It is sometimes said that listening is a lost art, and if thathad been the case at Cottingham & Butler, this insurancebrokerage firm would probably have ended up as just another MainStreet agency filling the basic coverage needs of residents andbusinesses in a small American town.

Instead, this Dubuque, Iowa-based firm has grown into a nationalbrokerage, with a diverse book of business ranging from traditionalrisk-transfer to some of the largest agency captive programs.

“Our growth came through client demand and being an astutelistener to what people are looking for,” said David Becker,president and chief operating officer of C&B.

The firm's ability to offer solutions beyond traditional marketsand have an impact well beyond its modest headquarters is partlywhy C&B was chosen as the “2007 Champion” in the sixth annual“National Underwriter Commercial Insurance Agency of the Year”award program.

Much of the credit for the emphasis on listening and partnershipgoes to John Butler, C&B's chairman and chief executiveofficer–who developed the theory that as a broker, you don't sitacross from your client but on the same side of the desk. “Listento the client,” he said. “Get on the same page and then go out andsolve their problems.”

A key to success at C&B is they won't work with just anyonewho walks through the door. Instead, they do business with clientswho “focus on the total cost of risk, not just insurance costs,”the agency noted in its award essay. “We rigorously screen ourprospects. We only work with those that want a true partner inmanaging their risks and where we can add value by impacting somecomponent of their risk program.”

C&B sticks to its risk management philosophy whether themarket is hard or soft. “We don't peddle policies and get inbidding wars,” the agency emphasized. “We help our clientsunderstand the insurance marketplace, not just shop it. When themarket is soft, we help them understand that, and potentiallyadjust their appetite for risk.”

The bottom line, according to C&B, is that “our clientsrecognize they must invest in their own fate and see their riskmanagement program over a long-term horizon. We strive to help themidentify where they should invest their limited resources–money,time and talent–to have the biggest impact on managing theirrisks.”

C&B opened for business in 1887 when Civil War veteran DixonCottingham opened his insurance agency in Iowa.

Several generations later, in the late 1970s, the agency stillnumbered about four employees. Yet, in recent years, C&B–basedin a town with a total population of 57,686, according to the U.S.Census Bureau–has grown to become one of America's top brokeragefirms.

It is an achievement Mr. Becker credits to the firm's employeesand the foresight of Mr. Butler to say C&B can be bigger andbetter by partnering with its clients.

A graduate of Wharton School of business, Mr. Butler implementedhis vision of sitting on the same side of the table as the client,Mr. Becker explained, to focus not just on transferring risk but onhow to lower the account's overall cost of risk, “then being ableto deliver on what we designed.”

This special-delivery approach took off in the 1990s with aclient who wanted to control his costs in an employee benefitadministration program through self-insurance. With loss-control ata premium, that one client prompted the creation of a safetymanagement program at C&B, which led the way in launching otheralternative-risk-transfer and risk management efforts.

“We thrive on serving clients who take on more risk–who arewilling to bet on themselves and make the investments necessary tomake that a winning bet,” C&B said in its award essay.

“We are strong believers in the alternative risk-transfermarket,” C&B noted–citing self-insurance, large-deductibleprograms and captives among the options it offers clients. Seventypercent of the firm's commercial p-c business has gone thealternative route, with over 120 clients participating inmember-owned group captives. Ninety percent of the agency's benefitbusiness chose self-funded models.

“The concept of managing the total cost of risk is not new andcertainly not unique,” C&B said in its essay. “What is uniqueat Cottingham & Butler is the degree to which we have adoptedit as part of our culture and the extent to which we have built thetools and capabilities to deliver it for our clients.”

C&B noted that it does not “simply draw up plans for ourclients to execute. We don't select vendors and then place theblame on the vendors if the program doesn't work. We put the plansinto action with our own experts. If the program fails, theaccountability is clear–we failed. Here is what we have built.”

In its wide-format, four-color brochure laying out itscapabilities and achievements, C&B noted that it offers“written service timelines–service expectations that our clientscan count on us to deliver.”

Even in a soft market–where better prices, terms and conditionsfor insurance may be easier to come by–C&B has stuck with itsfocus on risk management, which it believes gives the firm an edgeover its more traditional competitors by establishing longer-termrelationships and guaranteeing continued success and growth nomatter the state of the insurance market.

“If it comes down to just placing a policy, I don't think we areany better than the guy down the street,” Mr. Becker observed. “Butwhen it comes to complex problem-solving, that is where we canreally differentiate ourselves.”

C&B measures its success in many different ways. In dollars,its commercial lines premium volume has grown from more than $189million in 2004 to over $270 million in 2006. Its renewal rate isin the upper-90-percent bracket, and despite being in small-townAmerica, the firm does business in 47 states.

From that tiny Main Street America business in the 1970s,C&B now numbers over 330 employees–including 46 commerciallines producers, up from 32 in 2004–and 13 principals. Commercialp-c is its number one income generator at over 40 percent, withbenefits accounting for another 35-to-40 percent.

What was once a very generalized operation has developed into aseries of specialty divisions focusing on such areas astransportation, construction, manufacturing and distribution,retail and meat-packing–handled from the main office in Dubuque,two regional offices (in Chattanooga, Tenn., and Naperville, Ill.)and nine satellite locations from Florida to California.

Growth has come through the seizing of businessopportunities–but more importantly, according to C&B, from theaddition of talented people.

“We find individuals we like and add people,” said Mr. Becker,emphasizing that the company's attitude is to find those who fitthe C&B risk management culture, and then build business aroundthem.

That culture means providing a place for people to succeed whowant to be winners and have a desire to continue to learn. It is anenvironment that rewards merit.

However, the key element of C&B's culture, according to Mr.Becker, is that it is client-centric. Establishing long-termrelationships is the primary concern, earned by having a creativeand positive impact on the client's overall risk profile.

C&B's relatively modest home location necessitated a growthstrategy that looked beyond the small town and out over thenational horizon. Over 95 percent of the firm's revenues isgenerated from clients 50 miles outside of Dubuque.

Being so spread out, however, also places unique demands onkeeping in touch with both employees and clients. The solutioninvolves constant communication via newsletters, online meetingsand travel–something Mr. Becker concedes is an ongoing challengefor a growing firm.

One creative way of meeting that challenge is ownership in twopropeller-driven airplanes based in Dubuque. Some may see privateplanes as an extravagance for an independent agency, but Mr. Beckerpoints out it is cheaper than having to fly constantly to Chicagoand transfer to wherever they must ultimately go–while citing ahuge benefit in terms of efficiency that is hard to put a price tagon.

He pointed out there are no direct commuter flights to manyC&B clients, and driving to some accounts could take 10hours–compared to an hour by plane.

“If you want to be a big brokerage firm out of Dubuque, Iowa,then you have to have a way to see your clients,” he said.

C&B continues to innovate to maintain growth, including thelaunch of its “2011 Triathlon” last year. The five-year game plan,explained Mr. Becker, notes where the firm wants to be in 2011, andhow to measure the pace of reaching those targets. The firm'sultimate goal is fourfold–to be the top employer in Dubuque, to bethe top provider of risk solutions, to outperform the industry andto continue to grow.

To accomplish all this, C&B has created teams of employeesto review different aspects of the business. Their aim, Mr. Beckerexplained, is to focus on what is important in certain areas, andkeep the ball rolling toward accomplishing the agency's ultimategoals.

Involving everyone in thinking about the agency's future isanother core philosophy at C&B. “It makes this a better placeto work and a better business for all of us,” according to Mr.Becker.

C&B wants to continue its record of double-digit organicgrowth–2006 showed a 13 percent gain.

“I look at our future and believe we can enhance the storybecause I think our team is very committed to continuing to do theunbelievable and unexpected in pursuit of serving clients well,”said Mr. Becker. “This is a neat company and I think it has areally bright future.”