4 ‘Ace’ Agencies, 4 Success Stories

Despite Soft Market, Firms Have Managed to Grow

They’re all different – one’s big city; one’s suburban; one’s country; one’s small-to-medium size town. They operate in different parts of the state and have different mixes of business, but these Texas-based independent insurance agencies have one thing in common: They all grew organically by more than 10 percent last year.

Swingle, Collins & Associates in Dallas, headed by Frank Swingle, has 50 employees. The agency’s book of business is 90 percent commercial, 10 percent – mostly upscale – personal lines.

Ark Assurance Group Inc. in Tyler has 14 employees. Its property/casualty business runs along a 60/40 split, with personal lines doing the heavy lifting, according to agency principal Criss Sudduth.

Josh Hamann’s Hamann Insurance Group in Katy has 22 employees. Commercial accounts represent 80 percent of the business in Hamann’s agency, with personal lines bringing in the remaining 20 percent. Out of that 20 percent, around 10 percent is high net worth, Hamann said.

Texas Insurance & Financial Services Inc. has 16 employees. Gordon Sorrel, from tiny El Campo (population just upward of 11,000), said his agency has a mix of crop insurance, life and health, personal lines and commercial. Being from a rural area – El Campo is located about 70 miles southwest of Houston – his commercial business tends to be related to agriculture.

The secrets to their success are multiple, but there are a few commonalities: creating a sales culture, getting to know their markets, developing niches, seeking referrals, cross-selling and rounding accounts. How they go about implementing those practices are as unique as the operations themselves.

A Sales Culture

“The biggest thing that we did was change to a sales culture,” Swingle said during a panel discussion at the Independent Insurance Agents of Texas’ annual conference in June. “We’ve really tried to institute a sales culture of making calls.” He said the agency is also concentrating on business they have a good chance of writing. “We try to figure out what the hot button is with the customer, [and figure out if] he wants to do business with us. … But we’re not in the practice of quoting business.”

Sorrel said his agency has been working hard to convert from a service culture to a sales culture, as well. If your agency is going to grow, Sorrel said, “you’ve got to have a sales culture. … What that means is, everybody in the office – the receptionist, the accountant, the back room – everybody has got to be on point when it comes to generating sales. Every dollar that comes into our agency is from commissions, so therefore, everybody’s involved. We try to promote that attitude. We hire to that attitude.”

These agency principals also include themselves in the selling process. “The important thing in our shop is, everybody sells,” Swingle said. “We also critique each other’s accounts – which has really helped us learn.”

Sorrel said he competes with his agents. He loves it, and they do too. “My agents like to see me selling,” Sorrel said. “I’m a whole lot happier when I’m selling and it keeps me out of their hair.”

Sudduth, who’s not only an agency principal but also its “IT guy,” participates in tag team selling if a producer requests it. “I’m there for my producers,” he said. “If they come across a risk they don’t understand, that’s what I do. I go with them, support them. Actually we’ve found that the tag team approach has been extremely successful as far as calling on customers. So I just make myself available to all my producers.”

Hamann said while he still sells, currently he’s beginning to concentrate more on developing his producers. Hamann added that developing partnerships with complementary service-providers, such as wealth managers and benefits agencies, has been responsible for much of his agency’s growth. “We’re really doing referrals and we’ve had a lot of success with that,” he said.

Sorrel also has experienced growth through referrals. “The year before last we had a phenomenal year of growth and the largest portion of it was the result of a referral program. The agency just really blossomed. What we found was this past year we needed to carry that forward.” Rounding accounts and cross-selling have also helped increase the bottom line, he said.

Market Relationships

Developing relationships with carriers and determining what those markets want to write is a major focus at Swingle, Collins. “We find out what risk the market wants to write and then target our marketing toward those risks,” Swingle said. “That has been very successful trying to figure out what it is we have to sell and go sell them rather than coming back and trying to fit square pegs in round holes.”

Sudduth said he does the same thing. “I got with my carriers and say, ‘tell me what you want.’ and my guys went and got it.”

He also makes sure his staff is involved when a market leader comes to the agency. “I make sure my staff visits with them,” Sudduth said. “They get first hand information on what the carrier is looking for. If I’m not there, [market reps] are welcome to talk to my staff.”

Sorrel agreed that market relationships are essential, adding that developing niches and marketing to those niches has quantified his agency’s client base. “We already have markets that will write those particular classes of business, so when we focus on those areas, we know we have the market.”

Niche Power

For Sorrel niche marketing is the way to go. “We work primarily in three niches,” he said. “We work with landscape contractors, we work with wholesale nurseries, and we work with beekeepers. We have national endorsements.”

Although operating in a small-town atmosphere, Sorrel said his agency writes a lot of business both across the state and nationally. He credits niche business with bringing in a lot of those accounts. “The good thing about writing in niches is you have companies that say, ‘we like this class of business. It gives you a track to run on and you’ve got markets out in front of you for the business you want to get.”

To achieve success in niche marketing, according to Sorrel, it’s necessary to learn as much about that particular industry or class that you can. “When you’re working in niche markets, you’re actually immersing yourself in it. You want to know everything you can about that industry. You want to learn their weaknesses, their strengths – everything you possibly can because you want to be the expert,” he said.

It’s also important to build upon what you already have or have access to. “We’re in an agricultural area, so it stood to reason that we work in niches that were addressed by agriculture in some fashion – wholesale nurseries, landscape contractors, beekeepers. One kind of led to the next,” Sorrel said.

Hamann said the newest niche for his agency is the high net worth personal lines market, which he “stumbled into by accident.”

He met a man at his church about a year and a half ago that had his insurance through a captive, and was “grossly underinsured,” Hamann said. “We ended up writing it with one of our carriers. It ended up being about a $30,000 personal lines account. And I realized, ‘hey, that’s like a small commercial.'”

As a result, his agency shifted its focus away from standard personal lines, partly because of the saturation in the Houston marketplace and partly due to his recognition of opportunity in the high net worth market. The thing about high net worth individuals, Hamann said, is that they “also own businesses, so that was a good leeway into writing their commercial business as well.”

Sudduth said his producers also have developed niche specialties, among them – RV campgrounds, oil and gas consultants, and churches.

As a result of the downturn in the energy field and the economy as a whole, many oil and gas consultants were losing their jobs at big corporations and going out on their own, Sudduth explained. The niche was one Ark Assurance fell into after Sudduth got a call from a consultant who had been employed by a company that had been a customer of Sudduth’s agency. The man was starting out on his own and needed insurance. “So we started on that road,” Sudduth said.

Another niche, the RV campgrounds, developed as the result of a producer being a camping enthusiast. “He goes after RV campgrounds because he has a camper. He’ll go stay in a park for a weekend, hang out with ’em and the next thing you know we’re writing their insurance. It’s worked out real well for him; he’s become the campground expert.”

Sorrel said his advice to an agency interested in developing niches is to start by looking at the kinds of businesses they have on their books. “See what classes of business you currently write, what you’re good at, what you have markets for. And connect the dots. The next step is to start immersing yourself in that industry. Learn it as well as you can.”

Hamann, Sorrel, Sudduth and Swingle participated in the panel discussion: “How We Did It: An Idea Exchange for Agency Growth” during the Independent Insurance Agents of Texas Conference and Trade Show, held in Ft. Worth in June.

Topics Texas Agencies Agribusiness