Even though Rose & Kiernan Inc. (R&K) started as a family business, the independent agency has been operated by its employees for the past 40 years. Expanding with 195 employees in 11 offices located in New York and Connecticut, R&K is committed to the professional development of its staff to provide its clients with only the best it has to offer. Employees are encouraged to obtain advanced insurance degrees, industry professional designations and to participate in regular IT and workflow training.
R&K offers its own academy for its staff, current clients and future clients, and expects continuous improvement through internal training and external seminars. R&K Academy provides educational topics in its RKRx program, health risk management, pollution exclusions, ERISA, loss sensitive plans, fiduciary liability and more.
Read CEO John Murray's Q&A: "The Graying of America: Can insurance cope?"
History
R&K was established by Rufus Rose in Albany, N.Y., in 1869, and was succeeded by his son William upon his retirement. Peter Kiernan joined R&K as a partner in 1901, and managed the company with his son for the next 60 years.
In 1974, Kiernan's son left the agency to assume a presidential position with a bank holding company, which brought him to sell the agency to employees in May of the same year. Luke Henry, a long-time employee, was elected as the agency's new president that October.
Building on success from employee ownership, R&K formed its ESOP in 1987, a decision designed to perpetuate the foundation of the agency by developing an employee-only market for its stock. Within the last 15 years, its ESOP has seen its share value increase more than 600 percent, and retirees have a ready market for the sale of shares they have acquired during their working careers. R&K is obligated to its employee ownership and understands the need to recruit, educate and encourage young professionals in its workplace, which will ultimately continue its business.
Coverage
R&K represents most national and regional property-casualty and benefits insurance markets, with targeted special services in construction, higher education, healthcare, human services providers and chemical, retail and automotive risk. Value-added services are provided specifically to each insurance practice and specialty. For example, the construction niche includes proprietary coverage forms, surety capacity analysis, third-party claim review and first- party claim avocation. Additional services for the benefits practice include online carrier interface, plan design pricing and modeling, proprietary prescription drugs carve-out program and program trending and analysis.
The split between its lines of businesses is 40 percent commercial property-casualty, 40 percent from employee benefits practice, 10 percent from personal lines and 10 percent from profit sharing and miscellaneous. Its annual revenue is approximately $40 million.
R&K uses Applied (TAM) automation system capabilities, including collateral analysis, loss triangulations and interface carrier enrollment for employee benefit products, which offer billing and enrollment reconciliations, flex spending and balances and other uses. These services contributed to R&K's annual 95 percent client retention, reflecting high customer satisfaction.
"R&K provides traditional brokerage services for middle markets and Fortune 1,000 customers," said John F. Murray, Jr., president and CEO. "R&K prefers to act as a value-added brokerage partner with all client engagements."
Murray joined the agency in 1994 after leaving Marsh & McLennan Inc. as its managing director. He began his career with the insurance industry with Employers of Wausau as a sales professional right after graduating from Siena College in 1979.
As CEO of R&K, Murray is compensated based on a producer formula that the agency encourages in a sales culture. In addition to maintaining the book of business, Murray must meet new business goals, produce and staff recruitment, hold community relations, participate in national associations, strategize planning and implementation and assist with carrier relationships.
Market trends
Even though the soft market continues to corrupt insurance businesses, R&K is taking advantage of market trends. "Similar to all large brokers, R&K is orchestrating very favorable pricing outcomes in the property-casualty insurance marketplace for our clients," Murray said. "We are seeing reduced insurance pricing which, in many instances, results lower brokerage income. This income is replaced, and our firm continues to grow, by developing new customer relationships and cross-selling products to existing customers."
To stay above the competition, R&K anticipates customer needs for property-casualty and employee benefit products, along with service delivery. It seeks to enter markets where solutions are needed and can be offered, including services that differentiate the agency as a business partner.
R&K most recently acquired the Daniels Agency in 2005. Located in the Hudson Valley region, the third-generation regional broker had revenues of about $12 million at the time of the acquisition.
R&K also uses best practices as a tool to benchmark the continued success of the agency, and to network with its peers across the country that it does not compete with in its existing markets in order to share ideas, strategies, technology advancements and growth trends.
Expansion plans
R&K has been known as a strong service company with high ethical standards and client service, and maintains as a sales organization. "We continue to emphasize the importance of this commitment, but have designed compensation and workflow procedures that are more focused on new business sales goals and opportunities," Murray said. "We continue to prosper despite economic and market conditions without sacrificing any of the quality expected by our customers."
The agency adopted a model of complete transparency with customers in 2005. This involves having all commissions, fees and profit sharing arrangements disclosed and compensated freely with its customers during every proposal.
R&K plans to invest in people and technology for prolong success. "The key to our success is the quality of people that we have been able to attract to our firm," Murray said. "Financial information that may be considered confidential by many firms is readily shared throughout our workforce. Our governance consists of employees who have significant share ownership in our firm, and make decisions through a filter of having 'skin in the game.' This is a collaboration and transparency model that I would advocate for any insurance agency."
