Ryan Smith grew up in an insurance family, but it wasn’t until college that he developed an interest in joining Smith & Sons Insurance Agency, Inc.
“After coming to grips with the reality that I could never make a living as a performing cellist, I began to consider alternatives,” Smith recalls. “That’s when I caught a glimpse of what an insurance career could look like.”
Fortunately, the University of Central Oklahoma’s undergraduate risk management program made it the perfect place to begin exploring that interest – and it set the stage for Smith to bring the family business into its fourth generation.
Perpetuation remains a serious challenge for the independent agency system. Principals of smaller agencies cite uncertainty regarding the net worth of their agency as the prime obstacle to future ownership planning, while lack of available talent for succession remains a challenge for agencies of all sizes, according to the 2016 Future One Agency Universe Study.
But the study also reports that 80% of independent agencies have taken steps to ensure smooth ownership transitions in the future. Whether by choice or necessity, many principals are beginning to realize they can’t leave the futures of their agencies to chance.
In their own words, here are three stories from independent agents who are taking part in the successful perpetuation of not only their individual businesses, but the independent agency system as a whole.
Ryan Smith, Partner at Smith & Sons Insurance Agency, Inc.
The University of Central Oklahoma is unique in the state in that its College of Business offers an undergraduate degree track in finance – insurance & risk management.
With the support of my family, friends and a few outstanding professors, I got involved in my local chapter of Gamma Iota Sigma, which took me cross-country to national conferences. I visited Lloyd’s on a study-tour. I interned at a major domestic personal lines carrier in the underwriting department, which turned into a full-time position after graduation.
While “insurance” was a familiar term, risk management was the discipline that really intrigued me. I ended up working closely with the risk manager at SandRidge Energy, Susan Barnes. Her vast experience in insurance made me feel like I was learning from a Jedi Master. As time went on, I discovered I had the opportunity to join my family’s agency – the step in my career that I had pictured from the beginning.
For me, a career in insurance always meant ultimately becoming a small business owner. My dad, uncle, grandfather and I had numerous discussions, as a group and one on one, about how this perpetuation could be achieved.
Over the years, my dad and I discussed how what I was learning in my roles as an intern, associate underwriter and insurance analyst would benefit me later on the agency side. But it wasn’t until my grandfather’s death in December 2016 that I really considered the weight of adding a fourth generation to the agency’s history.
My great-grandfather, Walter, started the business as a one-man shop in 1923, around the time my grandfather was born. As a fourth-generation agency, our size and structure have changed more times than I will ever know.
Serving Southwest Oklahoma for over nine decades, the agency’s range of clientele has varied greatly. Today, our six employees are proud to support individuals and families as well as nonprofit organizations, small business owners like mechanics, bakers, dentists and attorneys, and even municipalities. Some have been clients for over 50 years, which really speaks to the community engagement of each of the generations before me.
As my uncle transitions toward retirement, our main focus is ensuring a smooth process for our clients that have worked so closely with him. Beyond that, I’m working on building relationships with carriers and underwriters and learning the agency side of the industry. In those areas, my dad’s help has been a huge bonus.
Until the next phase of the perpetuation, we are focused on keeping our book of business strong, adding new clients and supporting the communities where we work and live. Moving toward ownership is our shared vision – with the help of our trusted CPA and legal counsel, we plan to approach purchasing both new and existing shares gradually, carefully and as fairly as possible for all parties involved. We all understand this process can’t be rushed, but the insurance world has countless challenges ahead.
Now more than ever, our industry faces pressure from new technology – but that also means opportunity for Millennials and Generation Z. Exponential change, accessibility, automation, transparency – these are ideas we were born into. They’re our first language. Who better for a retiring agency owner to look to than the generations that only know a world of connectivity and mobile devices?
For most people my age and younger, the idea of a career in insurance probably conjures an image of wearing a suit and tie, being stuck at a desk behind a stack of paperwork all day. Groups like the Young Risk Professionals, Gamma Iota Sigma, the Risk Management Society, the Chartered Property Casualty Underwriter Society and the Big “I” Young Agents program are all doing great work to raise awareness about the dozens of fulfilling, impactful roles inside the world of insurance.
Heath Patterson, Partner at Alpha & Omega Insurance, LLC.
In my college professional sales class, a guest speaker from a massive financial institution asked, “What motivates the best salespeople?” Other students chimed in with answers like “money,” “cars,” “houses.” When I said I was motivated by competition, people looked at me like I had two heads. But if you win in business, doesn’t everything else fall into place?
In 2001, I graduated from Kennesaw State University with a marketing degree with an emphasis on professional sales. About eight years later, I started my career in the insurance industry at a small independent agency.
One day, I was sitting in the office of one of my biggest mentors when he looked at me and said, “Why don’t you already own your own business?” I didn’t have an answer, but the light turned on. After being in the industry for less than two years, I decided I was going to do it – I was going to be my own boss. I knew it would be a monumental task with plenty of growing pains, but looking back, I can say confidently that starting my agency is the best career choice I’ve ever made.
At the end of 2012, I contacted the Independent Insurance Agents of Georgia and signed up for a class on how to start your own independent agency. There, I learned that if I was going to make this leap, I would need to find trusted insurance carriers to partner with.
I contacted a group of agencies called Assure Alliance, a member of the Strategic Insurance Agency Alliance (SIAA), and met with a representative in early 2013. Although I originally planned to start an agency from scratch, the rep urged me to get feedback from agencies in my area first.
Alpha & Omega Insurance, LLC was the first agency I contacted – it was in its infancy, but already had a few carrier appointments. The agency was 100% personal lines, and my background was in commercial lines. I spoke with the owners about coming on board to round out the book of business and transform the agency into a one-stop shop for property-casualty insurance.
In February 2013, I went all in, using my savings and a three-year loan from a community bank. Today, I own the agency with my partner, Wayne James, who will retire in January 2019.
In the independent insurance channel, non-family perpetuations are rare. If I could offer any advice to my fellow agents out there who are dreaming of one day owning an agency, I’d start by encouraging you to get access to great carrier partners. Beyond that, what you need is a healthy fear of failure and a competitive spirit. You also need to be resilient and persistent regarding recommendations.
Robert Frost wrote, “Two roads diverged in a wood, and I – I took the one less traveled by, and that has made all the difference.” I could have taken the easier road and started a captive agency with a blue or red sign, but I have an obligation to serve my clients, and I have to be able to sleep at night.
Throughout my career, I’ve sold chemicals, flooring, graphic design services and printing, but nothing has been as gratifying as helping families and businesses through efforts at my current agency. I’ve tackled plenty of 70-80 hour work weeks in order to gain products, improve my industry knowledge and grow my business. My wife, Julie, is a licensed agent – we have a 16-month old daughter and a son on the way. I couldn’t have done any of this without her.
Unless you do something extraordinarily stupid or extraordinarily great, in 100 years, you’ll be totally forgotten. So take some chances and get out of your comfort zone. You can take the road less traveled, too. Our industry is counting on it.
Carrie & Kristin Ryan, CEO & President; COO & Vice President of ISU Hanson & Ryan, Inc.
Totowa, New Jersey
Not many insurance agencies have been able to perpetuate through generations. However, Hanson & Ryan Inc. has perpetuated through not only generations, but centuries.
Throughout our history, one major trend has enabled us to prevail as an agency: supporting our community. During the Great Depression, our agency leader Frank Hanson found ways to assist community members who struggled to afford insurance, as well as life’s basic necessities. He also involved himself in politics, making a difference with one meaningful vote.
Today, we continue to hold true to our roots and support not only our employees and carrier partners, but also our clients and community as a whole. Our greatest challenge as fourth-generation business owners is living up to those who have made an impact before us.
Our father’s story did not go according to plan. He lost his father, James L. Ryan, when he was just 35 years old. As a husband and father of three, Terry had to learn how to carry the business into the next generation with only the memories of his father, education and support from his team, family and friends.
By perpetuating the business during one of the toughest times, our father taught us to prevail, regardless of the challenges and obstacles before us. As of June 1, we are officially majority owners of ISU Hanson & Ryan, Inc. Now in the same age range as our father when he became an owner, we have spent the past few years learning how to become not only agency owners, but leaders.
Another well-respected agent once asked us how we hire and maintain such great account representatives. We told them we don’t hire account representatives – we hire amazing personalities, who have the ambition to learn, transition and grow with our agency. These personalities become the core of what we represent.
Important to our perpetuation is keeping traditions alive while advancing with time. Just as our father wanted to improve the organization after his father passed, we have the same drive to keep the momentum going forward. We are constantly breaking down walls—both literally, through our recent office renovations, and figuratively, with the technology we use daily. Fortunately, our staff fully embraces these changes, and even gets nervous if something new isn’t on the horizon.
Since 2015, our agency has won two awards for being a Best Agency to Work For. This is not just a family business because of the owners—we have several other families as well as friendships within our agency. You can often find us together outside the office, and as a smaller corporation, we’re able to be flexible with our employees. Maintaining such a strong bond with our employees emphasizes our teamwork mentality and enables us to work toward the greater good of the whole organization.
Over the years, Terry has been an important role model to not only us, but also his employees. He remains an active board member and consultant to the entire staff, and his knowledge goes well beyond any textbook. Terry teaches us to remain true to our mission: “We work hard to earn your trust.” Early in his career, one of Terry’s major achievements was founding the Young Agents Council of New Jersey. That’s where he met his wife and our mom, Deborah Parisi, who at the time worked for Otterstedt Agency. Currently, we’re both active on the committee, and Kristin serves as president.
Most people often wish they could be two places at once. Fortunately, our similar appearances, attitudes, passion and work ethic allow us to fool many (unless we’re on a golf course—only one of us prevails). People often cringe and ask us how it is to work with family. But we usually laugh—being partners comes naturally. We’ve been partners in crime since birth.