Brady, Chapman, Holland Finalizes Plans To Spin Off Personal Lines Department

Brady, Chapman, Holland, one of the largest independent agencies in the state, is putting the finishing touches on a deal to turn its personal lines department into a wholly owned subsidiary.

The deal, expected to be finalized sometime before May 1, has been in the works for the last two years according to BCH President Jeff Brady. The company, along with one other principal agency and potentially several partner corporations, have joined to “create efficiencies” in a company that will focus completely on personal lines.

The resulting agency, the name of which is being kept under wraps until the deal is finalized, will become a wholly owned subsidiary of BCH and the other agency.

Brady said the companies are shooting for a June 1 rollout, though that could feasibly be bumped back to July 1 due to last minute details. However, the infrastructure of the company is in place, he said.

Initial plans call for a Houston office, which will house all of BCH’s existing personal lines business. Brady said the
company will be putting a “large number” of new producers on the street, as well. The company plans to grow into the Dallas and San Antonio/Austin markets within the next three years.

“We actually hired someone to run this and they’ve already been on staff for several months preparing,” Brady said.

Over the last few years, personal lines have made up between 17 and 20 percent of BCH’s overall business, while commercial, life/health have generated 80 percent of the company’s business.

According to Brady, personal lines has continued to be profitable, but BCH has experienced the same problem as many other commercial shops: the company is not putting enough focus on personal lines business, subsequently letting service slip. Part of the shortcoming is based on producers wanting to move into the “Big Boy” business of commercial lines, Brady said.

“Personal lines get treated as a stepchild sometimes and that’s not our intent,” he said. “If we’re going to survive in the personal lines market we’re going to have to grow it.”

Brady expects the new subsidiary to drive efficiencies in order to deliver the best possible product at the best possible price—passing decreasing expense ratio savings on to the customer.

BCH plans to bring enough volume together so that they can attain higher volumes with select carriers and work with those carriers for improved automation and special products, setting them apart from other carriers, especially direct writers.

Nothing will change with the company’s existing operations, except that commercial lines producers will have the benefit of dedicated personal lines producers in the separate entity rounding out their existing commercial lines accounts and pursuing the personal lines business from new commercial lines clients.

“The object of the whole concept is to have a strong, service-oriented personal lines operation with strong and profitable growth through dedicated personal lines producers, acquisitions of other personal lines operations and providing servicing functions as well as growth of the book for other personal lines agencies who are experiencing the same lack of focus on their existing personal lines book,” said Lenny Bauer, senior vice president of agency operations with BCH. “After the personal lines operation is up and running, we envision bringing small commercial and life and health business into the
operation, as well.”