How to Embrace Personal Lines and Unlock Your Niche

Joey Giangola: Mr. Ben Rathbun, how you doing today, sir?

Ben Rathbun: Doing well. How about you Joey?

Joey Giangola: Ben, I'm hanging in there. I'm doing all right. I want to know this before we really jump in to anything too serious. Based on limited evidence, whose decision-making do you not fully trust?

Ben Rathbun: Interesting. Based on limited evidence, I'm going to say my grandpa.

Joey Giangola: Okay.

Ben Rathbun: And that might be an unpopular answer, but I guess we just do things a lot differently in the agency than we did in 1989 when he retired. And I guess I'm not going to use that answer as a negative. I don't think that he did a bad job, but I think we have to run agencies a lot differently than we did 40 years ago.

Joey Giangola: All right. For me, Ben, it's somebody that uses the bathroom on a short airplane flight. I don't know what they're doing prior. It feels like there are plenty of options to avoid that occurring. And I mean if that's their thing, I'm not going to stand in the way, but I just never understand it.

Ben Rathbun: That's a much better answer.

Joey Giangola: Well, I've had time to think about it, but it's not fair. I want to move this over to the world of insurance since you've already brought us there and maybe more on the client side of things. And I guess maybe what's something that you've been potentially surprised by or just the overall decision making of clients that you have to maybe sort of straighten out? Just how did they get to you and the knowledge they have about insurance? Where have you found yourself sort of, I guess maybe surprised at the conversations you have with people and their overall base knowledge and what do you have to do to sort straighten it out?

Ben Rathbun: I guess I'll just take an example that happened this morning. I had a customer. I think we're in a hard market so we're having to have conversations with customers that we've just never had to before. Being a lot more heavy on the risk management side, advising people on turning claims in, I had a customer who wanted to turn a claim in on a 30-year-old roof, which was not going to be covered. And when I advised her against that and that her rates would go up, she said, "I don't understand why insurance companies charge you for prior claims. They've already paid it. I don't understand why."

To me what a illogical statement to make. But I think we're counseling people left and right on just because you have insurance doesn't mean you turn a claim in for $1,000, and we're having that discussion 10 times a day now. So I think we're just having a lot more discussion from a risk management standpoint as opposed to just a rate standpoint as what can you do to help yourself when it comes to your renewals skyrocketing right now?

Joey Giangola: Yeah. It does seem like there is a base level of awareness that isn't sort of how to use your insurance and there maybe isn't. I don't even know that there is. I don't know. Now that I'm saying it out loud, I feel like I don't even know that we even consider it. We talk about getting it and the coverages, but then there's the maybe how and when that maybe is escaping us a little bit. Have you found maybe yourselves falling into that a little bit more?

Ben Rathbun: I think that we assume people know a lot more about insurance than they do. I hired a chief administrative officer about nine months ago and she came to us and it was her first week and we explained to her the difference between independent and captive. She came from a world that didn't need to know about insurance. She just needed to know how to run my life basically, which is not an insurance skill.

But it seemed very interesting to me that I just hired a C-suite person who didn't know the difference between independent and captive. I mean, she's 40. She's bought houses before. She has been an insurance consumer for 25 years. And I think we often in our agency consider ourselves an education company that just happens to sell insurance. I'm going to let you know what your exposures are. You can make the decision on whether or not or to what level you want to protect yourself. But I think a lot of times we assume that people are making risk management decisions, they're not.

And so we find that people don't even know what their insurance is. So I think sometimes we need to go back to the basics and just explain to people what they're paying for.

Joey Giangola: Well, you mentioned right off the top in terms of your grandfather and the way that he maybe did things that may be different than today, and that might in some aspects bleed over into sort of that consumer mindset or just the overall how they view the product and just the overall industry. What do you think is different? What do we need to do to change that to what do you focused on I guess maybe more specifically onto sort of bring that into whatever you feel is a more evolved and aware insurance buying public, I guess?

Ben Rathbun: I don't think the message is different. I think we just deliver it in a different way. We're third generation. My agency's been around for 68 years and my grandpa's two brothers started the agency back in 1956, and my dad was there 39 years until he passed away about two years ago. And so I was kind of born and raised in insurance, and I've had a lot of customers who are multi-generational customers who will sit in my office and I had someone say, "Your grandpa used to come and sit at the kitchen table anytime a kid turns 16." And this is back in the '60s.

And I thought, "Well, I'm not going to go sit at everyone's kitchen table and explain to their 16-year-old what they need to know, but I think that's a really cool thing that he did, and how can I incorporate educating young drivers into how I sell insurance?" And so I think that we're not necessarily creating a different message. We're just delivering it in a way that's more accessible to the people who want to access it now. And I think that just looks a lot different than it ever has before.

Joey Giangola: I'm going to go out there, this is a little out there, so feel free to say, "Joey, you're way off track." But I mean the economics of the whole thing, to sit at a kitchen table for a personalized, it doesn't exist anymore. And that's probably more of a societal thing and just inflation, just the economy, all of the things. But yet the expectation still remains like that's good service, but yet the business really couldn't function if you were to operate it in a manner. I don't know if there's a question there, but that seems like again, the expectations of the consumer have not caught up or maintained with where the business has to be to function properly.

Ben Rathbun: I think for years we have done such a focus on sales and not operations and service as an industry. So I think a lot of times when we talk about people not understanding their insurance, we do a really poor job of explaining to them what it is. And I would say that back 40 years ago when my grandpa was handling the agency, it wasn't a thing that you reached out to someone before the renewal and presented them options and presented them. That's just not what you did.

And that doesn't mean that shopping and remarketing all the time is the right answer, but I think that we're just having a lot more proactive discussions with people before they even get their renewal so that they really understand what they're buying as opposed to just being upset about the price. No one likes to use their insurance, but I think people have no idea what they're purchasing.

It's interesting when you talk about the economics of even personal lines of insurance. We're very personalized, heavy 75%, and I have agents all the time say, "How do you make money selling personal lines? I don't understand that." It's very simple. It's very simple. You know how easy it is to write an auto own home policy. Not hard it is to write a business. It's more work than an auto own home policy. But I think everyone gets efficient at what they're good at and we've gotten very efficient at servicing personal lines. And I think you have to educate people in a different way.

If you go to my website, I have 500 blog posts that all have different personal lines topics, and people come to us all the time because they've sought out information and found answers on our website, and then they'll come to us because they trust us and feel like they're educating us.

And so I think when we provide them a lot of that education before they ever come to us, that sales buying process is shorter because we've already educated them from the beginning. We've set expectations from the beginning.

And so I think that there's a lot of different ways to run an agency, but I think that a lot of times people neglect personal lines as not something that they should focus on. If you have a car, you have a mortgage, you need insurance. And to me that's just never really made sense. But I think that a lot of times we get caught having inefficiently servicing personal lines. I think as an industry we do that and we kind of coddle people as opposed to talking about their actual risk with them. You have a puzzled look on your face.

Joey Giangola: No, no. I guess what I was going to go is, I guess, have you ever been tempted by that, the dangling carrot of a commercial lines policy, because again, you see-

Ben Rathbun: Oh, I write commercial all day long. I'll write a commercial policy every day of the week.

Joey Giangola: Well, so like you said, the agency's primarily focused on personal lines, but yet you will do commercial. And where do you know how to draw the line? What do you like to go after on the commercial sides of things and how do you effectively, because some people, like you said, they try to do more commercial. It feels like a graduation to do more commercial than it is to stay on the personal, but it sounds like you guys are very comfortable with where you're at.

Ben Rathbun: Yeah, I think that's an interesting question, but I think it's just knowing what you're good at. I'm not going to write every piece of commercial business that comes across my plate, but I think that within our agency we've kind of developed niches. My business partner writes a lot of construction, a lot of contractors, I write a lot of nonprofits, which kind of happened as a happy accident starting ... Nine years ago I started actually replaced all of our advertising with just direct donations to nonprofits.

I found out my dad was spending $400 a month on Yellow Pages. Ever heard of it? The phone book. So we just basically removed all of that and just everything was a donation. So we do a quotes for a cause, we do $1,000 a month through a different charity. We've been doing that for eight years. But then all of our producers are all on local boards, we're all sponsoring local festivals and events and things like that.

So basically we've funneled all of our marketing directly into nonprofits. Happy surprise. We ended up writing a lot of nonprofits, but we've also built a lot of relationships with them over time where we're kind of known as who writes nonprofits in this area, which has been a very happy coincidence.

Joey Giangola: Again, like you said, it sort of happened by accident, but as you find people that start to dabble with commercial, they struggle to find their footing. And do you think it would've gone as well if you hadn't just accidentally fallen into this niche because it does seem to happen more often than not that way where you just find yourself in that niche, and-

Ben Rathbun: I mean, I think we're just skipping, we're getting way more intentional about our niches and being more focused in that concentration. I have two producers who are personal lines who are just starting to dip their toe in commercial lines. We're encouraging them not to boil the ocean.

I have a producer. He loves fishing. He was fishing last week for a week. He's starting to write some fishing guides and some things that he's legitimately interested in, finding solutions for people that he came back and was like, "I'm so excited to talk about fishing or insurance while I was fishing last week." Well, he legitimately was excited to talk about insurance while he was fishing. I'm not going to go fishing and talk about insurance.

I have another producer who she used to run events for the local visitor and convention bureau, so she has a lot of relationships within the hospitality industry and hotels, so we're encouraging her to attack that.

My business partner used to own a restaurant, a fine dining restaurant, so he writes a lot of restaurants. But I think we've just gotten more intentional about you can waste a lot of time trying to find coverage for any business under the sun, but just getting a lot more intentional about our carrier partners and making sure that we know what our carriers want and fitting their appetite so that we're not going ...

I think a lot of times people prospect without thinking about what markets they have. Why would you not look at your markets and figure out what they're really good at and then go prospect? And that's always seemed very backwards to me because we have a lot of carriers in our agency that are very good at very specific things. And why we wouldn't prospect using that way? I think we just have to get a lot smarter about how we're doing it.

When you talk about how my grandpa did it or how there wasn't a customer relationship management, that wasn't a thing in 1956. And so we've just had to totally adapt how we reach customers. But I think that also gives us the opportunity to reach people a lot more effectively and efficiently and service them in ways where some of their touch points are technology and that's allowing us to be the human that answers the phone when they call.

Joey Giangola: Have you found yourself needing to do the other way around, flipping it a little bit of saying, man, again, now that you're niched down into nonprofits per se, you need to go out and find that next market, or can we go get somebody that fits this? What do you find easier? Do you enjoy sort of mining what you already have or have you found any success in going out and looking for something to fit maybe an appetite or business that is finding its way to you more often than not?

Ben Rathbun: I think that's a moving answer. I think now that we've gotten better at what we're good at, we're getting better at targeting that.

I would say that the agency two years ago and the agency today are very different. And I think for a long time we just wrote whatever came across our desk and we got good at that. If you want to steal this idea, someone needs to make a T-shirt that says "Renewal commission is the death of innovation" because what other business can you make 12% to 15% on your renewal for doing jack? Literally nowhere. But to me that just doesn't make any sense.

Joey Giangola: Yeah, it certainly makes things easier knowing that even if you're average to below average, it's still going to be pretty darn high as far as somebody staying with you.

Well, so then let me ask this obvious question. How do you keep the fire lit then, Ben? What keeps the motivation going? What keeps the innovation engine churning?

Ben Rathbun: I'm excited. We're making a lot of changes right now that I think are going to set us up for success. And like I said, a lot's changing, but a lot isn't changing. And I think we have a lot of, we're dealing with the low hanging fruit right now and just being more intentional in your sales efforts. Even simple things like, "Hey, we have all these nonprofits. Let's write all their employees personal insurance."

We're just getting way more specific and targeted about how we're cross-selling and upselling. And I think we're getting to the point where, as we figure out what we're good at, yes, we're going to go and look at other markets and figure out how we can market that. But I think a lot of agencies don't recognize what they literally have right in front of them, and it's a lot easier to upsell a customer, sell them another policy than to write someone else. A lot of times we have a lot of business on our books that we're not selling that's literally already there.

Joey Giangola: All right, Ben, I've got three more questions for you, sir. The first one is, what's one thing you hope you never forget?

Ben Rathbun: One thing I never forget, my grandpa. So I own our agency building with him. The renewal comes up every September and he still will call me. He's 89 years old, and he will read every policy form and he will ask me, "Why did this change? Why did this change?" And I'm like, "Grandpa, this BOP is $1,800. You're wasting my time." But I appreciate that, and something I hope I never forget that most agents do is that we still have to read policy forms, and that's not something that we can never forget.

It drives me nuts when we have people who come to us and they're like, "Is there coverage for this," people within our agency. And it's like, "Did you read the policy form?" That's literally what they pay off of. It's our job to read policy forms. And I think as technology improves, a lot of times we don't arm ourselves and our staff with the tools to understand legitimately what we're selling and how it's going to respond to why we're selling it.

I think technology is great, but we have to use it as a way so that we can be more human, so we can take out the parts that we don't need to do, then we can still build that relationship. And so I hope that we never get away from remembering what the product is we're selling and remembering that we actually have to know what it is if we're going to be able to adequately protect people.

Joey Giangola: Now, on the other side of that, what's one thing you still have yet to learn?

Ben Rathbun: Well, I'm 30. I'll be 31 in a month. And so I guess I got hoisted into running an agency at a very young age. I mean, my dad died and I was at the agency the next day because I had 15 staff that I needed to take care of and 2,500 customers that needed to be handled. And I think just I'm learning to pivot better, and I think when you run an organization, you have to be able to pivot 24/7.

I don't think that's something I don't know how to do, but I think I'm just getting a lot better at juggling all the things on my plate and learning what to delegate. You can't do everything yourself. And it took a long time for me to realize that just because I could do something doesn't mean that I need to. And it took a long time for me to recognize that removing something from my plate doesn't mean that I'm bad or incapable. It just means that someone's better at doing it than I am, and there's higher value things that I should be doing. So that's a work in progress.

Joey Giangola: All right, Ben, last question to you, sir. If I were to hand you a magic wand of sorts to reshape, change, alter, speed up really any part of insurance, what's that thing, where is it going and what's it doing?

Ben Rathbun: Okay, I could get on my soapbox for an hour, but I'll try and condense my answer into a minute. I'm dying on this diversity hill on the independent agency system, and it's an uphill battle I have. When my dad died, I had one person of color working for me. We have four now. And I was just having a conversation with one of my agents last week who legitimately sold a policy because the business owner had never talked to someone who looked like him. And the fact that he knew about insurance was literally a cherry on top.

But I talk to a lot of agency owners all the time who run agencies that have a lot of employees, and they don't look at hiring diverse employees. I had an intern over the summer who's bilingual, put a whole marketing plan together for how we're going to attack that market in Lansing. And he's basically written a job for himself. He already did a whole focus group and went out and did a marketing study, and he's 18 years old and can't wait to come back and work for us. And there's people he's going to sell insurance to that are going to buy it from him simply because he looks like them and can relate to them.

To me, I think that's absolutely ridiculous that we're not focusing on hiring diverse talent more. We actually, in our agency, we created a minority internship program, and then we created what we're calling the Internship Passport, which is a basically program that walks someone through a 16-week internship where they're trained by every single person within the agency, not just one person.

And so we brought Miguel through the passport. He learned how to be an intern, every aspect of the agency and every aspect of the industry. He job shadowed at carriers at the Department of Insurance, got fired up about insurance and is super excited to come back and work for us. So we actually copyrighted the Intern Passport, started another company called Genuine Immersion. And Genuine Immersion is creating onboarding passports for agency owners to bring diverse interns into their organization.

Joey Giangola: Ben, this has been fantastic, so I'm going to leave it right there.

Ben Rathbun: Well, thank you Joey.