UIS is marketing agency of the year

Rough Notes, May 2000 by McCoy, Thomas A

Six-year reinvention process leaves Grand Rapids, Michigan, agency in driver's seat for the future

Universal Insurance Services (UIS) of Grand Rapids, Michigan, is the RoughNotes Magazine Marketing Agency of the Year, winning the honor by an overwhelming number of votes from Rough Notes readers. UIS, featured in last September's issue of the magazine, is an 18year-old firm with 65 employees, five divisions and revenue per employee of $110,000. It has undergone a transformation of its income stream over the past six years-and, in the process, gained confidence that the soft market is nothing to fear.

"We believe that the agency brokerage side of the business is the place to be-we're in the catbird seat right now," says UIS President and Managing Partner William J. Rothwell. "There are a whole lot of opportunities out there as long as you keep your eyes open."

In 1994 Rothwell began his search for new opportunities. At that time the agency had been in business for 12 years and 93% of its business consisted of commercial lines accounts being written in traditional ways. Rothwell and the other owners decided that diversification was their best hope for gaining control over the soft market. A breakdown of their revenues today, across five divisions, shows how far they've come:

Commercial Lines (50% of revenues); Personal Lines and Small Commercial (10%); Marine (12%); Life, Health & Benefits (8%); and a third-party administrator division (20%).

This latter division is where the diversification process began. In 1992 Gary Cheesman one of the UIS partners, had a golf course conversation with a senior executive at Amway Corporation, a major manufacturer of consumer products based in Ada, Michigan. It led to the opportunity to quote on the life, health and disability business of hundreds of thousands of independent business owners (IBOs) affiliated with Amway nationwide. Universal got the account.

Then began an 18-month process of setting up the new Universal Distributor Benefits (UDB) division. The person tapped to run it, Pamala Bannick, had been with the agency for less than one year, having started as a temp in personal lines before moving into the claims department. "One of the owners, Dave Drake, remembered that my resume had listed experience in group life and disability," Bannick recalls. "They asked if I'd like to join them in a start-up program and manage the division."

Bannick began by working with a contract computer programmer to build software to customize the needs of their newly established call center. The call center was initially staffed with only four employees. After a year and a half, dental coverage was added to the program, followed in 1997 by homeowners and auto. In 1996 they also expanded the life/health offerings to IBOs in the Canadian market which also later expanded into auto and homeowners.

The division grew to as many as 23 employees, working two shifts from 8:30 a.m. until 10:00 at night. Eventually, streamlined workflow and increasing operational efficiencies resulted in paring staff to its current level of 10 highly qualified and cross-trained employees working one shift.

UIS currently insures about 17,000 lives via the TPA. The department is a fully functional sales, underwriting, policy issue/service and accounting team. "It is because of this team's dedication and commitment that we are the success we are today," Bannick adds. "All team members take shifts on the phones, even our optical imaging technician."

"It's a business with a lot of transactions and transmissions," Bannick continues. "We now refer to our call center as a communications center, to emphasize that the Internet is a growing part of the account handling process." IBOs can now choose to set up their own Internet-based companies powered by Quixtar, Inc., a sister company to Amway that launched last September. According to Bannick, "Quixtar provides us the opportunity to allow Independent Business Owners to link to our site, which receives some 50,000 hits per month."

Bannick maintains personal contact with large numbers of IBOs by attending 10 to 15 of their conventions each year. The close tie between UIS and the IBOs pays dividends for both UIS and Amway. "When we receive notification that an IBO is not renewing his/her Amway membership, which results in the loss of insurance coverage, we contact the IBO," Bannick says. "In 80% of the cases, we're able to convince the IBO to renew the membership and maintain the valuable insurance coverage."

As for other possible TPA opportunities, Bannick says, "We would welcome the opportunity to develop more TPA programs, especially since the Internet now allows us to operate more efficiently However, we will look only at new markets that will not compete in any way with the Amway program."

While UIS was building the TPA business into a significant profit center, it also was expanding its penetration of the Marine market. This is an important class of business in western Michigan because of the proximity of Lake Michigan and many smaller bodies of water. The agency already had the endorsement of the Michigan Boating Industries Association (MBIA) when in 1996 it received the endorsement of the Marine Operators Association of America (MOAA)-a nationwide network of marine businesses. A year ago UIS formed an agency-owned captive in order to provide another coverage alternative to marina owners who are MOAA members. "Already the captive has produced $1 million in premium," Rothwell notes.