Insurance Journal Publisher Mark Wells interviewed Dave Hartoch, chairman of the board of the Swett& Crawford Group, shortly after the announcement that the company had been sold by Aon Corp. to an investment group in late September. From the company’s headquarters in Woodland Hills, Ca., Hartoch discusses the “new” independent Swett, and its plans for future growth.
For the complete interview, visit: https://www.insurancejournal.com/broadcasts/ or see the Nov. 7, 2005 issue of Insurance Journal.
Insurance Journal: Give our viewers a little background about Swett & Crawford.
Hartoch: Swett & Crawford is the oldest wholesale firm in the country, over 90 years old. We have 37 offices in 30 states, about 800 employees. From the management down to the support staff we’re all extremely excited about being an independent company. As most everybody knows Aon had announced back in February that they were going to explore options to sell us. A purchase agreement has been signed by Hicks News out of Dallas. We now going through due diligence and a few other things and we expect to close within the next 30 days.
IJ: Let’s talk about that independence. Swett originally started as an independent wholesale brokerage firm and more recently was owned by Aon, a large retail firm and now you are going back to being independent again. How does that affect your business?
Hartoch: I think it affects it in an extremely positive way. Aon was our biggest client and will remain a huge client, but what independence allows us to do is a lot more business with Aon competitors. The larger alphabet houses were reluctant to do business with a wholesaler owned by one of their largest competitors. It also allows us to attract a different kind of talent; talented individual producers who may have books of independent business and never wanted to go to work for a wholesaler that was owned by a retailer for obvious reasons.
IJ: What would you say separates you from your competitors?
Hartoch: We are very diverse. What differentiates us from our competitors is we have five major lines of business: property, casualty, professional liability, transportation and energy. Most of our competitors specialize in two or three. We also do quite a bit of workers’ comp.
IJ: How many markets do you represent?
Hartoch: We represent 300 markets. Fifty percent of our business is admitted and the other 50 percent is nonadmitted.
IJ: What are your plans for the future now that you’re independent? Do you see any growth?
Hartoch: Absolutely. We are going to be much more aggressive than we have been in the past. With our prior ownership we were under a hiring freeze and we had a problem replacing people. We are going to be much more aggressive in hiring people and we are going to be much more aggressive in going out and acquiring business.
IJ: Do you think there is room in the market? In order for you to grow it is going to take a lot more premium.
Hartoch: I think thee is a lot of opportunity for us. There are places that we’d like to be that we are not now, geographically. There are places in the Southeast, maybe Tennessee or Las Vegas. There are also opportunities for us to expand where we have smaller offices.
IJ: Tell us how your new independence will affect your customers the retail agents.
Hartoch: I think independence is important, but I don’t think it is the most important thing. The most important thing is service, value, being innovative and expertise. I think that is what we offer and will continue to offer. What we are going to do with the company is we are going to posture the company a little differently in that we are going to divide it by product line. We are going to have product leaders in the five disciplines that I mentioned before including underwriting. I think that is another thing that differentiates us from our competitors; the vast amount of underwriting and the vast amount of exclusive underwriting units we have that our competitors don’t.
IJ: What happens now? There seem to be fewer but larger wholesaler brokerage firms. Are there new firms starting up?
Hartoch: There’s always new firms starting up. Individuals that are really good brokers go out on their own and get backing. It’s pretty easy to get backing today. There’s a lot of money around looking for people to start wholesale operations. Yes there are a lot of big wholesalers, but the smaller ones will come and it won’t be too long before some of those are pretty big.
IJ: Can you tell us a little about the deal? What was the price paid for Swett and what are the terms and conditions?
Hartoch: I can’t tell you the price or terms and conditions because the deal is not closed yet, but I can tell you a good deal is when both parties are pleased and in this instance I think both parties are happy.