In 2009, Bridges Group agency owner Trent Richmond joined Combined Agents of America LLC (CAA), to access new markets and springboard his agency to the next revenue category. After healthy organic growth in the early part of the decade, Richmond's agency had flatlined for a few years at the $7 million premium mark.
Competing against larger agencies, big brokers and the Internet, he strategically joined the CAA agency partnership to raise his competitive edge while retaining the independence and cultural integrity of his family business.
For this Norton, Kan.-based agency, CAA membership meant geographically spreading the risk of weather-related loss, such as wind and hail, along with the ability to offer a diversification of risk management tools. CAA provided Richmond’s agency customers more products, and the economies of scale that meant deeper relationship with carriers, vendors, and VIP response of claims, quotes and even training for his staff. And it worked. Bridges exceeded its organic growth goals and doubled its agency’s premium and revenue numbers in six years.
Sharing innovation in a quickly changing industry
This a classic success story for a small-town business owner who originally bought the agency with a total of three employees and some $1.5 million in premiums in 1999, and no experience in the business. The intellectual capital, shared culture and growth-mindset of the 50-some independent agency members helped spur Richmond to success.
“I thought I was joining CAA for the reason most independent agents band together to join agency partnerships — it’s all about markets. How do I keep all these companies happy and how do I get all the contracts to compete against larger brokers? Looking back, it became more about the relationships, access to intellect and the opportunities it provided my agency and family. CAA is a true partnership. We can’t compete for employees or customers. It’s a fair-playing field when sharing innovation in a quickly changing industry is encouraged. It’s a lot more value that you can put on a spreadsheet, including all the things you can’t plan for,” Richmond says.
Trent Richmond with his family (Photo: Trent Richmond)
Daughter's medical needs mean move from Kansas to Texas
Despite long-term plans to build his now thriving business in Kansas, Richmond was advised he needed to move his family to south Texas for his daughter’s medical needs. As the owner of a best-practice agency for more than a decade, big brokers regularly offered to buy Bridges Group. For Richmond, that wasn’t a viable option.
“Culturally, I didn’t feel like my agency would fit with a national broker or an out-of-state buyer. I didn’t have a peace about selling to someone that does not understand rural America, and my hometown’s local culture. My agency is like family, you don’t just trust family to anyone,” Richmond says.
CAA partnership results in win-win
CAA’s partnership offered another way when fellow CAA member Alan Schlesener, partner at Keller Leopold Insurance, proposed to acquire Bridges Group. Based on their CAA working relationship, it was a win-win: Richmond trusted that his employees and customers would be well taken care of, and Schlesener strategically valued the talent of the existing Bridges employees, not just the book of business Bridges Group brought to the table.
“It removed a lot of anxiety than if I’d had to do it another way, and brought a unique opportunity. It was culturally and geographically a match and our people fit together. So much so that Keller Leopold allowed myself and two of my partners the option to buy into an equity position with them,” says Trent.
Richmond still member of CAA
Today, Richmond is still a part of CAA as a partner of Keller Leopold Insurance, a CAA member agency. The Dodge City, Kan.-based independent agency estimates it will write more than $45 million in premiums by the end of 2015. And serendipitously, Richmond originally recruited Schlesener to join CAA in 2013.
Between 2009 to 2013, CAA added eight agencies in Kansas. The CAA partnership is looking to expand in Nebraska, and continues to look for growth in other states as well.
Courtney Holder is the creative director of Austin-based Psyche Ink where she crafts compelling stories through words + images for individuals and companies like Combined Agents of America.