Having one of the highest employee-to-client ratios in theinsurance industry—one servicer for every two accounts—means, asyou might expect, that KMRD Partners, winner of the 2011NU/AA&B Commercial Agency Awards for Excellence inCustomer Service, can provide exceptional attention to every pieceof business.

And indeed, the firm, founded in 2005 by Kevin McPoyle andRobert Dietzel after they spent 12 years at a top agency inPhiladelphia, prides itself on its client-focused culture—whichincludes, for example, reviewing with a magnifying glass everyterm, condition and exclusion when a policy is first issued by acarrier.

“Most agencies are built on a volume of transactions,” Dietzelsays. “They simply do not have the resources to read every policythey sell in detail.”

What might surprise you, however, is that this determination tostaff the firm so that it can offer high-level risk-managementconsulting services—akin to what a lawyer or accountantoffers—results in KMRD having to be somewhat selective about thosecompanies with which it partners.

Because it delivers high-value extras to its clients, KMRD oftencharges a risk-management fee—which prospects sometimes feel raisesthe cost of insurance to an unreasonable amount.

“We meet this challenge without hesitation by demonstrating thatthis fee enables us to dedicate the resources that make it possibleto actually lower the total cost of risk,” says Dietzel.“We back this up with recent analysis that shows KMRD delivering anaverage savings of 19 percent when clients select us as theirexclusive representative in the insurance marketplace.”

What happens when a prospective client pushes back on the feethat other agencies that rely on commission alone aren’t levying?“When you earn every dollar and deliver a return on investment, itis easy to talk about,” says McPoyle. “If a prospect does notunderstand this approach, we stop our conversation and focus ourresources on finding clients with values that align with ours.”

This approach has paid off. McPoyle and Dietzel’s leadership hasgrown the agency from $12.5 million in premium volume in 2008 to$20 million in 2010. “We developed a risk-management model that wethought would sell well at the time, and we were right,” Dietzelsays.

“Robert and I have been in this business for 18 years. Wecontinue to meet executives, CEOs and owners and show them how weconduct ourselves. Judging from the comments we receive, I know weare doing something special here,” McPoyle says of his agency,headquartered 20 miles north of Philadelphia in Warrington, Pa.,that employs 20 individuals, including 11 commercial-linesproducers.

The agency also has an office in Limerick, Pa. which serves theneeds of small to midsize businesses.

RISK-MANAGEMENT MENTORS

Perhaps the key differentiating service that KMRD offers is itsability to act as the risk-management department for its middle-and upper-middle-market customers—companies not large enough tohave their own full-time risk-management staffs, but big enough tohave a wide variety of potentially catastrophic losses.

KMRD thoroughly assesses the operational risks and cost of riskthat an organization faces, spending time inspecting the workplaceto gain a first-hand perspective and to identify areas that couldexpose the company to uninsured losses. They then develop the mostcost-effective loss-control plan that uses a combination ofinsurance, engineering, contractual risk-transfer provisions,training and education.

“We understand that insurance is actually the most expensive wayto transfer risk,” McPoyle says.

With the client’s input, they next establish a “Risk ManagementInitiatives Worksheet” that documents mutually establishedloss-prevention goals (with completion dates) and specifies theparties accountable for each step—allowing both parties to monitorprogress.

“We’ve allocated our resources so that we can get deep into thevarious details of our clients’ culture, risk appetite, exposures,operations and unsolved issues,” McPoyle says, adding that his teamhas the tools to help clients with disaster-recovery planning,business-interruption analysis and mock OSHA audits.

“We do not just make recommendations; we help [companies]accomplish things they didn’t have time to address in the past,”Dietzel says. “When these risk-management initiatives becomeaccomplishments, we show the carriers an improved risk profilewhich results in better pricing and coverage.”

PROPRIETARY TECHNOLOGY, DATABASE GOLDMINE

In addition to its obsessive focus on risk management,another edge that sets KMRD apart is its use of technology.

Its proprietary management system, KMRD XChange, is afull-powered collaboration tool that gives a client 24/7 access toall its own insurance files, including loss information andanalysis reports, insurance-rating data, contract reviews andcorrespondence files.

And because the firm believes that collaboration is key to asuccessful client/agency partnership, the files are not onlyaccessible on a “read only” basis—clients can also communicatechanges by updating files themselves.

KMRD XChange also has numerous self-service features, lettingclients prepare their own certificates of insurance and print theirown auto ID cards.

The firm’s document-management system enables it to consolidateall the forms-analysis projects it has ever done (more than 5,500,with more added every day). For example, it can search the systemfor all “General Liability Coverage Summaries” for variouscompanies—enabling KMRD to compare a new or renewing client’srates, as well as coverage enhancements and restrictions, withothers in the database.

“The value of this process is that a companyreceives the best coverage—not only the best coverage in itsindustry, but the best across all industries,” says Dietzel. “Weare not aware of any other broker that approaches the process inthis manner.

“Interestingly enough,” Dietzel adds, “most of the enhancementswe negotiate [based on competitive benchmarks in the database] comeat no additional cost. The underwriter will often not offer anenhancement without being asked. By simply asking the question, weare able to make a difference for our client.”

INTENSIVE TRAINING FOR NEW RECRUITS

KMRD, also winner of the Recruitment, Training &Perpetuation award, only hires team members who can readilyrepresent the agency’s code of ethics, which is placed on the backof each employee’s business card:

Integrity first
Clients are the focus of everything we do
Excellence is in the details
We are continuously improving and learning

Dietzel stresses that the agency findsemployees through various channels and doesn’t limit its search toonly those with insurance-industry experience. “We look for folkswho are business people first,” he says, “and who also have theintellectual curiosity to absorb technical insurance andrisk-management knowledge.”

McPoyle recalls how one recent producerhire had worked for a national payroll-services company. Thisproducer expressed frustration that his back office there could notexecute on the products he sold—and therefore he thought he wasmaking hollow promises to potential clients.

“Here’s a guy who wants to do a great job selling, but also hasthe conviction and commitment to be great at customer service,”McPoyle says. “Attitude trumps aptitude with respect to our initialevaluation of a potential employee.”

New employees enter a training program—lasting, incredibly,several years. Weekly training sessions include more than 100coverage areas, and new employees must master each one prior toworking without supervision.

New employees also meet regularly with principals andexecutives, where coverage and policies are reviewed word by wordto ensure the new employee understands how a policy is built andwhat the implications of a particular policy mean to the customer.Daily training sessions include “coffee talks” where the previousday’s events are discussed.

McPoyle credits the training program with instilling a moreprecise agency-knowledge base. “Bob and I come from a mindset thatplaces great emphasis on training. We have moved it up a notch—toobserve, learn and participate in the process in a real-worldenvironment.”

The agency’s mentoring program pairs each junior producer with asenior producer and a high-level risk manager; discussions occuraround topics such as claims management and resolutions, paperlessworkflows and efficient operating processes.

Three employees work on every account, and a junior producer isunable to produce on his own for a period of several years. Thisprocess takes the pressure off new employees—but can also be aproblem for the impatient.

“For many people, this can be frustrating,” Dietzel admits.“They were very accomplished in their previous careers, but nowthey can’t sign a letter. It takes time and commitment on theirpart, but ultimately everyone will incorporate their unique skillswith the KMRD philosophy of making a difference by managing thecost of risk.”