When Paul C. Higginbotham founded his namesake insurance agency in 1948, he never could have imagined the Fort Worth, Texas company would grow into one of America’s top independent property/casualty agencies.
Started as a personal insurance brokerage firm in Fort Worth’s Riverside neighborhood, Higginbotham today has more than 85 offices in 16 states. The insurance broker and service provider consistently ranks among the top 100 independent agencies based on annual revenue.
2023 marks Higginbotham’s 75-year anniversary, a milestone that CEO Rusty Reid says is made all the more special because Higginbotham’s employees get to reap in its success. 
“The people in our offices are not simply ’employees’,” Reid said. “They are our family.”
For the first 40 years of its existence, Higginbotham operated as a family-run agency. Paul Higginbotham’s nephew William “Bill” Stroud purchased the company in 1962 from Higginbotham’s wife and ran it for the next 27 years.
When Stroud decided to sell the company in 1989, he put it in the hands of Higginbotham’s employees through an employee stock ownership plan (ESOP). That same year, Reid was named CEO.
“When we went down the path of being owned from one person to all employees, the decision was really twofold,” Reid said. “Number one, if I was the 12th employee, that meant there were 11 people here before me. They built what the company had been before I got to take over. It was important for me to see not only that I was going to obviously now get to share an equity, but so were they. The other thing that I saw was that oftentimes the top drivers of revenue within those agencies that we were working with, if they didn’t share equity with (their employees), they’d pack up and become competitors.”
As CEO of Higginbotham for the last 34 years, Reid said he’s seen how employee ownership makes people more productive and aligns interest by knowing they’ll profit in the company’s success.
ESOPs also tend to improve retention, as they typically have a vesting period before an employee becomes eligible to exercise their option to purchase the stock. The longer an employee stays with a company, the more they stand to gain.
“It’s hard for me to go, ‘we have a great year, and it’s only a handful of people in the corner who are gonna benefit from it,'” Reid said. “For me, it should be all those that help make it a great year need to participate, and that’s really been our vision and what we’ve been driving to literally since way back when Bill Stroud gave us this incredible opportunity to own this company called Higginbotham.”
Learning From Mistakes
Reid likes to say he went to the University of North Texas for his undergrad, then quickly got both his master’s and doctorate at Higginbotham. Reid joined the agency in 1986 as a 24-year-old. Within three years, he was named Higginbotham’s CEO.
Unsure if he was experienced enough for the job, Reid went to his mentor, Bob Ballard, and admitted, “I just don’t know.”
Ballard responded, “Listen Rusty, don’t undermine experience. You got some people who have had 15 years of experience, but it’s one year repeated over and over and over again. I’ve watched you over the last three years, and you’ve got 15 years of experience built in those three years.”
“Bill Stroud was one who would give me this opportunity and if I did well there, he would give me the next opportunity, and if I did well there, he gave me the next opportunity,” Reid said. “As we’ve built this company, we’re not scared at all to put youth in roles of significance.”
Reid sees a similarity between developing young talent and raising children.
“There’s a balance of wanting them to make mistakes, because without mistakes they don’t know what reality is all about,” Reid said. “The same holds true in a business. Bill allowed me to make a lot of mistakes and boy, I made a lot of them. It’s like anything else in life, you’ve got to learn from those mistakes.”
The trust that was instilled in Reid to make mistakes at a young age is passed on in the way that Higginbotham leadership interacts with employees today.
“I really encourage our leadership team to don’t beat people up for their weaknesses, but support their strengths,” Reid said. “We’ve put in strategies, and many of them have worked extraordinarily well, but some haven’t. And instead of dwelling on those that didn’t go well, we focused more on the strengths of what did go well.”
More Than an Insurance Broker
One of Higginbotham’s most successful strategies came in the late 1990s, a time when the was enjoying significant growth. Higginbotham decided it needed to deliver more than just an insurance product to its middle-market sector, which serves businesses primarily between 50-1,000 employees.
“We very much began to ramp up risk management services to support the property/casualty side, which in our world that meant to have a claim advocacy on staff, loss prevention folks on staff, lawyers on staff to help review contracts to transfer risk away from them should they not get it,” Reid said. “That really played true in the construction, energy and real estate marketplace.”
Higginbotham repeated the process for its employee benefits business. The company also expanded into specialty leadership practices built around Texas’ major industries.
The risk management and benefit administration platforms come at no cost to Higginbotham’s producer force nor its clients, Reid said.
“We were far ahead in front of the curve in making sure that we’re not just coming around once a year and delivering a renewal,” Reid said.
Higginbotham’s expansion into other services paralleled its geographic growth. 2007 kicked off a decade-and-a-half of aggressive acquisition, beginning with the Best in Texas strategy, which brought in partners across the Lone Star State to what was already a growing organic model.
From there, Higginbotham turned its attention to states contiguous to Texas and the Southeast.
“We’ve focused our footprint on areas of the country where relationships are very, very important,” Reid said. “I hate to use the term Texas Hospitality, but it’s very much that way.”
Higginbotham’s geographical expansion correlates with areas of the country, specifically the Sunbelt, exploding in population and economic development.
“When things are booming, everybody needs insurance. We are very much strategically aligning not only with good firms that are there that enjoy impeccable reputations such as Higginbotham, but we also know that from a pure economic development standpoint they’re in areas of the country that are really enjoying significant growth. People are thriving in those markets and more importantly going into those markets.”
Today, Higginbotham’s clients are exposed to risks ranging from California wildfires to Texas earthquakes to Florida hurricanes.
With so much exposure, Higginbotham depends on the strength and trust of its relationships with insurance companies.
Reid said that Higginbotham oftentimes gets capacity that other brokers don’t get because of its existing experts in certain fields like real estate, energy, and construction. Carriers can also count on Higginbotham and its partners to act in good faith.
“We can be bullies to them, but that ain’t going to get us very far,” Reid said. “You got to be nice and collaborative, and we find that really pays dividends for us.”
Powering Through COVID
Higginbotham’s focus on human relationships as well its existing technology platform allowed the company to thrive during the COVID-19 pandemic.
Higginbotham is unlike some of its peers, Reid said, in that when people join the company, they become Higginbotham. Employees get the breadth of the services Higginbotham provides, such as its agency management system.
“Because we were integrated, candidly we didn’t miss a beat,” Reid said. “Immediately when people had to operate from a remote basis, the fact we were already connected from an IT perspective, it wasn’t like, ‘Oh god, now how do we connect?”
Higginbotham decided early in the pandemic that it was vital to reopen its main Texas offices as early as possible. Higginbotham remained in regular communication with its employees, holding a weekly COVID-19 task force meetings where it would send out findings.
Reid credits Higginbotham’s COVID-19 strategy for mitigating employee turnover. Turnover ticked into the double digits in 2021 during the Great Resignation – but “still outperformed” competitors.
Higginbotham was one of the first brokers to get back out on the road, a move that Reid said gave the company a head start coming out of the pandemic.
“We were out seeing clients and prospective firms when everybody else was still sitting on their heels,” Reid said. “Body language is real. I think if you believe it’s a people business, being able to get eyeball to eyeball gave us a great launch ahead of our peer group.”
Investing in the Future
As Higginbotham looks back at its first 75 years, a constant value running through its history is that its greatest strength are its people. To ensure Higginbotham is built to withstand the changes facing the insurance business, the company has developed its own educational and training system over the years.
Higginbotham has long had a newbie program mostly geared for people on the production side of the business. The company recently launched Higginbotham University, a program geared for people straight out of college or switching careers. In the last three years, Higginbotham created an account management curriculum to lure in more talent to that side of the business.
After graduating from the curriculum, employees are assigned to a team, where they have the opportunity to grow up in the company. Employees will decide whether they want to stay in account management or switch over to the production side. Higginbotham also encourages existing employees to continue their education. The company pays its team to get professional designations.
Higginbotham University graduated a class of 24 last year and now has a waiting list of more than 30.
“It’s really helpful for our partners across our footprint because they can now look to Higginbotham University to help identify people they think can do well in our industry” Reid said. “We don’t want to just sit around and recycle other people. We find that if we build from within, we’ve had great success from the production side and that we’re going to have equal success on the account management side.”
Higginbotham’s history of developing employees from within is illustrative of the values its founder instilled some 75 years ago.
“Paul Higginbotham, he’s probably looking down at us going, ‘My lord, you mean the little company I started on Race Street is is celebrating their 75th anniversary this year?’ It’s a business where everybody gets to own a piece of the rock, so to speak,” Reid said. “It’s gotta be exciting for him. I know it’s very exciting for me.”
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