The National Alliance serves up a rich blend of education, networking, and fun

According to Webster's, "mega" means "great; large; greatly surpassing others of its kind." That's an apt description of the 2004 MEGAbration held in Dallas in October by The National Alliance for Insurance Education & Research. The National Alliance, which offers the Certified Insurance Counselor (CIC), Certified Risk Manager (CRM), and Certified Insurance Service Representative (CISR) educational programs, also used the occasion to celebrate its 35th anniversary, complete with cake and champagne.

More than 1,200 insurance professionals gathered in Dallas for five days of continuing and advanced education on a host of topics, ranging from claims mitigation and surviving the hard market to risk management information systems and product recall crisis management. Also addressed were Cyberspace issues and solutions, advanced workers compensation techniques, contract bonds, construction defect liability, and a number of life, health, and retirement planning subjects.

A key feature of the agenda was an Academy Forum at which a panel of five of The National Alliance's "25 Most Innovative Agents" (see the October 2004 issue of Rough Notes, page 68) shared their thoughts and experiences. Participating in the panel were Scott Addis, CPCU, The Addis Group, King of Prussia, Pennsylvania; William Cadenhead, CIC, CWCA, Cadenhead Shreffler Insurance Agency, Bedford, Texas; James Reid, CIC, Higginbotham & Associates, Inc., Fort Worth, Texas; William Rothwell, CPCU, AAI, Universal Insurance Services, Grand Rapids, Michigan; and Thomas Williams, InterWest Insurance Services, Sacramento, California. The panel was hosted by Bruce McCreadie, CIC, AAI, CPIA, McCreadie & Associates, Inc., Lithia, Florida.

"I'm not an insurance person"

For The Addis Group, the focus is squarely on risk management rather than insurance, said Scott Addis, who won Most Innovative Agent honors for creating a risk management audit process for his agency's commercial clients. The process has boosted the agency's hit ratio on new business to 90% and is credited with producing a 99% retention ratio. "I'm not an insurance person," Addis tells clients and prospects; "I'm a risk manager for growth-oriented mid-market businesses." At the Addis Group, he said, "our goal is to become a risk manager for our clients, to offer more than price, product, and the insurance mechanism. We're not interested in anyone who just wants a quote on insurance."

Risk management, Addis said, involves identifying exposures, devising methods to address those exposures, implementation, and monitoring. "Ninety percent of the time, insurance isn't the solution," he remarked. The truth of this assertion, he says, was brought home to him when he visited an insured's manufacturing facility right after a horrific accident involving an employee. "A woman lost both of her arms in a punch press," he said. "I realized there was nothing insurance could do to replace her arms. It's only one risk management method."

To provide workable risk management solutions, Addis said, "We need to understand the business and its culture, and seek input on the key concerns of management and employees. Then we present our recommendations to management. We strive first to mitigate risk via non-insurance transfers, then we use insurance."

When meeting with a prospect, Addis said, his agency follows three guidelines. "First, we make it clear that we want to talk with the CEO, the decision maker," he said. "second, we ask about the prospect's relationship with his or her current broker. If it's good, we don't want to disturb the relationship." If the prospect is open to working with a new broker: "We explain our process. We want the prospect to be enthusiastic about our process." The third guideline: "The prospect must sign our action plan, or we don't go forward," Addis said. In what might be seen as a departure from customary practice, Addis said, "We don't require a broker of record letter; we enter into a six-month trial relationship with a new client."

It's often said that insurance is a "people" business, and the agent panelists couldn't have agreed more. Addis described the relationship among agency, company, and client as a triangle. "In our agency, a relationship is a partnership, and the insured is a client of both us and the company," he said. Whether the market is hard or soft, The Addis Group believes in the "care and feeding" of underwriters. "We have a carrier appreciation day four times a year, and we also hold a casino night for carrier representatives," he said. "Our employees, clients, communities, and carriers represent 'acres of diamonds.' Each day we ask ourselves: What are we doing to polish our diamonds?"

Meet the "techno-geek"

Earning Most Innovative Agent recognition for his productive use of technology was Bill Cadenhead of Cadenhead Shreffler Insurance Agency. An early adopter of technology, Cadenhead is credited with creating the term SEMCI (single-entry, multi-company interface). Using a program he developed himself, he audits all of his clients' experience modifiers. When agency automation was in its infancy, "I couldn't afford Aetna's Gemini system," Cadenhead said. "For me, the key question about technology was: Could it help me with my business needs as a one-man shop?" As an automation pioneer, "I'm often called a techno-geek," he commented with a chuckle, "but I actually know very little." Clearly Cadenhead is being modest to a fault; he's played a leading role in the evolution of agency-company automation. "My aim is to apply technology to business needs," he said. "As Roger Sitkins says, Tm the president of ME, Inc.' It's up me as the owner to apply my knowledge to my agency operation."

ESOP and more

Although he enrolled as a premed student at the University of Texas, James "Rusty" Reid ended up following in his father's and grandfather's footsteps to become the owner of a successful independent agency. Today Reid is president and chief executive officer of Higginbotham & Associates, Inc., which is based in Fort Worth and has a total of seven offices in Texas. Since Reid joined the agency in 1986, it's grown from a 12-person shop to an organization with 180 employees and premium volume of some $300 million.

Most Innovative Agent honors went to Reid for an array of accomplishments. First, he created a management structure around an ESOP, both to ensure perpetuation of the agency and to forge a strong bond with employees. "With the ESOP, our employees can share in the vision and the success of our agency," Reid said. "It's a common thread connecting the owner and the employees. We have a shared stake in providing great customer service." At Higginbotham & Associates, he said, "We want to surround the client with buckets of expertise." He adds: "To build credibility with our carriers, we make it a point to prepare quality submissions and provide sophisticated loss analyses."

Among his other accomplishments, Reid helped develop a Web site, www.agentsecure.com, which matches rural and small agents with standard carriers for small and mid-sized accounts. He also created a credit card program for new health insurance enrollees.

Specialty niches

Like other recipients of Most Innovative Agent recognition, Bill Rothwell has a number of achievements to his credit. Rothwell is president and managing partner of Universal Insurance Services, Grand Rapids, Michigan. A decade ago, Rothwell began to diversify his agency's business, which was heavily weighted toward commercial lines. The agency created three new business units: a call and service center; a marine division that includes an agency-owned captive; and a life, health, and benefits division.

A sudden brush with death, Rothwell said, inspired him to take a fresh look at his life and his approach to agency management. In December of 1999 he suffered a massive heart attack, preceded by what he describes as "an impending sense of doom"-a feeling common among people who are about to experience a heart attack. "At the hospital, I flatlined," Rothwell said. "It happened two more times, and I had to be revived five times." During eight weeks out of the office, "I realized I had to trust the people around me, and let them make mistakes," he remarked. "This experience allowed me to build a great organization with a culture of both leadership and Tollowership.'"

Cross-selling is a key focus at Universal Insurance. A member of the audience asked if cross-selling really increases retention, and Rothwell responded emphatically: "Absolutely! Most clients care more about their personal lines coverages and premiums than they do about their commercial insurance," he said. "We have to take care of our clients' personal lines needs."