Mergers and marketing fuel growth for AI&FG

CNY Business Journal (1994-95), May 29, 1995 by Hadley, Mark

SYRACUSE--Careful packaging and aggressive acquisitions are lifting Syracuse-based Associated Insurance & Financial Group into the big leagues in the upstate insurance market.

The company, incorporated in 1984 and previously a brokerage tied to MONY, has been flying more independently for the last four years, and its results show the benefits of its recent strategy. The company, headquartered in Syracuse's Armory Square, now boasts a $35-million book of business.

Gary Camp, president and CEO, and Diane Stahl, vice president, have built that book of business on two strategies. First, they have been absorbing smaller agencies--buying eight offices and opening one new one since 992.

The other strategy focuses on product development--designing insurance packages aimed at a variety of niches among small and mid-sized businesses, according to Camp. The packages, Camp says, focus on the needs of particular types of businesses, such as environmental contractors and environmental-remediation firms, transportation businesses, and supermarket chains.

"We give them programs that meet their specific needs and, because we are grouping them with lots of others in their line of business, we are able to give them access to national insurance markets that they have not had access to before. And that gives them coverages and policies that they could not get before," Camp says, adding that several of the programs have a national market.

Stahl, who owns 20 percent of the company, attributes much of the company's rapid growth to its staff, saying that service and knowledge are critical in building the business. "Nearly all of our 50 employees have at least 10 years of experience in the insurance business. Some have come from other agencies, some from major brokerages, and others from the insurance carriers," she notes.

"We really can't afford to bring in inexperienced people because the products and the markets are too complex. We have really relied on insurance companies as the training ground for the marketing side of the business," Camp stresses.

And that experience and knowledge have helped the company smoothly absorb the business of eight other agencies and a 50-percent interest in another. Stahl explains that, while AI&FG's record is aggressive, the strategy is relatively conservative financially.

"What we are doing is making down payments on the agencies with a five-year payout. And the payout comes from the revenues of the individual offices," Stahl explains.

The agency's aggressive record of acquisition has been vital to building the mass that it needs to construct and market the kind of specialized packages Camp has put together for various commercial market niches. And those specialized packages, in turn, are key to Camp's and Stahl's growth goals for the next three years.

Camp reports that they are shooting for about $60 million in annual premiums within three years. That means growing premium revenues about 20 percent a year.

"And the only way to do that is through 'program' business," Camp stresses. "You just couldn't do that one policy at a time."