportunity this offered and agreed to join me to run the Costa Mesa office. His wife, Sylvia, is the manager of the Anaheim office."

Centralized service

The rapid growth also necessitated streamlining of functions so that customer service could be centralized in the Garden Grove office. "We moved into a larger office in Garden Grove and put in an Internet-based phone system that allows us to answer all calls in the Garden Grove office and then transfer the prospect to the office that is closest to where they live and work," Joe explains. Making certain this all runs smoothly is the office manager, Cecilia Gutierrez, who is Joe's cousin.

"We also instituted upload and download in order to remain lean, as well as allowing us to have a paperless environment. Thanks to technology, we are able to run seven offices efficiently with only 22 people. Downloads allow three people to do the work of many," Joe maintains.

He adds that "we're really still operating in the old-fashioned mode of dealing with one client at a time, but doing it in a new-fashioned way, thanks to technology. Insurance marketing is still all about relationships and good service. We can never forget that. The key is communication. Technology just allows us to communicate more efficiently."

Politically involved

The insurance market has always been affected by politics, and that is especially so in California where referenda can result in a drastic change in the marketplace, as can a new insurance commissioner.

We all remember the infamous Prop 103, adopted through voter referendum in 1988. The proposition seriously disrupted the California insurance market by mandating a 20% rate rollback, unless such a rollback would lead to a company's insolvency. It also changed the rating factors used by personal auto insurers. And it changed the state from one that was considered an "open competition" state to a "prior approval" state. It also required that insurance commissioners be elected rather than appointed by the governor. The first elected commissioner was John Garamendi, whose name is remembered by anyone in the industry who tried to get a rate increase approved.

One result of the activist insurance department was a workers compensation market where the State Fund became one of the largest writers in the country as losses forced private insurers to leave the state. The losses were so severe until reforms were enacted in 2004 that California results actually added more than five points to the national workers comp combined ratio!

Joe looked at this situation and decided that he needed to be involved with the associations that deal with the insurance department and the state government. He became president of the Alliance of Insurance Agents and Brokers in 2007 and also was appointed by Insurance Commissioner Steve Poizner to the Agent and Broker Advisory Committee that reports to the Insurance Department.

"I really enjoyed the political side of things but didn't feel that the Alliance was sufficiently engaged in watching the insurance department," Joe points out, in explaining why he decided to leave the association after several months as president. "We needed an association that would focus on the insurance department and its actions," Joe says.

So Joe—along with well-known insurance regulatory attorney Bob Hogeboom, with the law firm of Barger & Wolen, and other Alliance board members—founded the Insurance Agents and Brokers Association of California (IABAC) and became its president in May 2010. In one of his first actions, he worked with the board to rebrand the association, changing the name to Cal Agents, or California Agents and Brokers Insurance Association, in order to differentiate it from other agents associations.

"The goal of Cal Agents is to aggressively defend producers' rights to operate freely and fairlyin California by providing fair regulatory and legislative protection, as well as protection against potential abuses by any other group, company or organization," Joe says. He adds that the association also provides "quality products and services that help our members compete more effectively in the state."

Joe says that the association could well face a challenge this year following the election of Dave Jones as insurance commissioner. Jones is a liberal Democrat from Sacramento, who gives every indication that he will be an "activist" commissioner.

Joe admits that he "likes to be busy," so heading up the agency and Cal Agents just wasn't enough. He also has been involved with the California Mercury Insurance Producer's Council and this year was named its president.

Surrounded by good people

"I'm very lucky to have the right people around me," Joe points out. "I'm surrounded by people I like and trust. Even though we've grown and have seven offices, we still all get together at least once a month and exchange ideas and learn from each other. I've always looked for nice people to fill any position. I can always teach them insurance, but I can't teach someone to be nice.

"And that's very important. Our people like helping people. That means that they work especially hard when there's a claim to bring the claimant back to where they were before the incident as quickly as possible. Our clients call us when they have a claim, and we follow through. That's been a big differentiator for us. We have many, many clients who have been with us for more than 30 years."

Rough Notes Magazine is proud to recognize CSIS as our Marketing Agency of the Month. They're nice people.