Seattle Broker Builds Business On Personal Relationships

Kibble & Prentice helps build Portland high-rise and rebuild business under a cracked Washington state Capitol dome on foundation of customized client solutions

With a diversified operation and a team of less than 200 employees, Kibble & Prentice aims to excel in an area the broker believes is at the heart of the insurance business building personal relationships.

“We are better than our larger competitors at personalizing the relationship side of the transaction,” said Mike Gano, president of the Seattle-based firm's property-casualty division.

Each individual client receives custom-tailored responses to its specific risk issues, he explained.

According to Mr. Gano, the personal solution for the p-c customer involves more than meeting the insurer and discussing the risk. “It is a combination of listening [to clients] and asking questions, knowing the marketplace, and having the relationships in place to get these things done.”

To illustrate the point, Mr. Gano described the firms work with a client that was building a high-rise project with residential space in the Portland area that was having trouble getting affordable coverage. While others were unable to help, Kibble & Prentice went out and “took the time to understand the project and the issues,” he said.

Understanding the issue meant creating a spreadsheet of the client's many diversified holdings, which ranged from commercial retail buildings to apartments to golf courses between 200 to 300 locations in total. The risks were spread among many insurers, one of which was a “B”-rated carrier.

“The placements were at a financial level we do not like to see,” Mr. Gano noted.

After examining the totality of the risks, looking at all the locations, premium allocations, property descriptions and claim's experience, Kibble & Prentice was able to “paint a picture” of the client's overall exposure to prospective carriers, and consolidated the book with two “A”-rated carriers.

“We were able to consolidate their insurance in a more cost-effective manner,” he said.

For the one high-rise project, the consolidation resulted in a program that was affordable enough to allow the client to build the insurance costs into the project and get the job completed.

“We are good at finding solutions and forming relationships that tell the story in a way that allows [such] a project to get completed,” he went on.

Building Three-Legged Relationships

But client relationships arent the only relationships that the broker looks to nurture.

“We spend a lot of time working on developing and maintaining our relationships with our carrier partners,” Mr. Gano said.

One carrier partner, Seattle-based Safeco, nominated Kibble & Prentice for this National Underwriter profile.

“We recognize them as a great partner,” said Safeco's Chuck Blondino, sales manager. In addition to giving high marks to the brokerage firm's professionals for being “very thorough in what they do,” he explained the longevity of a carrier-broker partnership that dates back to 1980.

“When I say they are a great partner, I am saying that they work with us that they value the relationships they have with our sales people, the face-to-face relationships they have going,” Mr. Blondino said.

Because of the strength of relationships that the broker has with insurance underwriters, he added, customers benefit from the “impact that Kibble & Prentice brings when they come to the table.”

To Mr. Gano, “working with carriers” like Safeco involves more than maintaining one-on-one relationships with insurer representatives. “We get our insurance company people together with our clients,” he said. “We don't see this happening a lot with our competitors,” he added.

“We bring underwriters out during the renewal process, or even if it is a new piece of business, to meet the client and talk about objectives,” he continued. “We see this as a three-legged relationship ourselves, the client and the carrier.”

“The majority of the time, when you can get the client and the carrier talking, and they have a personal relationship, all of a sudden the issue goes to the top of the to-do stack, and the underwriter has a more vested interest in seeing a more positive outcome.”

“That really helps you when you are discussing pricing and coverage. We really believe in that relationship side of the ledger,” he said.

More than commercial insurance

Kibble & Prentice is organized in two divisions the personal risk management-private client group and commercial services.

On the personal lines side, the broker offers high-net-worth customers, including those that have placed their commercial insurance business with the firm, a broad array of financial personal services.

“It gives us more flexibility and diversity in what we can offer the [commercial lines insurance] client,” he said. “We find most of our clients like the one-stop shopping. Executives like the fact we can protect their corporate assets as well as their personal assets with life insurance, long term care or homeowners insurance.”

The division of services, he said, makes it easier for customers to understand where to go and who to see when they have an issue or complaint that needs to be dealt with.

“When the client thinks of it in terms of private client and commercial risk management, it is easier for them to visualize that. If it is a personal issue, they can go here and talk to someone about their personal issues, and if it is their commercial business, they know who the people are to talk to on their commercial accounts.”

The structure “has served us really well. It has allowed us to have a very concise and believable message,” he said, contrasting this with the message of big brokers who might say they have 50,000 people worldwide. “Well, what does that mean? Can you deliver the service?” he asked. “That is the most important question to answer.”

Small, but nimble. Kibble & Prentice delivers experts and custom-tailored responses.

“You can have 10,000 employees, but if the client does not feel the benefit of having those people by being able to access the expertise because your model is cumbersome, then is having those 10,000 employees beneficial to the client?” Mr. Gano asked.

“What we say is we have 170 associates, and we have strategic partnerships with a number of [outside] specialists, including Globex [an international broker's association] for international accounts. If our client has an issue, we can custom tailor the response. We call it customer risk management,” Mr. Gano said.

“That is our philosophy. We can hand pick the individual or group that will best fit our client's needs.”

The big brokers, while offering a vast structure of experts, may not always be able to get clients in touch with the experts they need, he went on.

In 2001, for example, an earthquake measuring in magnitude of 6.8 hit Seattle causing widespread damage, including a crack in the state's Capitol dome. A historic building, home of “a longstanding private club,” suffered significant damage in the quake, explained Mr. Gano.

During the claims process, questions arose about how much of the damage resulted from the quake and how much was just a byproduct of the buildings age. There were also significant questions about business interruption losses. The club argued that it could not attract new members and was unable to hold outside functions in the building that would generate revenue. The flipside of the argument centered on how much of the business loss was from the downturn in the economy and the loss of interest in joining clubs.

“There was a huge discrepancy between client expectations and where the insurance company was in settling that claim,” he noted.

The club became a client of Kibble & Prentice after the earthquake. To help its new client, the firm brought in a forensic accountant who reconstructed the clubs records for the business interruption claim over a five-to-10-year period.

“We were able to lay out a scenario that was believable and accurate to the insurance company, then sat down as a team to facilitate the discussions, which ultimately lead to a satisfactory settlement all the parties could live with,” he said. “The client felt good about it; the company felt good about it; and we accomplished this by bringing in an outside specialist.”

Because it is smaller, Kibble & Prentice tends to understand the client's local needs better, he said. The relationships it has developed over the years and its current, growing success are proof of that, he added. One measure of this is the firm's retention rate that stands at 96 percent based on commission income, Mr. Gano said.

But even that figure does not fully illustrate the firm's success, he noted, explaining that, most often, when the broker loses a client, it's because the client is either acquired or merged, or simply goes out of business. “We don't lose a significant amount of business to our competitors, but it does happen on occasion,” he confessed.

“We compete extremely well in the middle- market range,” he added. “And most people who move business [to us] move it because they like the relationship approach” and because they like the fact “that we are creative in finding solutions for their problems.”

The personalization of accounts, Mr. Gano said, is especially important with the middle-market customer. The customer relies on the broker as its risk manager, because even though a middle-market firm may be a big account, it still isn't always large enough to afford a professional risk manager.

Building A Diversified Approach

By Mark E. Ruquet

The story of Kibble & Prentice began in 1972, when two life insurance agents, Ted Kibble and Arnie Prentice, decided to start their own agency, according to Mike Gano, president of property-casualty division of the Seattle-based firm.

Soon after the founding of the agency, the two men envisioned a distinctive financial services firm offering property-casualty insurance, employee benefits, retirement planning and investment consulting.

It was a dream, he said, that has become a reality.

Both men are still active in the firm today. Mr. Prentice is chairman and chief executive officer of the firm, and Mr. Kibble remains actively affiliated with the firm as one of its founders.

“These are two guys who were very successful in the life business and were very visionary,” said Mr. Gano. “They have built a diversified model that is very unique in this world.”

Their vision for the business has created an agency that is able to offer a strong variety of products to clients, said Mr. Gano. While the largest portion of Kibble & Prentices revenues come from property-casualty insurance, the firm is is not wholly dependent on that segment. In fact, unlike agencies showcased as part of National Underwriters Agency of the Year Award program over the last two years, where commercial p-c typically accounted for 85-100 percent of those agencies businesses, p-c accounts for 48 percent of the business at Kibble & Prentice. Employee benefits accounts for 37 percent, and the rest of financial services, such as retirement planning services, life products and investment consulting, account for the remaining 15 percent.

From a business perspective, this setup offers the firm a diverse source of income that keeps the firms income humming. “If the economy is in the tank, our [property-casualty insurance] fees [may be] down accordingly,” said Mr. Gano. “But [the diversity] gives us more of a non-cyclical look.”

Kibble & Prentice is among the largest privately held firms in the Seattle region, said Mr. Gano, and has grown 25 percent over last year. Today, it boasts more than $400 million in premium.

On the question of whether the broker would consider turning public at some point, he said it was a possibility somewhere down the road, “but it is not something we are thinking about.”

For the future, he said, the firms plans are to remain privately held and independent.

“We see ourselves as an acquirer, not the acquired,” he said.

In September 2003, to address the needs of health practitioners in Washington, the company announced it was expanding its medical liability practice. In January of this year, it acquired BGI Inc., a broker in the Northwest insurance industry. This was the fifth acquisition in two years for the firm.

Mr. Gano said the firms business plans call for continued growth at a rate of 15-20 percent and that the firm expects to double its size in the next five years, attracting good talent to the organization as it grows.

“We feel comfortable where we are,” said Mr. Gano. “We want to remain Kibble & Prentice. We feel so strongly about the quality of the working environment for our associates that we really want to perpetuate that.”

“We do not see any benefit to our clients or our associates to be a part of a larger firm. So our goal is to become larger ourselves and provide opportunities to people through growth in the company.”

Reproduced from National Underwriter Edition, June 18, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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Seattle Broker Builds Business On Personal Relationships

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