To identify your business as merely an “insurance agency” these days could prove fatal as clients seek far more expertise than just policy placement–demanding risk management support to limit exposures, the ability to tap alternative markets when necessary, and an aggressive claims advocate if losses occur. That full-service philosophy helped J. Smith Lanier & Company become the “2008 Champion” in the National Underwriter Commercial Insurance Agency of the Year award program.

“We put our client's needs and interests at the forefront of every decision we make,” the agency said in its award essay, which means going beyond just offering price quotes on policies.

“Our risk management consultative approach often involves alternatives to traditional insurance coverage, depending on what solution truly serves the best interest of our client,” the agency added, emphasizing that the most effective way to serve accounts is by forming a “true risk management partnership,” focused on loss prevention.

“We deliver a consistent product to our client,” explained Gary Ivey, president and chief operating officer at the West Point, Ga.-based agency. “Not every client values the same thing, so we're looking to be matched up with clients who are looking for value in total, not just price. If you live by price, the swings in the market are going to take you out of a lot of businesses because there isn't necessarily any bottom to the pricing.”

He added that “if the only thing that [a producer is] providing that client is price, you won't have extremely high retention rates, and we have extremely high retention rates,” noted Mr. Ivey.

The bottom line, he said, is to reach the lowest cost of risk for the client, which means setting up a multidimensional program addressing risk management needs.

That requires the agency to have both risk management experts on the front end of the program to help identify exposures as well as the expertise and systems on the back end to keep those potential hot spots in check with sound loss control.

But risk management doesn't come cheap, and that means reinvesting in the agency's service capabilities beyond mere insurance placement. “Our general sales philosophy is that we want to be the best supplier to our client,” besides just buying insurance, said Mr. Ivey. “We out-service our competitors.”

To underline the importance of such services and steer clients away from focusing only on the cost of insurance, the firm educates customers about their ultimate cost of risk and what steps need to be taken to control their exposures.

The agency also created a pre-loss risk control and advocacy practice. If a loss occurs despite whatever risk management steps were taken, the agency then steps in to help facilitate the adjuster process and obtain the maximum recovery for the client, so they know they have been treated properly by their carriers.

Lanier fulfills its full-service mission by bringing in people who are specialists in certain fields, who can intelligently give advice in their niche, setting the agency apart from one that sells primarily on the price of insurance, leaving clients–and the agency–at the mercy of market swings.

“As [clients] become more educated, they expect more from the process than someone who just takes your money and sends you an insurance policy,” said Mr. Ivey.

Such value-added services–including assimilating, managing and monitoring data to determine the client's ultimate cost of risk–are provided without charge, he added.

The investment in becoming a full-service, risk management-oriented firm has paid off, as the agency boasts a 44 percent increase in commercial lines premium volume over the last three years–despite a softening market over much of that period–as well as a 29 percent increase in total income over that same span of time.

People-power is critical, according to Lanier, which has increased its number of employees by 140 to a total of 588 over the past three years, while the number of principals has risen by 46 to a total of 117 over that same period.

When asked what it is about J. Smith Lanier that differentiates it from other agencies, Mr. Ivey said the firm “brings a certain economic value to the client” through programs that “yield the lowest cost of risk, service consistency and continuity of product.” He defined the economic value offered to clients as:

o Pure money savings–where one agency's program has a better price than its competitor, and risks are avoided or mitigated.

o Time savings–where the client's employees spend less time dealing with insurance and risk management issues.

o Frictional savings–meaning to smooth out the business process, whether by helping to complete a claim or deliver the necessary paperwork.

Multifaceted service is the distinguishing characteristic offered by the agency, according to Mr. Ivey–whether that means responding to the need for certificates of insurance, determining the insurance requirements of a small client, the risk retention of a midsize account, or developing a captive for a large risk group.

“Our main goal is to positively impact a company's bottom line by achieving sustainable reductions in their total cost of risk,” J. Smith Lanier noted in its essay.

A major part of the credit for the company's success goes to its employees, Mr. Ivey noted. That only underscores the importance of providing the type of atmosphere where people enjoy coming to work. “You are only as good as the people in your organization, no matter what anyone says,” he said. “It's all about the people.”

Locally, the agency has been cited by a number of business publications and associations as one of the best places to work in the region.

“We have found that if you have happy employees, you have happy customers,” Mr. Ivey observed.

The emphasis on employee involvement was taken a step further with the institution of an employee stock ownership plan. The agency feels that owners treat their business differently than do pure-salary employees, noted Mr. Ivey, because “owners have a tendency to give more attention to detail, costs and delivery of service.”

There was some resistance when the plan was first instituted in 1992, mainly because “no one understood what it meant to them,” he said. But since then, the value of the ESOP has grown, and so has the involvement of employees to increase J. Smith Lanier's efficiency.

With an ESOP, “when somebody wins, everybody wins,” Mr. Ivey pointed out. “It helps your organization get this overall focus that if your agency wins in total, then everyone wins. If an individual in the organization wins and moves the organization forward, then everyone shares in it.”

An ESOP also means listening closely to employee-owners, according to Mr. Ivey, who said that while decisions are not necessarily made on a consensus basis, the concerns and advice of staff are assessed and taken into consideration.

The agency's consistent growth and ownership mentality also helps recruit new talent, he noted, creating opportunities for people within the organization to move up. There is little turnover at the firm, he said, explaining it is the hope that when someone joins J. Smith Lanier, they come there to make a career.

What is important at J. Smith Lanier is building loyalty among employees for the business, as well as among clients–one goal is linked to the other, Mr. Ivey noted.

“If you never have loyalty with employees, you will never have loyalty with clients,” he explained, noting that firms that are constantly downsizing or rearranging teams cannot expect fidelity. “It is very hard to have loyalty of the client, because the client identifies so much with the team that is on the ground.”

Lanier also grows its business by delivering additional products and services the client needs outside of property-casualty insurance, to include health insurance and employee benefit programs, risk management services and claims management.

To facilitate growth, J. Smith Lanier has made acquisitions–seven in the past three years, with plans for more down the road. But that is only a matter of taking advantage of opportunities, explained Mr. Ivey, who said it is equally important that such acquisitions fit the firm's culture.

“If we see an opportunity to grow in the Southeast or Southwest, we will take advantage of it if it adds to our organization and is accretive to earnings,” he said.

However, “organic [growth] is what we live and die by,” Mr. Ivey emphasized.

“If we do not make another acquisition in the next five years, that would be fine by us,” he said, explaining that internal growth is a key benchmark of success because it means the market is buying into the agency's philosophy and capabilities.

The agency also emphasizes the need to stay on top of individual producers throughout the year, and to do whatever it takes to help them succeed.

“I will see every single producer we have twice a year, because that is your stream of revenue,” Mr. Ivey said. “Every one of those producers, added together as a small stream, becomes a river of revenue for this organization. And we are concerned about every one of them.”

For example, he said, “we are concerned about this market and how it concerns every one of them. We're concerned if their book of business is declining–how that impacts their family, because their income would be changing. I cannot overemphasize our focus on organic growth.”

Special Reports /

Full-Service, Risk Management-Focused Culture Keeps Lanier Ahead Of The Game

Related Stories

Recommended For You