A business approach to running an agency leads to extraordinary growth

Rough Notes, Jul 1996 by Pillsbury, Dennis H

In 1982 Glenn Horton and Frank Poppie purchased the Horton Insurance Agency, Orland Park, Illinois, from Glenn's dad and uncle. At that time, the agency revenues were around $300,000. This year, the Horton Agency should do about $7.5 million and employ some 85 people, following a merger with an agency that employs 15 people. That merger should be completed before the end of the year.

Glenn, who is president and co-owner of the agency, attributes the success to the fact that "we fundamentally approach the agency business as a business. At most agencies," he continues, "the owners are insurance people first and business people second. Business gets a lot of attention at our agency."

The Horton Agency is very growth oriented, but with a clear eye on what it costs to grow. "We operate at a very modest profit," Glenn notes. Any additional profit is plowed back into the agency to hire new producers or acquire new business. "Money is primarily used to expand," he says. Focusing on a variety of management disciplines "Business is not simple; it's not one single thing. You can do really well for a while even if you're poor in certain areas," he continues. However, he adds that for long-term success, "you need to be good at a lot of the elements.

You've got to really focus on everything." That includes quality management, client focus, technology skills, producer development, marketing and so on. Glenn says that there is a fundamental philosophy from which everything else develops - "every single process has to start with its effect on the client. Whenever we consider something new, we first look at how it translates to the client. Nothing is important unless it's important to the client."

The agency has to provide both tangibles and intangibles for the benefit of each client. The intangibles include responsiveness, service, trust and so on. One of the keys to have the agency people treat clients well, Glenn says, is "we have to treat our own people well and then they will probably treat customers well." He goes on to admit that he is not naive enough to expect everyone to be delighted with the agency, but adds that everyone works hard to develop an atmosphere where all can succeed and all are involved in determining the agency's destiny. Life and health CSRs Jan Holke and Kathy Boothe.

"This is a very important part of what we do," Glenn continues. "I really believe in planning. We involve multiple people in the planning process, trying to develop a consensus. We want to have people who share our vision and the best way is to have them involved in developing that vision. In addition, we share all the information that we legally can, including financial information, with our people. That's how you get the buy-in from the employees to support our goals and participate to the extent that they can. We obtain an evaluation by an outside source that is shared with everyone. People buy in to a clear vision and want to be associated with a winner. By sharing the information with them, they know where we are and that we are successful and they've been part of that." The agency also has started providing ownership opportunities to employees - 5% of the stock (non-voting) is owned by 19 employees. It's proven to be a real motivator.

As to the tangibles, Glenn points out that "every commercial account goes through a very refined and extensive auditing process to make certain we don't miss any coverages that may be needed." He notes that this became absolutely imperative as the agency grew. "With 21 producers, you can't depend on them all to do the same thing. The auditing process makes certain we don't miss a coverage and that it is properly priced. For example, we require that every workers comp policy include an NCCI mod sheet analysis." All the clients are told about this procedure and informed as to what is going on.

Once coverage is decided on, "we include a letter with a summary of the insurance that they've purchased and also include a list of coverages that are not included in the package. We want to make certain that the client realizes exactly what he has agreed to, including any coverages that he or she has declined," Glenn concludes. (He adds that he has had the good fortune of never having to go to his E&O carrier, but these letters also constitute a good first line of defense against any E&O claims.)

The aforementioned business plan is the cornerstone of the agency. "We worked the business plan to death so that we could really focus our direction." And, not surprising to anyone who has talked to Glenn for even a few minutes, he doesn't believe it's ambitious enough. "I think we will exceed the goal of $15 million in revenues by the year 2000," he says. "We've had some good initial success." The business plan starts by delineating the agency's current core strengths:

- a proactive program of internal new business production - an effective ability to add and cultivate new producers

- the strong development of expertise in multiple lines of insurance - a concentrated focus on operations and systems management techniques - a quality management approach - a group of professionals and support staff who are devoted to growth.