16th ANNUAL ROUGH NOTES: MARKETING AGENCY OF THE YEAR CANDIDATES

One of the agencies featured in a Rough Notes cover story during 2004 will be chosen Marketing Agency of the Year. The agency principals of the winning firm will be presented with the award at a dinner held in their honor in early 2005.

The winner will be selected by votes of the previous years' Rough Notes cover agents (from the years 1989-2003). Ballots have been mailed to the owners of these 163 firms.

The nominees for this year's award are described on the following pages. The winning agency will be announced in February, and a full story on the winner will appear in the April issue of Rough Notes.

February

Brower Insurance Agency, LLC

Dayton, Ohio

Account executives on the cover

This well-diversified commercial lines agency produces $14.3 million in revenues with 90 employees-70 in Dayton and 20 in Cincinnati. It has a high concentration of service people to producers and utilizes a knowledge-based sales approach, bolstered by the professional background of its employees. For example, the agency has an in-house loss control specialist, and its bond department includes three CPAs.

Brower has been around since the '30s, but its evolution in recent years has been dramatic, particularly in employee benefits, where its eight benefits producers account for 25% of the firm's revenues. The benefits practice includes a 401(k) specialist and a human resources consultant whose services are offered to clients on a fee basis. Ownership is distributed among 14 principals, none of whom are related. Producers are motivated by the opportunity to obtain an ownership interest. Non-producers are eligible for a bonus plan tied to agency growth and profitability.

Agency principal John Watson says that as the agency has grown, it has been devoting increased attention to internal management to assure that service standards continue to be high and consistent throughout the organization. This has led the firm to several recent hirings including a chief operating officer, a training compliance coordinator, an HR professional, and a customer service manager. Among the agency specialties are construction, tool and die manufacturing, health care, trucking, municipalities and school districts.

"We recognized that our 4,000 commercial property/casualty clients represented built-in relationships for selling employee benefits."

-David Griffin

Principal

March

Starkweather & Shepley

Providence, Rhode Island

On the cover: Trustees of the trust that owns Starkweather & Shepley (from left): Fred R. Tripp, President; William P. McGillivray, CPA, Executive Vice President and Treasurer; and Natale P. Calamis, Executive Vice President

Established in 1879, Starkweather & Shepley celebrated its 125th anniversary last year with completion of the largest acquisition in its history. The agency purchased the MVI Insurance Group of Companies on Martha's Vineyard, increasing its presence in the Massachusetts marketplace and boosting revenues to more than $25 million. The acquisition continued a growth plan started in the 1980s that added strategic acquisitions to supplement internal growth. Fred Tripp, president, notes that "the acquisition combined with strong growth served to make 2004 our best year ever."

The agency features a unique perpetuation plan that was put into place by stockholders in 1935 to alleviate the costs of ownership succession. Under the plan, ownership of the agency resides with a trust, with the trustees responsible for maintaining the goal of the trust-to run the agency for the benefit of the employees.

The agency is sales driven, with the commercial department set up in four sales teams. It is able to offer both traditional insurance and alternative market solutions to its clients. Three of the teams do service and retention work and the fourth team pursues new business. The teams are comprised of marketing people, account managers and producers. The approach is aggressive and proactive with new business sales meetings every Friday and a general sales meeting every other Monday. The agency is an Assurex Global Partner.

"The net effect of the (trust) structure is that we have not had to fund any perpetuation plan since 1935."

-Bill McGillivray

Executive Vice President and Treasurer

April

Langan-Insurance, Benefits & Financial Services

Louisville, Kentucky

William J. Roby, Sr., CLU, ChFC, President/CEO and Thomas J. Barrett, Executive Vice President on the cover

When William J. Roby, Sr., and Thomas Barrett acquired this agency in 1988 it was a 75-year-old property/casualty generalist producing about $600,000 in revenues with 10 employees. Today, the agency has 40 employees and $5.5 million in revenues. Half its revenue now comes from employee benefits. Roby and Barrett divided the firm's production effort into specialties, instituted a cross-selling program and established "a team approach to sales in all disciplines," says Eoby. "When a producer is out of the office, his or her client still can talk to a member of the team and get answers...."

Langan also established partnership relationships with several outside service providers, including wellness programs and compensation specialists. These specialists then work with Langan clients, sometimes at discounted rates. A long-term growth goal, established three years ago, is to double revenue within five years. All employees participate in monitoring the progress toward this goal, and when Langan reached the halfway point toward meeting the goal, it celebrated by taking all employees on a three-day weekend retreat. If the five-year goal is met, employees will be treated to a cruise or other bigger trip. The agency has been recognized as a Best Practices Agency by the IIABA for each of the last four years and by the local business magazine as one of the fastest growing businesses in Louisville.

"We try not to quote. Nearly alt of our business comes from referrals. In fact, 80% of our new business is broker of record."

-William J. Roby, Sr.

President and CEO

May

The Rutherfoord Companies

Roanoke, Virginia

Thomas R. Brown, President; Thomas D. Rutherfoord, Jr., Chairman and CEO; and George (Shad) Steadman, Executive Vice President (left to right) on the cover

When an agency's owners include members of a family whose forebears founded the firm more than 80 years ago, there are proud traditions to uphold. But tradition can take you only so far. Thomas J. Rutherfoord, Jr., and Thomas R. Brown were forced to aggressively redefine their firm's mission in the early '80s after a confluence of events jolted the agency's traditional business model. The agency lost some significant long-standing accounts connected to the railroad industry when these businesses formed their own captive. At the same time the soft market was squeezing revenues, and high interest rates were hurting its construction accounts. Rutherfoord hired a risk control specialist and established a claims and risk control company. Today that company includes 17 claims people and eight risk control specialists. Among its projects is managing a Bermuda-based captive, which Rutherfoord established six years ago.

Agency revenues have grown from $7.3 million in 1994 to $31.3 million in 2003. In those same 10 years the share price of the agency's ESOP has grown from $355.60 to $1,426.08. Rutherfoord has 225 employees and maintains four offices in Virginia, two in North Carolina, and one each in Atlanta and Philadelphia. Among its creative ventures is providing voluntary benefits for the United Nations in a joint venture with a French insurance agency. Rutherfoord rewards producers and support people with annual agency-paid trips for the employees and their families.

"It is our ability to provide quality risk control and claims service that has really set us apart and allowed us to compete with the national brokers and win."

-Shad Steadman

Executive Vice President

June

Hoffman Brown Company

Sherman Oaks, California

Steve Brown (left) and Bernard (Bud) Brown on the cover

When Bud Brown became the sole owner of Hoffman Brown Company in the mid-'60s, he decided on an agency management philosophy of "do the right thing every day and success will follow." His 40-year "experiment" in which all staff members are salaried-the idea being that salaried people sell only what a client needs-has proven to be a success. Because of the agency's unique sales approach and superior service, clients provide frequent referrals that contributed to the agency's $7 million in revenues in 2003-derived from commercial lines (60%), personal lines (30%), and benefits (10%).