Seattle Broker Builds Business On PersonalRelationships

Kibble & Prentice helps build Portland high-rise andrebuild business under a cracked Washington state Capitol dome onfoundation of customized client solutions

With a diversified operation and a team of less than 200employees, Kibble & Prentice aims to excel in an area thebroker believes is at the heart of the insurance business buildingpersonal relationships.

“We are better than our larger competitors at personalizing therelationship side of the transaction,” said Mike Gano, president ofthe Seattle-based firm's property-casualty division.

Each individual client receives custom-tailored responses to itsspecific risk issues, he explained.

According to Mr. Gano, the personal solution for the p-ccustomer involves more than meeting the insurer and discussing therisk. “It is a combination of listening [to clients] and askingquestions, knowing the marketplace, and having the relationships inplace to get these things done.”

To illustrate the point, Mr. Gano described the firms work witha client that was building a high-rise project with residentialspace in the Portland area that was having trouble gettingaffordable coverage. While others were unable to help, Kibble &Prentice went out and “took the time to understand the project andthe issues,” he said.

Understanding the issue meant creating a spreadsheet of theclient's many diversified holdings, which ranged from commercialretail buildings to apartments to golf courses between 200 to 300locations in total. The risks were spread among many insurers, oneof which was a “B”-rated carrier.

“The placements were at a financial level we do not like tosee,” Mr. Gano noted.

After examining the totality of the risks, looking at all thelocations, premium allocations, property descriptions and claim'sexperience, Kibble & Prentice was able to “paint a picture” ofthe client's overall exposure to prospective carriers, andconsolidated the book with two “A”-rated carriers.

“We were able to consolidate their insurance in a morecost-effective manner,” he said.

For the one high-rise project, the consolidation resulted in aprogram that was affordable enough to allow the client to build theinsurance costs into the project and get the job completed.

“We are good at finding solutions and forming relationships thattell the story in a way that allows [such] a project to getcompleted,” he went on.

Building Three-Legged Relationships

But client relationships arent the only relationships that thebroker looks to nurture.

“We spend a lot of time working on developing and maintainingour relationships with our carrier partners,” Mr. Gano said.

One carrier partner, Seattle-based Safeco, nominated Kibble& Prentice for this National Underwriter profile.

“We recognize them as a great partner,” said Safeco's ChuckBlondino, sales manager. In addition to giving high marks to thebrokerage firm's professionals for being “very thorough in whatthey do,” he explained the longevity of a carrier-brokerpartnership that dates back to 1980.

“When I say they are a great partner, I am saying that they workwith us that they value the relationships they have with our salespeople, the face-to-face relationships they have going,” Mr.Blondino said.

Because of the strength of relationships that the broker haswith insurance underwriters, he added, customers benefit from the“impact that Kibble & Prentice brings when they come to thetable.”

To Mr. Gano, “working with carriers” like Safeco involves morethan maintaining one-on-one relationships with insurerrepresentatives. “We get our insurance company people together withour clients,” he said. “We don't see this happening a lot with ourcompetitors,” he added.

“We bring underwriters out during the renewal process, or evenif it is a new piece of business, to meet the client and talk aboutobjectives,” he continued. “We see this as a three-leggedrelationship ourselves, the client and the carrier.”

“The majority of the time, when you can get the client and thecarrier talking, and they have a personal relationship, all of asudden the issue goes to the top of the to-do stack, and theunderwriter has a more vested interest in seeing a more positiveoutcome.”

“That really helps you when you are discussing pricing andcoverage. We really believe in that relationship side of theledger,” he said.

More than commercial insurance

Kibble & Prentice is organized in two divisions the personalrisk management-private client group and commercial services.

On the personal lines side, the broker offers high-net-worthcustomers, including those that have placed their commercialinsurance business with the firm, a broad array of financialpersonal services.

“It gives us more flexibility and diversity in what we can offerthe [commercial lines insurance] client,” he said. “We find most ofour clients like the one-stop shopping. Executives like the fact wecan protect their corporate assets as well as their personal assetswith life insurance, long term care or homeowners insurance.”

The division of services, he said, makes it easier for customersto understand where to go and who to see when they have an issue orcomplaint that needs to be dealt with.

“When the client thinks of it in terms of private client andcommercial risk management, it is easier for them to visualizethat. If it is a personal issue, they can go here and talk tosomeone about their personal issues, and if it is their commercialbusiness, they know who the people are to talk to on theircommercial accounts.”

The structure “has served us really well. It has allowed us tohave a very concise and believable message,” he said, contrastingthis with the message of big brokers who might say they have 50,000people worldwide. “Well, what does that mean? Can you deliver theservice?” he asked. “That is the most important question toanswer.”

Small, but nimble. Kibble & Prentice deliversexperts and custom-tailored responses.

“You can have 10,000 employees, but if the client does not feelthe benefit of having those people by being able to access theexpertise because your model is cumbersome, then is having those10,000 employees beneficial to the client?” Mr. Gano asked.

“What we say is we have 170 associates, and we have strategicpartnerships with a number of [outside] specialists, includingGlobex [an international broker's association] for internationalaccounts. If our client has an issue, we can custom tailor theresponse. We call it customer risk management,” Mr. Gano said.

“That is our philosophy. We can hand pick the individual orgroup that will best fit our client's needs.”

The big brokers, while offering a vast structure of experts, maynot always be able to get clients in touch with the experts theyneed, he went on.

In 2001, for example, an earthquake measuring in magnitude of6.8 hit Seattle causing widespread damage, including a crack in thestate's Capitol dome. A historic building, home of “a longstandingprivate club,” suffered significant damage in the quake, explainedMr. Gano.

During the claims process, questions arose about how much of thedamage resulted from the quake and how much was just a byproduct ofthe buildings age. There were also significant questions aboutbusiness interruption losses. The club argued that it could notattract new members and was unable to hold outside functions in thebuilding that would generate revenue. The flipside of the argumentcentered on how much of the business loss was from the downturn inthe economy and the loss of interest in joining clubs.

“There was a huge discrepancy between client expectations andwhere the insurance company was in settling that claim,” henoted.

The club became a client of Kibble & Prentice after theearthquake. To help its new client, the firm brought in a forensicaccountant who reconstructed the clubs records for the businessinterruption claim over a five-to-10-year period.

“We were able to lay out a scenario that was believable andaccurate to the insurance company, then sat down as a team tofacilitate the discussions, which ultimately lead to a satisfactorysettlement all the parties could live with,” he said. “The clientfelt good about it; the company felt good about it; and weaccomplished this by bringing in an outside specialist.”

Because it is smaller, Kibble & Prentice tends to understandthe client's local needs better, he said. The relationships it hasdeveloped over the years and its current, growing success are proofof that, he added. One measure of this is the firm's retention ratethat stands at 96 percent based on commission income, Mr. Ganosaid.

But even that figure does not fully illustrate the firm'ssuccess, he noted, explaining that, most often, when the brokerloses a client, it's because the client is either acquired ormerged, or simply goes out of business. “We don't lose asignificant amount of business to our competitors, but it doeshappen on occasion,” he confessed.

“We compete extremely well in the middle- market range,” headded. “And most people who move business [to us] move it becausethey like the relationship approach” and because they like the fact“that we are creative in finding solutions for their problems.”

The personalization of accounts, Mr. Gano said, is especiallyimportant with the middle-market customer. The customer relies onthe broker as its risk manager, because even though a middle-marketfirm may be a big account, it still isn't always large enough toafford a professional risk manager.

Building A Diversified Approach

By Mark E. Ruquet

The story of Kibble & Prentice began in 1972, when two lifeinsurance agents, Ted Kibble and Arnie Prentice, decided to starttheir own agency, according to Mike Gano, president ofproperty-casualty division of the Seattle-based firm.

Soon after the founding of the agency, the two men envisioned adistinctive financial services firm offering property-casualtyinsurance, employee benefits, retirement planning and investmentconsulting.

It was a dream, he said, that has become a reality.

Both men are still active in the firm today. Mr. Prentice ischairman and chief executive officer of the firm, and Mr. Kibbleremains actively affiliated with the firm as one of itsfounders.

“These are two guys who were very successful in the lifebusiness and were very visionary,” said Mr. Gano. “They have builta diversified model that is very unique in this world.”

Their vision for the business has created an agency that is ableto offer a strong variety of products to clients, said Mr. Gano.While the largest portion of Kibble & Prentices revenues comefrom property-casualty insurance, the firm is is not whollydependent on that segment. In fact, unlike agencies showcased aspart of National Underwriters Agency of the Year Awardprogram over the last two years, where commercial p-c typicallyaccounted for 85-100 percent of those agencies businesses, p-caccounts for 48 percent of the business at Kibble & Prentice.Employee benefits accounts for 37 percent, and the rest offinancial services, such as retirement planning services, lifeproducts and investment consulting, account for the remaining 15percent.

From a business perspective, this setup offers the firm adiverse source of income that keeps the firms income humming. “Ifthe economy is in the tank, our [property-casualty insurance] fees[may be] down accordingly,” said Mr. Gano. “But [the diversity]gives us more of a non-cyclical look.”

Kibble & Prentice is among the largest privately held firmsin the Seattle region, said Mr. Gano, and has grown 25 percent overlast year. Today, it boasts more than $400 million in premium.

On the question of whether the broker would consider turningpublic at some point, he said it was a possibility somewhere downthe road, “but it is not something we are thinking about.”

For the future, he said, the firms plans are to remain privatelyheld and independent.

“We see ourselves as an acquirer, not the acquired,” hesaid.

In September 2003, to address the needs of health practitionersin Washington, the company announced it was expanding its medicalliability practice. In January of this year, it acquired BGI Inc.,a broker in the Northwest insurance industry. This was the fifthacquisition in two years for the firm.

Mr. Gano said the firms business plans call for continued growthat a rate of 15-20 percent and that the firm expects to double itssize in the next five years, attracting good talent to theorganization as it grows.

“We feel comfortable where we are,” said Mr. Gano. “We want toremain Kibble & Prentice. We feel so strongly about the qualityof the working environment for our associates that we really wantto perpetuate that.”

“We do not see any benefit to our clients or our associates tobe a part of a larger firm. So our goal is to become largerourselves and provide opportunities to people through growth in thecompany.”

Reproduced from National Underwriter Edition, June 18, 2004.Copyright 2004 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.