Disasters Put Spotlight On Importance Of People

The best-run businesses have a few core beliefs, and one of them is the recognition that people are the key to their success. That is especially true in the insurance business because, despite all the criticism that gets heaped upon it–sometimes deservedly–this is an industry built on trust. Clients trust that in times of crisis, their agents and brokers will be there to help.

It should not merely be a sales pitch when executives claim: "This is a people business." Beyond hard-nosed business decisions based on price and coverage, retention rates have much to do with the people selling and servicing clients.

Brokers don't sign their top producers to non-compete agreements because they are afraid they will take some internal secrets away from the agency. A client identifies their insurance relationship with their individual producer. That is why New York-based Integro is so keen on hiring so many veterans. Not only do they bring experience, they bring relationships with them.

Trust is an important commodity. It is no accident that the Independent Insurance Agents & Brokers of America's branding initiative is called "Trusted Choice."

The value of the people is spotlighted during disasters like the recent wave of hurricanes. After all, producers and their staff situated at disaster scenes were often victims, along with their clients.

Even with all the talk at the recent annual meeting of the Council of Insurance Agents & Brokers about the state of the market and compensation disclosure, it was interesting to hear the many post-Katrina human interest stories being swapped.

Willis, for one, had more than claims to deal with after Katrina, recalled Mario Vitale, the brokerage's chief executive officer of North America. The firm had offices in New Orleans, and local people as staff. Everything had to be moved, he said. Employees were evacuated to Houston, and in the face of Rita possibly hitting Texas, just the prospect sent shivers among those who feared dealing with another hurricane. They were relocated to Austin.

Luckily, everyone was safe, but Willis took on the responsibility of relocating employees twice. "We treat everyone as family," he said. "We help as much as we can." For all that these employees were going through, he added, they were still there for their customers, helping as best they could despite their own devastation.

"They have done a great job taking care of their clients," he said, noting the New Orleans office "will be up and running before [employee] homes are up and running."

There was no worry about offices in the path of Hurricane Katrina at Hilb, Rogal & Hobbs, said Mel Vaughan, the firm's CEO, and Mike Crowley, the firm's president. However, if Rita had hit the major port city of Galveston and run into Houston, it would have been a major issue because of the number of clients and an office there. The relief they felt that the storm had spared those cities was obvious.

The need to protect employees was critical, they noted, because much of their success comes from the talent within.

They were very keen on the idea that their organization needs to be a place where people can grow and become more successful. The executives were equally focused on the fact that they wanted to create a "fun" place that "motivates" people to write good business and cultivate clients. "Without good people, you are not going to write good business," Mr. Vaughan noted.

"This is a good business to be in," added Mr. Crowley, speaking about the insurance brokerage business in general. "We are looking for young people and seeking the best and brightest talent out there."

One place where Mr. Vaughan said he is finding good talent is from the pool of former military officers. When asked why, he had one word–"discipline." Mr. Crowley such an attribute is crucial because "we need to get the job done for our clients."

HRH is in the process of developing a brand, noted Mr. Vaughan, but his emphasis had less to do with marketing than "how we think of us and how our clients think of us." The words they used to describe their brand were integrity and respect.

There are four categories of individuals HRH needs to worry about, noted Mr. Crowley: the client, its people, vendors and the competition. If you run an organization that earns the respect of all four, he said, "you have done your job."

What seemed to make Mr. Vaughan the proudest, however, was not the business success, but the pride that people at HRH have in the firm as a community. Outside of the business, he talked about how the people within the organization banded together to raise thousands of dollars for hurricane relief, and their participation in building homes for "Habitat for Humanity." There are many stories like it around the industry.

Mr. Vaughan summed up the one primary mission for his organization and his people: "We want to make this the place to be." Seems like a goal every agency principal would want to copy. We just hope it doesn't take a disaster to make principals realize the value of their people.

Mark E. Ruquet is NU's agent/broker editor. You may reach him at mruquet@nuco.com.

"Beyond hard-nosed business decisions based on price and coverage, retention rates have much to do with the people selling and servicing clients."

Mark E. Ruquet