SullivanCurtisMonroe CEO says growth, profit and fun equal success

Best Practices is a new Insurance Journal column that profiles how some of the nation’s top performing agencies run their operations. IJ’s Publisher Mark Wells recently interviewed William Curtis, managing partner and chief executive officer of SullivanCurtisMonroe based in Irvine, Calif.

To listen to the entire interview, or to subscribe to Wells’ regular “On the Street” podcasts through Apple iTunes visit: www.insurancejournal.com/podcasts.

Insurance Journal hopes that these Best Practices snapshots bring retail agencies everywhere a unique perspective on how to run an agency better.

Tell us about your firm.

William Curtis: We write approximately $30 million in revenue and have around 180 employees.

Are you only in California?

Curtis: Yes, that is correct. At one time, we had an office in Hawaii and another company in Seattle, but we sold off the Seattle office and shut down the Hawaii office. Now, we just have three offices in Southern California.

Do you have any plans to expand to other states?

Curtis: No, there’s still a huge market right here in Southern California. When we get 30 percent market penetration, we’ll consider going out of state.

Is there any one thing you can point to that accounts for your success?

Curtis: I think our philosophy has been that if you take care of the customer, the customer will take care of you. Not only by maintaining insurance with us, but also by referring us to other customers. Our growth has been based on referral.

Also, my philosophy has always been to hire the best people and pay more for them versus paying a little less. I think we all are so anxious to get good employees that we really don’t do a lot of research on their qualifications and skill sets by testing or conducting background checks. I think most insurance agents, ourselves included, don’t really have the true skills to see which employees will be good or bad, although we’re getting better at it.

Generally, when it doesn’t work, I’m a believer of saying, ‘This is just not working. Let’s help you find another position elsewhere where your skills could be better off and better utilized.’ If you hire someone and they don’t have the skill sets that you’re looking for, its best to cut off the relationship quickly. I don’t think you can change people’s personalities. In fact, I know you can’t.

Does SullivanCurtisMonroe have a profit sharing plan or an incentive program for your employees?

Curtis: Yes, we have our standard 401(k), but we also have a profit sharing as we reach certain bottom-line profit benchmarks. Vacation time is just as important. If you have a lot of money and you can’t get time off, it doesn’t do you much good.

Do you have employees working from home, or remotely?

Curtis: Yes, we do. Being able to work out of the house versus coming to the office and turning around and going back out is a benefit to employees. One of the biggest challenges we’re going to see in the years ahead is our transportation system is not able to keep up with the population, so we’ll be doing more of this.

Where do you go to recruit new employees? Do you bring in non-insurance and insurance industry people?

Curtis: It depends on the position. With respect to new positions, we do bring what we call clerical assistants in from different industries as long as they have some prior work experience. We have hired young producers that have no insurance background and teach them the insurance business in the sales area. But the hardest thing for insurance agents to do is to train. Nobody seems to have the time.

Insurers don’t have the schools that they used to have 15 years ago, where you could send people to get them trained.

Curtis: A lot of those programs were a year long and now people basically take the same training in just three weeks. Education is the biggest problem in our industry, both on the brokerage side as well as the company side. We have a tremendous lack of technical knowledge and in the next 10 to 15 years, as a lot of people retire, I think the gap is going to be greater.

Do you think that’s more prevalent on the carrier side than the underwriting side?

Curtis: I think it’s across the board. I think training or lack thereof in this industry for a number of years is going to show up. Today, if you go to an underwriter you’ll find they’ve never been familiarized with even how the ratings system works. They just rely on computers and don’t understand the theory behind it. If something comes out of the computer wrong, they can’t figure out why it’s right or wrong. We face the same problem on the agency side.

How many different markets does SullivanCurtisMonroe use?

Curtis: It depends on the type of business. Like most brokerage firms, we have a lot of markets, but it’s really about trying to match up the customer with the appropriate market for a long term relationship.

How many excess and surplus brokers does SullivanCurtisMonroe use?

Curtis: We probably have a half dozen that we use for different specialties. But there are also a lot of E&S brokers, MGAs or MGUs that we use for a particular program. In total, we probably have another 50 at least.

Do you specialize in any particular class of business?

Curtis: When we first started the firm, we had more of a specialty in construction, which led us into workers’ comp as a product line. That’s one of the few areas where you can really bring services in and where the client actually uses the policy. You can also make a substantial difference in the cost. We sort of specialized at the very beginning in using workers’ comp, but today we have several different divisions that specialize.

Are you finding that across the board, it’s a soft market or are there just a couple of hard spots in the market?

Curtis: I think it’s definitely softening. There are still your standard harder areas, but even in malpractice, it’s softening up. Overall, it’s definitely turned to a soft market. But you’re seeing some hardening, obviously, in your catastrophe areas.

What are you doing specifically about contingency agreements?

Curtis: We’ve gone through our due diligence and looked at them, and from what everyone tells us, including our associations, they are legal. We are still accepting contingents, but we have full disclosure in all our proposals.

Is there one last piece of information you’d like to share on the secret to running a successful insurance agency?

Curtis: Be slow to hire and be fast to fire. And ask yourself what are your primary three goals? One should be to grow. Every company has to grow because if you start coasting, you’re obviously going down hill. Two, you have to make a profit, because that provides security and money to invest for the future. And three, which most people don’t think about, is have fun along the way. We’ve even established a Fun Committee. Just like you plan for growth and operational profits, you should also plan activities to enjoy yourselves.

Topics California Agencies Profit Loss Market Training Development