Agents Must 'Walk The Talk' To Succeed

Making promises to get business in the door is easy for independentagencies, but delivering on those promises is the hard part. That'swhy the emphasis for one Los Angeles-based agency, says the firmstop dog, is to make sure that when they say theyve got a strategicplan, clients are not disappointed.

Simply put, says Gregory D. Davidian, chairman, president andchief executive officer of Dodge, Warren & Peters InsuranceServices Inc., an agency has to be able to “walk the talk” tosucceed. At DW&P, it is their intent to do just that byproviding unique informational programs to their clients andcultivating open, honest relationships with carriers.

As one of four agencies receiving an “Honorable Mention” inNational Underwriters first “Commercial Insurance Agencyof the Year” award program, the basis of the agencys relationshipwith both clients and carriers is building value. “If you valuethem, they will value you back,” explained Mr. Davidian.

However, he noted, the role of the broker is also a balancingact between clients and carriers. The broker, as advocate for theclient, must sit down with a carrier to get the best possible dealon price and coverage. By the same token, the agency needs tosatisfy insurers, who frown upon those who bring thempoorly-performing books of business, so loss control iscrucial.

Agents also get caught in the middle of client-insurer disputes,particularly when it comes to claims disagreements. It is thebroker's job to try to keep the peace and make sure both sides getsome satisfaction–that's what ultimately affects the clients costof risk, the insurer's loss ratio, and the agency's value to both,he added.

“It is a challenge for agents and brokers in their relations[with clients and insurers] because they have to be able to dealwith the parties in such a way that they do not shoot themselves inthe foot,” Mr. Davidian remarked. “Both need to be upfrontrelationships, not an adversarial transaction. A client might bethinking one way; the insurer might be thinking another. We need totake care in our work.”

Such care does not mean acquiescing to thewhims of either party, but instead working to be informed aboutboth the clients and carriers businesses so an intelligent case canbe made, whether in placing coverage or settling a claim. Then, forthe agency, the key is delivering on the products and servicespromised.

This approach, in the 25 years DW&P has been around, hasproduced a premium volume of $200 million through six officesthroughout Southern California, staffed by 170 employees. While itmay be based in California, its reach is international, withclients doing business both nationally and globally.

Five years ago, DW&P put in place an Employee StockOwnership Plan, which bought out the agency's founding principals.The ESOP “empowered” the management team with new freedom andincentives to refocus its energies, Mr. Davidian revealed.

“We increased our focus on the client,” Mr. Davidian explained,contending that the ESOP freed the team to extend the agency beyondproperty-casualty insurance services.

Educating clients on the risks facing them and how to improvetheir exposure profile is one important program at DW&P.Clients and their employees attend the DW&P Employer School,where a day is spent at their location going over such topics asreserving; workplace, legislative and human resource issues; andloss control. They also hold mock trials to help clients betterunderstand how a suit against them could actually play out in thelegal system.

Serving as a risk management and human resources consultantrather than merely a peddler of insurance policies, many clientsturn to DW&P for advice on liability questions, often relatedto employee relation issues, before calling their ownattorneys.

However, Mr. Davidian stressed, while the agency offers guidanceon issues such as how to prepare litigation-proof employeehandbooks, they advise clients to review all such moves with theirlegal department or outside attorney before taking finalaction.

When handling employee benefits, the agency makes certain thatemployees have easy access to human resource information byproviding it online, so workers can review company policies fromtheir desks or their homes.

The Internet also plays a big part in delivering certificates ofinsurance more efficiently. Certificate delivery is “no longer atime bandit,” the agency says, with access easily available online,in real time.

As beneficial as technology has proven to be, it has also been a“bittersweet” experience for the agency, Mr. Davidian pointed out.While all agency operations are automated, there have been the“typical problems with the system being down.” The cost of goinghi-tech is not something to take for granted, either. “It used tobe an item that you passed over in your budget; now the cost forone year gets your attention,” Mr. Davidian observed.

The agency elected not to develop any unique software, but touse proven systems off-the-shelf. There are two full-timeinformation technology people on staff, along with an outsideconsultant to offer support services. He said the agency learnedthat it was not worth purchasing “no-name stuff,” and now buys onlybrand-name technology that can be exchanged and upgraded everythree years. The agencys technology strategy is to eventuallybecome paperless.

In terms of its carrier relations, DW&Penjoys “personal relationships” with CEOs and division leaders ofmajor carriers, said Mr. Davidian–a relationship that they havebeen “invited into.” These include such carriers as AIG, CNA,Chubb, Firemans Fund, Hartford, Kemper, SAFECO and Travelers on theproperty-casualty side, along with Blue Cross & Blue Shield,and ManuLife, to name a couple, on the life and health side.

Outside of standard carriers, DW&P looks at setting upcaptives and self-insured programs based on “what the client'sdrive and needs are,” Mr. Davidian noted.

However, sometimes it is the job of the brokerage to “throw abucket of water” on a client who shows interest in the alternativemarkets, he admits, as the risks involved and the investment inmoney and time are explained. DW&P takes an analytical approachto alternative risk-transfer programs, and does not make decisionson whether to take a client into a self-insured facility “justbased on price,” he added.

“The client has to feel there is value to what we propose, likelawyers and CPAs, and not make them think we are car salesmen,” Mr.Davidian remarked.

In the years ahead, said Mr. Davidian, the agency is looking tostay independent, and continue to grow as a “producer-drivenorganization.”

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, September 23,2002. Copyright 2002 by The National Underwriter Company in theserial publication. All rights reserved.Copyright in this articleas an independent work may be held by the author.