NICHE KNOW-HOW

Rough Notes, May 2004 by Boone, Elisabeth

For Insurance Service of Asheville, niche marketing paves the way to profits

Nestled amid the breathtaking beauty of the Blue Ridge Mountains, Asheville, North Carolina, combines gracious Southern charm with 21st century sophistication in commerce and industry. A city of some 65,000, Asheville boasts a solid and diversified business community as well as a thriving tourist trade. This picturesque city is home to Insurance Service of Asheville (ISA), an independent agency that was established in 1958 by James Stickney, III, father of the agency's current president, James Stickney, IV, AAI.

"Dad had no capital, a good reputation, and a lot of contacts," the younger Stickney says, "and he built ISA into a small but sophisticated agency. From the very beginning, he had the desire to get involved in the more complex and challenging accounts."

"Complex" and "challenging" are accurate descriptors of the kinds of business Insurance Service of Asheville writes today. Key target markets are trucking, municipalities, health care, and self-funded group and workers compensation accounts. The agency also arranges insurance for the lavish Biltmore Estate and for a large cooperative for Coca-Cola bottlers. Nearly 50 years after it was founded, pursuing profitable niche markets is still at the heart of the agency's philosophy.

A family affair

Insurance Service of Asheville is very much a family affair. The younger James Stickney started out as a CSR in 1978 and rose to president in 1996. he also gained valuable experience by establishing the agency's group and employee benefits department. As president, his responsibilities include management, mentorship, production, and building client relationships.

In 1985 Jim's brother, Sam, joined the agency. "He took over a book of business from a small agency we acquired around that time, and he's now our executive vice president, specializing in health care," Jim says. "More recently my sister, Mary Alice, joined the agency after a career in government. She serves as our business manager and has done so well that she was promoted to vice president of administration," he adds. "My dad now has the pleasure of having all three of his offspring working in the agency as officers and owners." Although he and his siblings own and manage the agency, Stickney notes, "we consider our employees family as well."

ISA has a staff of 16 employees, of whom five are producers. Although the agency's principal operating territory is Buncombe County, many of its accounts conduct operations outside the county. Some 80% of the agency's $18 million property/casualty premium volume is commercial risks. Twenty percent of the firm's overall revenue of $2.5 million is generated by group health accounts. "Group definitely has been a growth area for our agency," Stickney observes. "This business nicely complements our larger commercial accounts. We've successfully crosstrained some of our producers in P-C and group, so when we call on a commercial account, we can wear both hats."

Stable and flexible

How does Insurance Service of Asheville seek to position itself in the marketplace? "We work primarily from referrals," Stickney responds. "We're now debating whether we should raise our profile through advertising and become a more aggressive sales organization. We enjoy good visibility and good positioning in the community by virtue of our longevity," he notes. "We've maintained my dad's vision and reputation and values, and a key advantage for us is local family ownership. That's becoming a rare thing, and we've protected it. We've had opportunities to merge or be acquired, but our structure works, and we intend to keep it," Stickney asserts.

"Our closely held ownership also gives us the ability to make decisions and take action quickly," he says. "We enjoy the confidence of our underwriters, and it's extremely important to us to maintain personal relationships with these partners. That makes a major difference when we're trying to distinguish ourselves from other brokers. When we're representing a particular risk in the market, that level of trust is absolutely critical," he says. "We nurture and protect our relationships with underwriters very strongly."

Another factor that contributes to the agency's success, Stickney observes, is its independence. "We're not an agency that traditionally has been motivated by trips and deals from our carriers," he says. "We place a piece of business with the carrier that fits it best, and it stays there. This principle is very important to us, and it's becoming increasingly important as we diversify our book of business. Because our book is so diverse," he adds, "we're required to maintain relationships with a lot of specialty underwriters and other nontraditional markets. About 40% of our total commercial volume is in nontraditional markets. We need these markets so we can serve our more complicated risks."

Trucking for profits

A major growth area for Insurance Service of Asheville is trucking. The agency's location in the heart of North Carolina's vast furnituremaking industry positions it ideally to write a wide variety of trucking risks, and over the last few years the agency has developed considerable expertise in this challenging market. What's more, the agency has a secret weapon that gives it a significant edge over its competitors: Gary Perry, who serves as commercial lines marketing manager and as a producer, actually has experience as an over-the-road trucker.