In 1930, Anthony “Tony” Mahowald left his job as a bankteller to sell life insurance door-to-door in St. Cloud,Minn. 

Today, Mahowald Insurance Agency is still local, independent andfamily-owned. It entered the property-casualty market when Tony'sson Robert A. Mahowald joined the agency and assisted the St. Cloudschool district with consolidating its policies.

When an agency does business for more than 80 years, it collectsits fair share of folklore. During Prohibition, one East Coastinsurer (which Mahowald declines to name) is said to have sent acompany truck to hand-deliver policies to St. Cloud each December.Stearns County was widely known for high-quality moonshine whiskey,so after the policies were delivered, the truck was loaded withenough libations for that year's company Christmasparty. 

Mahowald also gained expertise in the medical/professionalliability market when other agencies, deterred by increased risk,stopped offering the coverage. St. Cloud's growth increased fasterthan other towns in the region, and it quickly became a magnet forhealthcare. Tony already had been providing local physicians withpersonal and commercial coverage. “We were lucky to be early to thetable in terms of writing hospitals and clinic clients, and ourhard work has enabled us to keep meeting those clients'expectations,” Robert W. Mahowald, grandson of Tony Mahowald andcurrent partner, said.

What began as a one-man life insurance operation grew into ateam of experts specializing in four areas of risk management:commercial insurance, group benefits, personal insurance andfinancial services. The agency mission promises to “protectclients' people, property, prosperity and peace of mind,” andemployees work to create success from opportunity with that missionin mind. 

The Family Grows

Even though Mahowald Insurance Agency has enjoyed fourgenerations of Mahowald leadership, its partners are wary ofcalling it a “family business,” which can imply that other peoplework for a single family. Instead, the website provides thisdistinction: “We are a family business for all of ourfamilies.”

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The founding Mahowald father worked to support his family ofthree; today, the agency employs 30 and supports more than 90beneficiaries. Four generations of Mahowald leaders have shepherdedthe company's expansion. Partners include John Mahowald (managing),Robert W. Mahowald, Robert L. Mahowald, Greg Murray, Marty Mahowaldand Dave Mahowald. The agency represents MMIC Group, Travelers,Selective, CNA, Secura, Chubb, Minnesota's four health insurancecarriers and more. 

Mahowald produces an annual premium volume of more than $68million from 60 percent commercial lines, 35 percent group benefitsand 5 percent personal lines. The company uses TAM, PaperWise,SharePoint and iPads to increase efficiency and promotes paperlessoperation. 

Staff members introduce policy information invideos posted on the company's website, giving it a friendly,personal feel. When potential clients visit Mahowald's website,they can read staff bios, get in touch with team members for aspecific type of coverage or register for seminars about employeebenefits, claim reporting or driver safety. Although Mahowald has aFacebook page, LinkedIn page and a YouTube account, it does notaggressively use social media for marketing. Instead, most newbusiness results from referrals.

See the sidebar  ”The Risk ManagementProcess.”

Word of mouth may bring in prospective clients, but Mahowald hasa process in place to help them determine if the agency will be agood fit for them. This way, neither the company nor the potentialclient ends up wasting time. “The individuals and organizations whowant more than just an insurance product at a cheap price are ourtarget market,” Mahowald said.

Stand-Out Service

Producers at Mahowald are more than just salespeople. “Webelieve the insurance products we sell are just one part of therisk management and employee benefit plans we design for ourclients,” Mahowald said. The agency's objective is to manage itsclients' risks so well that clients will eventually need lessinsurance. At a time when consumers view insurance as a commoditywith little variance in product or service, this practice helpsMahowald stand out.

Mahowald also helps its clients succeed by partiallyself-insuring them. If clients perform poorly, the risk of directloss increases. If clients perform well, the profit is largelytheirs to keep. This strategy provides incentives for everyone frominsurance carriers to individual employees. Although the agency iscompensated less when clients are not fully insured, “this type ofprogram builds long-term relationships with clients that are moreimportant and more profitable in the long run,” Mahowald said.

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Mahowald is known as the only agency in central Minnesota withan expertise in healthcare professional liability. It has had arelationship with St. Cloud Hospital since 1970. Today, St. Cloudhas grown to become the flagship of CentraCare Health System,including multiple locations in the area. “In addition toCentraCare, we also handle the risk management and insuranceprograms for 29 other clinic entities and more than 700 physiciansin central Minnesota,” Mahowald said. Mahowald Insurance alsorepresents long-term care facilities such as state-wide Ecumen, anon-profit group, and Country Manor in Sartell, Minn.

Planning for Success

Change is inevitable, especially when an agency has been aroundsince 1930. “As we have grown, the operation also has becomeincreasingly complex,” Mahowald said. The agency is incrementallyadapting to more complex products and a larger staff. Because theagency acted wisely during the last hard market and avoidedpitfalls such as costly overhead expansion or expensiveacquisitions, it kept growing in the current softmarket. 

Besides foresight and steady, deliberate adaptation to change,Mahowald Insurance also submits its data to IIABA's Best Practicesto compare its progress with its peers. Mahowald Insurance wasincluded among the Best Practices agency list in 2011. In thefuture, Mahowald has a system in place that allows the nextgeneration of owner-operators to replace the current generation ona specific timeline and with plenty of discussion prior to thechangeover so as to avoid confusion and solve problems inadvance. 

Agency partners meet semi-annually forstrategic planning retreats to discuss growth options and companyneeds. During these meetings, the partners establish goals,including doubling in size every 10 years and developing aprofit-sharing plan. Since then, Mahowald has doubled in sizeapproximately every 7 years and posted 15 percent annually to theprofit-sharing plan. Organic growth remains apriority. 

“Lots of organizations say their people are their greatestasset; we believe in actually reinvesting in that asset,” Mahowaldsaid. Mahowald Insurance believes all of its employees should earnprofessional designations and attend career-enhancing training.Mahowald's advice for agency success includes this adage: “Yourbusiness' most valuable assets are the professionals who take careof your clients; invest in them and treat them well.” 

Committed to Community

Community involvement and service is important to MahowaldInsurance. The agency boasts strong histories with organizationssuch as Boys and Girls Club, Kids Against Hunger and CatholicCharities. A new program titled “Mahowald Cares” was launched thisyear. “An employee committee chooses a group community serviceproject for our agency every quarter. Employees receive 20 paidhours per year to volunteer with a non-profit of their choice,”Mahowald said. Employees have enjoyed making smoothies withchildren at a local women's shelter and working on a Habitat forHumanity site. 

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Mahowald executives present a monthly award called OTECHA to theemployee who holds closest to agency values. OTECHA is an acronymfor the company's chosen values: our clients' interests, trust,expertise, community, history and a brighter future. “Rather thansettle on values that spell out something clever, we decided tostick with our values and create our own word,” Mahowaldsaid. 

A brighter future is last on the agency's list of core values.It sets a goal for the company to avoid complacency and “embracethe challenge” each day brings. Employees are “constantly thinking,adapting and improving to better serve” their clients and makeMahowald the best agency it can be both today andtomorrow. 

It's hard to imagine four generations of bank tellers achievingthis level of success. It's a good thing Tony took the leap andquit his day job.