ISG International Triumphs In Tech Niche

Mr. Feldman said he took two key risks before his business became such a booming enterprise.

Deciding to start his own agency back in his rural hometowna somewhat sleepy backwater on the shore of Chesapeake Baywas risk number one. Mr. Feldman, who had great success during a career with a commercial insurance brokerage in Baltimore, said it would have been easier to stay in the big city.

"There are so many more opportunities to insure business there than in a rural area," he explained. However, he added, he wanted to raise his family in Cambridge and felt he could still pursue business from there because, "I could travel where I needed to travel."

A friendly attorney rented him a small space on a "pay what you can" basis, and he moved in, with his mother serving as staff for what was then Insurance Inc. Initially his primary clients were food processors, restaurants and television repair companies, but in 1981, four years after starting up, he bought an agency around the corner and put all the staff in that space.

Risky move number two, Mr. Feldman said, came when he decided to put his growing general business on the back burner and focus on the computer software technology niche. It was hard, he recalled, to expand beyond his familiar local business relationships to pursue a national market that required traveling around the country.

His interest in the field began in 1983 when Travelers offered to reimburse him for a $12,000 IBM personal computer if he met a prearranged business target. "I had to learn to program the thing. It took an enormous amount of time, but it was fascinating to me," he related.

At that point, Mr. Feldman said he saw that the technology business "was going to be better and better." The agency began by insuring computer consultants and expanded to include software development and other risks. Ignoring the doomsayers of Y2K, the company pursued the business and grew 400 percent in four years.

"While this sort of technology is more reminiscent of Silicon Valley than a town [like Cambridge, Md.] with the charms of Mayberry," he said, referring to TV's old favorite, "The Andy Griffith Show," he noted that "ISG's geographic location has never impeded our ability to sell and service accounts spanning the U.S."

ISG offers technology services companies a trademarked "CCBsure" insurance program, and this year it launched "Real-time Underwriting" on its Web site, letting customers rate, quote and bind coverage online.

Claiming never to make cold calls, the agency attributes its success to "an aggressive sales and marketing campaign" that includes over 200,000 pieces of direct mail going out each year, along with "a supporting run of national ad campaigns" to reach ISG's target markets.

Managing a national program has its challenges, ISG concedes. A staff of 15 insurance service representatives are accessible by phone, e-mail or the Web via ISG's "instant service chat feature." In addition, "while in-person visits aren't as frequent with clients out of state, they aren't unheard of, either," noted Mr. Feldman. "ISG employees have been known to make personal stops to visit their client's office while on vacation when traveling in the area."

In addition, "renewals are not simply put on auto-pilot" at ISG, he noted. "Each renewal is viewed as a re-sale and the agency's strategy reflects this."

Two years ago, ISG developed a "Pro-Active Retention Management System," which he described in his award essay as an "automated in-house system that allows scoring for each account based on the renewal criteria and time line to the expiration date, which gives management a 360-degree view of every active policy." The program, according to Mr. Feldman, "allows account managers to track the status of every policy leading up to the renewal date from 90 days out."

The agency has a strong focus on client service. Last year, before Hurricane Isabel smacked into Maryland, ISG created a special online reporting form for those claims and put up a special hotline for claims.

Charlie Brown, executive vice president and chief financial officer with Aetea Information Technology Inc. in Rockville, Md.a longtime ISG customerpraised the help he received when the firms office two blocks from New Yorks World Trade Center had a business interruption claim after the Sept. 11, 2001 attack. Mr. Feldman, he said, was "in there plugging away, working with insurance companies, contacting industry specialists so he could assist us in our pursuit of something reasonable."

The ISG agency, he said, is "very customer service oriented, and to some degree low key. You dont get a lot of high pressure to buy coverage you dont need."

That same service orientation led ISG to form a captive insurance operation based in the Cayman Islands. Mr. Feldman said the impetus for that enterprise came about when one of his major carriers, The Hartford, announced it would no longer provide ISG customers with workers compensation insurance in California.

To avoid any future fallout from carrier whims, ISG set about creating a captive for the technology industry. It opened in 2002 after five years of planning. The captive provides workers' comp, small property, general liability package policies and excess liability.

Raising the stakes and demonstrating the agency's confidence in the business, according to Mr. Feldman, "the technology niche has offered such favorable loss histories that ISG shares in clients' risksliterallyby assuming half the risk of every policy written through the captive market."

"While some may argue that writing a homogenous class of business is a gamble," he added, "ISG is confident in its knowledge of the IT industry and the supporting claims history."

About 80 percent of ISGs business is now focused on technology, but Mr. Feldman said he wants to change that. "Wed like to balance a little more," he noted, adding that the firm is hiring more producers for its general business unit.

The benefits of good computer systems are something that Mr. Feldman said he applies to his own business, and that help him draw good staff. "We make sure they have state-of-the-art technology on their desks. People love to know they have the ability to scan and have things to make work as easy as possible," he said.

Other perks include a 6 percent 401k match, fully-paid dental coverage and rewards for longevity. Employees who hit certain targets get a paid trip or vacation amounting to $1,500 after five years, $3,500 for 10 years and $5,000 for15 years.

The agency also provides an in-house training program it calls "ISG University" that gives new employees a rundown on all agency operations and offers them a prep course so they can pass the states agent licensing test.

Reproduced from National Underwriter Edition, October 7, 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.