While some agencies have only recently come to embrace the ideaof being a risk consultant for their clients, the concept isnothing new for the agency Parker, Smith & Feek.

“We have always taken the approach that we are a consultingoperation not a sales operation,” says Gregory Collins, presidentand CEO of the Bellevue, Wash.-based firm, founded in 1937.

This consulting focus is reinforced by the firm’s compensationstructure. “Our employees are owners and do not work oncommission,” Collins notes. “They support the concept that we areselling consulting services to clients and not selling them apolicy. Lowering client cost and improving risk-managementoperations is our aim.”

This approach to its business is paying off: Through all thetrauma of the past decade, the firm has more than doubled itsrevenues—virtually all organically.

For this attention to risk consulting and its ability totranslate that into a profitable and healthy enterprise, Parker,Smith & Feek (PS&F) is our 2011 winner of the Agency of theYear Award.

ADVICE—NOT PRICE—KEY TO KEEPING, ATTRACTINGCLIENTS

Focusing on advice not price, Collins says, is the key to thesuccess of the firm, which insures clients on six continents.Creating solutions for their client’s problems by lowering theircost of risk is a concept that is used not only to maintain thesatisfaction of the firm’s current roster of clients. The approachis also an important aspect of PS&F’s marketing efforts for newbusiness.

The firm identifies the solutions that its existing clientsvalue and then approaches a prospective client with the offer to dothe same for them. It helps that the firm has three full-timerisk-control specialists, who are “front and center” at newbusiness presentations, Collins says.

Collins adds that in the current business environment, problemsthat one business faces will have similarities to another.

“What has helped one business be successful may help another,”he says.

This approach has helped the firm secure as clients 10 of the 30largest privately held companies in Washington.

“Our ultimate goal is to build a relationship that positions usas a trusted advisor not just in risk management—but in otherstrategic organizational and management issues as well.”

CORE VALUES & CONTINGENT COMMISSIONS

One major reason for the firm’s success, says Collins, is that“our business operations are always in alignment with our corevalues”—and these values empower every employee to do what theyneed to do for the firm’s clients in solving their issues.

One example of how this philosophy has benefited the firm is howit escaped unscathed from the contingency-fee scandal that rockedthe industry in 2004.

Then-New York Attorney General Eliot Spitzer accused three majorbrokerage firms—Aon, Marsh and Willis—of a bid-rigging andkick-back scheme with a number of insurance carriers. Brokers wereaccused of steering insurance contracts to individual carriers inexchange for lucrative contingent commissions.

Attorneys general in other states launched their owninvestigations at the time to determine if there were similarviolations occurring at other brokerages.

But because PS&F producers receive salary instead ofcommissions, they had zero incentive to steer clients to anycarrier except those with the best coverage for their clients.

Indeed, the firm had to educate account teams about itscontingent arrangements so they would be able to explain to clientshow the firm managed its carrier profit-sharing agreements andillustrate how it had no influence on producer’srecommendations.

Another advantage of an all-salaried staff is that it eliminatesthe competition for credit or splits that are common atcommission-based brokerages.

And the firm can bring together a collection of staffmembers—experts in claims, loss control and contract review—makingthem readily available to clients without “charging back” to anaccount team.

This team-driven approach is an important part of how the firmhandles clients and helps set PS&F apart. The teams areorganized around specific industries (construction, marine, forestproducts, life sciences, etc.) and are cross-disciplinary in thatthey bring together producers with technical specialists incommercial insurance, employee benefits and surety.

“Our clients become accounts of our firm—not of an individualproducer,” says Collins. The advantage to that is when the producerwho secured the business moves on, either from promotion orretirement, the client remains. As proof that this approach works,PS&F maintains an average retention rate of 96 percent.

SEEKS CLIENTS THAT CAN’T AFFORD CHEAPINSURANCE

Not every prospect is a good business partner for PS&F,Collins says. Clients seeking the lowest price for their insuranceplacement do not fit with the culture the firm promotes.

“We are not a good commodity broker,” he says. “We work to lowerthe overall cost of risk. What our clients say they have discoveredis that they are not in a position to afford cheap insurance. Ourculture simply doesn’t support policy peddlers.”

The current soft market, Collins says, has meant reducedinsurance premiums for everyone, giving clients “immediate,potentially short-term solutions to reducing their costs.”

But Collins believes PS&F’s value proposition comes fromhelping clients reduce the cost of risk in any market and at astrategic level. And it does this by establishing long-termrelationships with clients and “continually exploring ways toreduce their cost of risk.”

For example, “when the insurance market is hard and rates arehigh, we help make the tough decisions on limits or deductibles intheir coverage lines,” says Collins. The aim is to give clients“the tools and guidance to maximize the effectiveness of theirloss-prevention and safety programs.”

LINKING UP

On the technology front, PS&F shows its innovative streakwith a proprietary suite of software it developed internally,building on an agency-management software system. They did sobecause what is on the open market “is not good enough for us,”Collins points out.

Having a highly efficient IT system is of extra importance foran agency located in Bellevue—a region with numerous leading-edgetechnology companies that expect their third party to be assophisticated as they are.

With PS&F’s “DigitaLINK” product, clients can requestcertificates of insurance, report a loss, collaborate on documentswith their account-service reps, send secure e-mails to anyone onthe account team, review their polices and track the progress ofjoint projects.

Policies are provisionally posted on DigitaLINK as soon asreceived so clients have immediate access to the (unchecked)policy; clients are then notified when the full review process byPS&F has been completed (see sidebar).

PS&F is also proud of its MarketLINK system that handles allcommunication with underwriters electronically and has theadvantage of letting the sender know when the file has been openedor not. That allows for more effective follow-up, says Collins. Italso creates a database of information that clients can updateeasily the following year during policy renewal.

Other proprietary programs include FileLINK, which allows largedata files to be securely sent over the internet. PS&F’s latestprogram is CertLINK, which speeds the creation and issuance ofcertificates of insurance.

For these efforts, PS&F wins the “Technology” category ofthe awards, in addition to being named “Agency of the Year.”

CLIENT & COMMUNITY OUTREACH

As part of its services, PS&F conducts education seminars inthe basics of insurance for its clients. The instruction is offeredquarterly to clients in Bellevue and annually to those in itsAnchorage, Alaska office.

Insurance 101 is an introductory course, while 102 builds on theearlier knowledge and introduces more sophisticated concepts. Thefirm is planning a session which will focus on managing cyberliability and recently held one on earthquake risks in theNorthwest.

In fact, the company places such an emphasis on training forboth clients and staff that it employs a full-time trainer withmore than 30 years of insurance-industry experience.

Then there is PS&F’s community involvement. Collins says thefirm has a “strong commitment to the Puget Sound area.” The firmencourages employees to get involved on executive boards and tocontribute to and be a part of the community through charitableworks.

For its community-service efforts, the firm was recognized bythe Bellevue Chamber of Commerce as a 2011 Top Corporate Citizen,one of 10 businesses to receive such an honor.

As for winning the Commercial Agency of the Year Award, Collinssays it helps to justify the hard work many have put in during adifficult economic cycle that has witnessed some drop-off inrevenues because insurance purchasing is down.

“We’re very flattered by the recognition,” says Collins. “We’veweathered a lot of different storms. We do great work everyday.This is good timing—a reaffirmation of all that we do well andconsistently within our organization. It is something to feelreally good about in what is still a very, very tough time.”