Filed Under:Agent Broker, Agency Management

Ascending Through Acquisition

Lapre Scali & Co. grows through selectively acquiring other agencies' business

With more than 12 acquisitions and mergers since starting business in 2006, Lapre Scali & Co. Insurance Services LLC, Scottsdale, Ariz., keeps growing with offices in Arizona and Nevada and licensed in all 50 states. Terry Scali, CEO of Lapre Scali, first acquired assets of National Commercial Insurance & Surety Specialists Inc., and following the successful growth and sale of Scali’s first agency, he saw an opportunity to build another new and bigger firm by partnering with Mike Lapre and his successful operations. Lapre and Scali knew each other from previous insurance activity in the marketplace.

Related: Lapre Scali named a finalist in the Commercial Agency Awards for Excellence.

The Lapre Scali acquisitions were purchased strategically to establish offices in Arizona and Nevada cities, and have been a combination of turnkey offices and small agencies, books of business and producers with books of businesses, including programs of business that had a tactful fit.

"Lapre Scali is very selective in its acquisitions and is reviewing and assessing possible acquisitions on a regular basis," Scali said. "There is no target number of acquisitions. Opportunities avail themselves on a recurring basis. They must be complimentary to the growth and market objective, and also provide the opportunity for organic growth beyond the initial acquisition."

With a book of business composed of 76 percent of commercial, 18 percent of personal lines and 6 percent of life and health insurance, Lapre Scali had a gross premium of $95 million last year. Staffed with 147 associates, Lapre Scali focuses on sales program and acquisitions; it also has invested heavily in the sales and marketing segment of the company. It has added 20 revenue producers over the past 30 months, resulting in a total of 32 producers.

Lapre Scali has built its organization with the finest agents, brokers and customer service representatives, who have extensive insurance experience with large, national brokerage firms and insurance companies including Marsh, Willis, Aon and Wausau/Liberty Mutual Insurance.

Growing its business

Along with its company’s experience, Lapre Scali competes with the largest national agencies because of its full-service approach to its clients’ needs.

"There is no account too small, no need too minor, no request too tedious; Lapre Scali clients count on the company’s dedicated employees to negotiate terms, reduce insurance costs, manage claims and simplify the process. Lapre Scali’s priority is to surpass the clients’ expectations," Scali said.

Lapre Scali believes in the application of enterprise risk management, which deals with the client firm as a whole and a broad range of risk including:

  • Strategic, including mergers and acquisitions, R&D, customs and market share
  • Operational, including business interruption, supply chain, fraud, efficiency and safety
  • Human capital, including employment practices, turnover and leadership
  • Legal and regulatory
  • Technology, including intellectual property and information security
  • Financial, including foreign exchange and credit
  • Reputation, including market share and branding

Enterprise risk management goes one step further than traditional risk management, which only look at loss and risk transfer to protect assets at a fixed cost, by looking at risk as having both upside and downside potential.

Lapre Scali uses the same processes for all large accounts. The duties of an agent or broker are to provide adequate and proper coverage at the lowest possible cost; they must be capable of fitting parts together to produce a greater outcome.

Lapre Scali updates its producers and account managers on process and procedures, regulatory environments and form/coverage changes, and all have access and use an in-house electronic resource center managed by the agency for all related information, guidance and checklists to help provide the best possible value and service to meet the customer’s needs. Lapre Scali offers weekly administration meetings to further facilitate changes and updates on an agency-wide basis through video and teleconference.

The legal and regulatory environments in which Lapre Scali operate are constantly monitored and audited by coverage experts, who also work with its agents and account managers to ensure that Lapre Scali holds itself to the highest standards in servicing current and prospective customers.

And although the agency has considered social marketing as a way to increase marketing and identity branding, Lapre Scali does not feel compatible with social networking such as LinkedIn.

"While LinkedIn provides an avenue for business contacts and credentials, clients do not buy their insurance off of LinkedIn," Scali said. "There is no substitute for being personally involved in your marketplace and building a network of contacts through face-to-face meeting. It is also beneficial to have an informative website where you can direct potential clients for information about your company."

HR and IT departments

Lapre Scali’s HR department is unique compared with traditional departments because it operates as a revenue center on the P&L. more coming on this. The department is staffed with three highly qualified HR consultants and analysts with moiré than 50 years of combined work force experience. Teresa Buelow, HR director, was even named a finalist for Arizona Business Woman by Arizona Business Magazine’s January/February 2011 issue. She has also been ranked in the top ten of top executive women in business by Arizona Business Journal in their April 2011 issue.

Lapre Scali is able to tailor services to meet many clientele sectors, from manufacturing to medical institutions, to retail brokers, non-profits and ministries. Its niche sector is employment compliance including, job descriptions, employee handbooks, policies and procedural implementation.

Recently a client with 75 employees who all worked from home office, engaged Lapre Scali to assist in completing payroll forms for its employees. Lapre Scali had the client’s employees meet at the agency branch closest to their homes. Lapre Scali’s staff rose to the occasion much to the satisfaction of the client, and Lapre Scali was able to efficiently put him into compliance.

The IT department at Lapre Scali stays on the forefront of technology providing across the agency a platform of expediency and efficiency, merging technology and timing to advance the agency in its technical and software solutions. The agency promotes green technology solutions.

Lapre Scali initiated a project over a 6-month period to move to a high tech data center located in Phoenix with a centralized flow of distributed high-speed data communication. Lapre Scali now has a farm of servers under one roof, where it is able to see and service all of its local and remote office locations from one central hub in Phoenix.

This project will result in significant dollar savings and efficiencies to the organization, and continue to support the seamless acquisition integration efforts.

Future insights

The future growth at Lapre Scali will be a combination of organic and acquisition, with plans to broaden its path to contiguous states while expanding its national reach. The goal is to double the agency’s size every 5 years or faster, if the opportunities present themselves. The firm is positioned for growth, and the acquisition team can mobilize and integrate very quickly.

"The agency seeks to capitalize on opportunities to accelerate that growth when possible in its current markets in Arizona and Nevada," Scali said. "Further strategic expansion will be in the contiguous states to Arizona, including southern California and east of Arizona, across the southern half of the U.S."

Scali is Lapre Scali’s sole managing member. The three members in current ownership of Lapre Scali include: Lapre, 10 percent; TMS LLC, 25 percent; and S&V LLC, 65 percent. Lapre Scali utilizes employee stock ownership and have 15 employee owner/partners currently. 
When asked how other independent agencies can find success, Scali points to attitude, gratitude and daily effort.

"Agents and agencies need to keep their fingers on the pulse of their customers, the marketplace and the economy, anticipating needs, planning for future growth, always developing markets, opportunity and talent, and being grateful for their current and past success," Scali said.

Other advice Scali gives independent agencies for finding success include:

  • Doing more with less is an often used cliché, but agents and agencies need to know their available capacity and manage to it.
  • Controlling costs to leverage capacity can make the difference in whether an agency is profitable, earning a return for its shareholders and building enterprise value.
  • See your agency as a business, run it as a business and enjoy doing it.
  • Build and support a talent and culture where people want to come to work for you and be successful; where companies want to do business with you and where customers seek you out for your added value.

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