#68 The Conrey Difference with Jerry Conrey

Great Episode with Jerry Conrey, Founder of Conrey Insurance Brokers and Risk Managers located in Orange, California.  Jerry is a true Risk Manager.  As an entrepreneur Jerry has trained and built his agency from a consultative risk management approach.  If there was a PHD for Commercial Insurance, Jerry would have one.  However, Jerry is anything but boring.  He is passionate, entertaining and extremely gracious with his time.   Jerry Conrey is someone that we need to hear more of in this industry.   Enjoy this episode with the Professor!!

https://conreyinsurance.com/

https://www.linkedin.com/in/jerry-l-conrey-mba-35b6273/

0:00 - Explore the intricacies of career choices, residual income, and the art of insurance sales. 🏢💼💰

0:58 - Navigate the fascinating career progression within the insurance industry and the leadership challenges that come with it. 🚀👥

7:10 - Learn the secrets behind growing an insurance agency through consultative risk management strategies. 🌱📈

14:03 - Discover the keys to building a referral-based insurance agency by adopting a consultative approach that nurtures client relationships. 🤝🔗

19:26 - Dive into the realm of commercial insurance and unravel the complexities of effective risk management. 🏢🔍

21:53 - Master the art of communication and understand the importance of tailoring language for diverse audiences within the insurance industry. 🗣️🌐

27:46 - Gain insights into the critical role of risk management in shaping hiring practices within an insurance agency. 🤝💼

33:11 - Explore the intersection of leadership, vision, and risk management, particularly in the challenging landscape of the restaurant industry. 🍽️👩‍💼

39:30 - Uncover the evolution of insurance agencies, focusing on client engagement and effective leadership. 🔄🤝

42:09 - Delve into the strategies behind agency growth and its continual evolution in the ever-changing landscape of the insurance industry. 📈🔄

47:47 - Get inspired to evolve your insurance agency for success by adapting to the dynamic shifts in the industry. 🚀🔄

54:02 - Conclude this enriching episode with a deep dive into evolving insurance agencies, ensuring they stay ahead and thrive in a rapidly changing landscape. 🌐🚀

Transcript

Welcome back everyone to another episode of the agents to owners podcast. With this, today is my pleasure to have from Orange California owner, agency principal of Connery, insurance brokers and risk management, Mr. Jerry Connery. Jerry, welcome to the show. Thank you for being here.
Thanks, Brad. I appreciate it. I'm looking forward to this nice conversation.
Yeah, me too. I've certainly enjoyed our conversations offline. You just have a I always have an excitement and you know, just a lot of information to share. So I'm looking forward to sharing with our audience today. So why don't you Why don't you tell us a little bit about your background, how you found this profession, and bring us up to you turning to independence in 2000 2002?
Oh, it's actually an interesting story. You know, I, I actually chose this career. I know where didn't choose me. I was probably 15. So this would have been like 1978 79. When I just before driving a car, I was on skateboards and bicycles with my buddies. And we'd go down to the local supermarket that had a strip center with a bunch of businesses in it. And I always got always a guy that appreciated cars, and I kept noticing that the best car in the entire parking lot belong to this guy that kept walking into the State Farm Insurance Agency office, this little dinky little office in Hacienda Heights, California. But he pulled up in this most beautiful coupe deville convertible coupe deville Cadillac, absolutely gorgeous to tone to I hope the guy still owns the car because it was that gorgeous, catching a 15 year olds eyes and let's face it, 15 year olds were more into sports cars and, and trucks and stuff like that. But this car was just extraordinary. And one day, I just I don't know what possessed me. I just went in the door. There, the lady is looking at this 15 year old karega a skateboard like what the hell do you want. And I said, I'd like to speak to the owner, the guy that owns that car out there, I noticed his car for a long time. And I just want to understand, you know, the business that he's in? Well, this guy took 20 minutes for me. And he talked to me about the career. And from that day, I realized that I didn't know whether I was going to choose insurance or not. But he explained the value of residual income. And that was so the career I chose, ended up being insurance because I felt that it was the best place for the opportunity to develop residual income. And and that's my story. It's a it's
an incredible story. I mean, one for you to use to notice that and to have the gumption to walk into the office, how many 14 or 15 year olds would do that? Maybe 1%. And then to sit down and understand, get an idea of insurance. Nobody's doing that. That's, that's an amazing, it's an amazing story. Well,
for those for those people that know me gumption is not something that they would find that I would be short on. At 15. I didn't realize I had it. I think my parents might have understood it. Or maybe some of my teachers did, but I didn't I just knew that I was curious. I knew that I wasn't afraid of things. And, um, and so I just, you know, I knocked on the door, he answered the call. And that was it. I mean, it set all of this in motion. It's an absolutely wonderful story that I like sharing anytime somebody asks, because I find it to be so relevant in today, that not enough people from industry, go into junior High's and high schools and talk to kids about career opportunities. I mean, we used to have career day, there used to be people that came to campus to talk about all the different careers and the opportunities, and I just don't see that happening anymore. And I think that he's had an impact on on an industry that has always been focused on community. And, and it was it was his community that he talked about. And he's the he was a, as a State Farm agent. He was a farmer, where I as a commercial agent, and more like a hunter. But it talks about the two marketing styles of an agency. And so, you know, I don't know what you want to talk about today. But those are some of the things that you know, as folks are considering, you know, hey, I can sell insurance, but am I right to own an agency? And if I am the most prolific salesperson, why don't I own an agency? When you start to consider those things, they also have to look at all the other responsibilities that come with The role that are not related to sales and in client relations. And that is, I guess the whole focus of your your test.
Yeah, yeah, it is. Let's, let's touch on one, I think you bring up an interesting point, I want to back up a little bit to, I think most of us say, a piece of what, you know, we were drawn to fits into this business was the residual income. Do you recall one? If if, if, if you understood that concept, when you were, you know, 14 or 15. And to I wonder if that, you know, if that wouldn't be a good way to recruit into this industry, whether it's at the college level or high school level? Because that is such a strong, I mean, that's the whole reason, really, that most of us are in the ability to earn that dollar over and over again.
Well, anybody that doesn't understand it, then they need to get an education on it. But yeah, you know, if you're in the end, it's not all insurance, right? I mean, health benefits are different. Life insurance is different, annuity sales are different, but in the property and casualty space, you know, the concept of, of writing a piece of business in one year, and having a 90 plus percent likelihood of it renewing the next year. And, and being paid for it again, on in exchange for being responsible for the relationship with the client and evolving the risk. And, you know, being the compiler, and I say, compiler, because I think it's important to understand insurance companies talk one language and customers talk to another, only successful agents only. If you're going to be a successful agent, you have to be capable of compiling information, and having it come out of you in an in a way that whoever it is that you're talking to understands what you're trying to convey. And the best agents are really, really good at that. Yeah, those that struggle aren't and they work on that.
Yeah. So let's, um, so what was your entry then into the insurance space from there,
so he was a State Farm agent. So first company, I called the State Farm, but at the time, it was 1986, I was just finishing college and 87, somewhere in that area. And they were going through a major change, they had been sued by a bunch of females that were denied. Agencies because of their gender, or at least, that's what they felt was the reason why they were denied the opportunity to be an agency owner. And so they had sued State Farm. And so State Farm was under a court order. And they had to pay a bunch of money to a bunch of people that didn't get the job, and then offer on careers to those. So not being a female at the time. I wasn't in the the mark. I wasn't the the market that they were looking for, to expand and grow. But Farmers Insurance was, and I got introduced to a district manager of farmers who happen to occupy the same building that my mother worked in. And at that point, I went and met him. And it was just a matter of maybe 30 days later, I was involved in, in, in, in training for licensing. Yeah,
okay. And then so you had a successful career as a producer, and then went on to become a district manager,
I spent seven years as an agency owner, and in those from 1988 to 95. And in that time, I became the largest commercial agent in California. And there were others that were writing that had more business aggregated, because they wrote a bunch of condo association stuff, but I was the most prolific writer of new business at that time, and had won all their awards and, you know, went to every event and, you know, I my wall look like what the words look like wallpaper. And and then they, they had an opportunity. There was a district manager that was retiring after 30 years and the role. It was a nice district. It was close to me where I was, I knew several of the key agents in the district. And, and frankly, you know, it's when somebody comes seeking you, it's very alluring. It's, it's, it's intoxicating. And so I was tucked into becoming a district manager. And by the way, I also crave the idea of knowing more and learning more like, the only thing I could see was the data on my agency, but a district manager could see the data on the district. Okay, yeah, and the The district manager opportunity ended up being a fairly good economic opportunity for me. So I took the cash value of my agency. And they sold it to a former district manager, somebody that wanted out of the district management world that should have been assigned. And I became a district manager and I spent five years in that role on and in then just found that farmers was, you know, they, they wanted to treat me as an independent, they wanted to treat me as a somebody who owned his own business, only when it came to tax time. And at all other times, they wanted to dictate how when, where, what and I was like, having nothing to do with it, I was a true entrepreneur, I understood my role. I did not want to be told how to do it. I wanted to be told what, excuse me, is stupid. I'm in a meeting, I cannot take this call. Okay, so call my wife.
Sorry, that's no problem. Charge.
Eight trying to let somebody in. And goodness, you know, if you want to Reese, you want to you want to ask that question. Again, we can do it again. But I just feel terrible that we were interrupted.
That's okay. No problem. No problem, we'll we'll get that taken care of. So let's, let's jump into you decided to leave your dem role. Because it wasn't wasn't for you. And you start?
Actually, let me be let me with you, you know, they actually pushed me out. What happened was, you know, they were starting to evolve to district managers becoming principals in the world of
financial services investment. Yeah.
And here, I had a district that at least half of the agencies could not properly write an auto or a home. And I was really frustrated with getting them to do the job, right. And now, they were putting me in a role and responsibility that if one of my agents failed to do the right thing, did not do the compliance correctly, did not do Safe Harbor with all this stuff, that it could subject me to being held accountable for it happening under my watch. And at the same time, it was generated, and I looked at what kind of time investment it was going to be, and what kind of money it was going to bring to the district. And I bought, and then took managers meeting with 155 district managers, I stood up and asked questions that they were not prepared to answer. And it went from one question for me to 50 questions from 155 people, and they shut the meeting down. And then I became public enemy number one. And they they tried to trump up, you know, something, it had to do with the SR 22. And I wasn't going to sit there and take them out for my people. So I dish them out to the agencies each had one. And when they would complete one, they could get another. And they didn't like that I did that on my own. And again, I owned the district, I was responsible, you're not going to tell me how to do it. And they tried to create an environment of termination under that scenario. And at that point in time, I said, you know, if you really want to take me on, you can, okay, but understand that for the next five years, I'm going to own your time. And my lawyer is going to is going to make you feel regret every bit of this. If you don't want me, I'll go, but you're gonna have to pay for me to go. And so I signed a confidential agreement to leave and they had to pay me to leave. And that was the difference in and that's how I ended up and I use that money to buy the agency that I own today. Okay, so that is exactly how I accomplish that.
Yeah. So let's talk about this new agency, then what was your mindset and strategy to grow this new agency?
What was 2001 and I was in a absolute growth mindset. At that time, I was 38 years old, had the, you know, the best of my, my business years ahead of me. And I just spent five years trying to get people to do things the way I thought it should be done, and realize that now I didn't have to do any of that I would do it the way I thought it needed to be done. And if you came to work for me, you do it my way. And I realized that this was the exact scenario like like, I think that this was God laying everything. You know, I went from being a captive agent to an independent agent. I went from having a PhD in farmers to barely having a beat a bachelor's degree in insurance when I realized all the different things I needed. To learn about the independent world, the agency at the time was 75%, personal lines was about it generated about 700,000 a year in revenue. And but it had all the right appointments, okay. And recognizing that there was this plethora of opportunity, and that all that was missing was someone who recognized what was there. I purchased the agency. And by the way, I was the first SBA loan ever, for the purchase of an insurance agency up to that point, they did not believe that the goodwill of insurance policies was collateralized double. And the bank that I went to, which was community bank, they and I convinced the SBA that they had it wrong. And now they're one of the biggest funders of emergency purchases. And to this day, they have yet to have a default. Okay, you have to have a default on a on an agency loan. And why? Because it's such a good, good risk.
Yeah, why?
The residual income? Yeah. Big bite, I learned at 15 years old.
How many employees were in that existing agency, when you when you took over?
There were two producers and six account managers and a and accounting person. So it was a it was a 10 person agency, including the principal and today, we're 17. But it's a very different environment. You know, I don't have any accounting people, I outsource that. So you know, a lot has evolved over the years, recognizing where efficiencies can be found. And now all of my people are here to either be a catcher and, or a or a goalie goalie to prevent a piece of business from leaving. And, and then producers who will help, really a new opportunities. Yeah. When
you you know, your emphasis is primarily on commercial. I imagine that's what it was when you took over word were you did you jump back into that production role? When you when you got started?
Fortunately, and unfortunately, I am the agency's Rainmaker. Yeah, I generate most of the revenue of the agency, the 50 largest accounts in the agency are mine, and they generate about 70% of the revenue, the whole agency, those 50 accounts. The reality is, is that is that yes, I dove right into it, learn the markets, learn the opportunity, got to learn the underwriters created relationships, got them to see what I'm capable of doing. They started to recognize that I wasn't typical that I didn't just, you know, write an app that was half ass and nail it in and hope and pray that they'd figure it out. But that I would engage the underwriter and talk about, you know, it may not be a square, and you might be looking for a square. But this is a great rectangle. And it's just a elongated square. And if you look at the things that differentiate it between being a square and being a rectangle, I think that these are things that you guys would actually be willing to write if you just validated and verified through my communication, what they do to protect, to prevent loss. And when when I started to have success in underwriting in that way, I started to evolve the entire way the agency did business and today, we are an agency that leads with consultative risk. And it gets paid for through the successful sale of insurance. But really what we do is broker record all the existing business that exists, get it into the gig, have us control the account at at at its natural continuation date. And then between the time that we vor it and that continuation date which we need at least six months. We dive deep into the needs of the customer, and help perfect the risks so that an underwriter would look at it differently than they do now. And yeah, that that has been our nomenclature, but now we use it as you know, our differentiator and the it's we're having success with
it. Yeah. What What was your did you have markets specifically that you went after? And then how did you approach or or, you know, market those those industries?
Well, I inherited Hartford travelers I inherited Liberty Mutual CNA, some pretty big carriers. And you know, if you can't find risks of those for one, something's wrong or you or you're a specialist in Unit Need to go in and get unique relationships with carriers that are in the space you're in. Um, so all I did was figure out what they really, really wanted. And, and then, you know, did the research to figure out who out there did the thing that they really, really wanted. And then we would drip market to them on and make phone calls to convince them to that we're different and that you should talk to us. And we don't make phone calls anymore. We're now 100% referral agency on what I ended up doing was building a huge network of attorneys, CPAs, realtors, mortgage brokers, property managers, just folks who are influential and consultative in their relationship with with with, with risks. And then when, when I started to be a solution for their customers, then they started to refer me more. And then I started to see what they were good at. And I would refer my clients for things that they could help them with, you know, auditing, human resource problems or legal problems. And that back and forth, ended up being this whole style of being encircling this whole, I have this whole group of people that can help me solve whatever problems I encounter within a risk. And I actually prefer to find accounts that have had challenges, because they're more interesting. Yeah.
So I want to kind of deep dive into this consultative approach. Partially because that is what I'm diving into right now, with the you know, with the markets that I'm trying to go go after. So you have something that is called the Connery difference. And you do such a great job of illustrating it. And I would recommend a lot of people actually to go to, you know, the Connery insurance brokers website, there's a lot of good information in there, but just look at his videos in the way that, you know, he communicates. I think this is something that a lot of us should be doing a lot more of specifically on our websites. But this is a video of yours called the Connery differences extremely well done. And I think everybody should,
wouldn't it be nice, actually great. If rising insurance and claims costs weren't draining the profitability and resources of your company, isn't it high time you exit what we call the hamster wheel of the typical insurance brokers process? You know, where year after year, they give you the same old spin about your rising insurance cost, whilst they pocket more of your hard earned cash come renewal time? Have you been wondering if there's a better way? There is, we call it the Connery difference. It's a fresh new approach to commercial insurance via risk management. How might you ask? Well, we consult with senior management, applying our proprietary methodology that utilizes the science of risk management and data analytics to identify and attack the root cause of what is actually driving up the cost of your insurance and putting a strain on management's limited resource of their time. From this analysis, we generate detailed reports utilizing our proprietary algorithm, helping the Risk Manager identify the root cause of what's driving up your costs and reducing your profit. And, more importantly, the cost of distraction. When those losses arise, something we know you're not measuring. In other words, contrary insurance brokers are risk managers as much more than your typical broker, we can be your partner in increasing profit. And let me address this now. We do this all on our dime. So there'll be no added cost to you for all this additional value. To learn more, contact us today economy insurance brokers and risk managers and get off that proverbial wheel.
Well done. Let's let's talk about
is still coming to watch does. I wrote every word of that. Okay. This is basically what is said in an initial conversation with a client. But I had to figure out a way to do it in in 90 seconds or less. Yeah, and once I got the script in my head, I then sent it to a marketing agency and had their illustrator create this whiteboard because I purposely did not want to videotape this and here's why. I you know, I'm aging, everybody's aging, but this is timeless and using the whiteboard also is less intimidating. It's like it kind of it's the animation kind of makes it it approachable. And so even though there's big concepts that are being represented and and the visuals I think, are almost perfect for describing, you know, the waste of time, like the spinning of all the plates at the end of the stick or trying to balance everything. And then, you know, you see the little thing showing lawsuits, depositions claims. These are the things that distract senior management from their strategic work. And what we've done is, we found software that could help us help the C suite of a business, understand what their claims are actually costing them. You know, a lot of people talk about total cost of risk. They say that term T Corp and everything, they don't freaking have any clue what that actually means. Because if you are not measuring the impact of loss on the distraction of senior management that is no longer focused on the strategic work they do. You go and you and all we had to do was look at history, we look at things when we look at the year of a loss and the following year, and then we would see that the sales would be on a rise, and then suddenly the sales dip, and why because the person who's leading has been distracted, and they're not in their strategic place, when we were able to figure out how to put $1 value on that. Yeah, then to get people to recognize that that their insurance is costing a lot more than they realized it is. And then when they weren't, you know, investing in, you know, like, for instance, maybe it's a risk that has 30 vehicles, and they have an average of two accidents a year. So over the course of five years, they've had 10 accidents, but each of those accidents cost them 100 hours of time, okay? Or, or, or what if it's trucks, and the trucks have special equipment on it, and it takes 60 days to repair a truck, and that truck is no longer in operation? And what about the revenue that that truck generated? I have an MBA and finance. Half the employees I have have master's degrees. And we took this data on and we built an algorithm so that we could evaluate what the cost of all these things are. So yes, we look at three years of of financials, we look at three years of premium history, we look at three years of claims history, and we plug all that that in. But then we use actuarial data, we use Department of Labor data, we use Department of Commerce Data, and we create a a report that helps a CFO or a CEO understand that maybe this investment that they felt that they couldn't afford, is costing them way more than they think then the money that they think they're saving, not spending the money. And we convinced them then to do what needs to be done. So that that risk that's had, you know, eight auto losses or 10 out of losses in in a five year period. We help them to recognize that would telematics Yeah, it's $20 a month per vehicle yet 600 hours a month, yet, $7,200 a year. But do you know how many hours you spent in depositions and in claims, and oh, by the way, if we don't save you in fuel, what you're paying in telematics, I'll eat a hat. Because minute your people know that you know exactly what speed you're they're going, where they're at what route they took, what they're doing, whether they're parked in front of a bar, or actually at the job site, they're supposed to be at, when when management has that level of awareness. It's amazing how efficient their operation becomes. And so we through time and energy, just show people best practice which we draw them the straightest line to, to grow in their profits. And we actually talk like financial people. We talked about the growth of profit, net profit EBIT, da, enterprise value, and because we understand that, we can talk in a way that most brokers can't. And that's the Connery difference. I
agree with all that. And I said, I love your video, I wonder. And we talked a little bit before we jumped on and built the ability to communicate with those that that you know, you're speaking to, so if it's a manufacturer, you're able to, you know, maybe tell that some of this light which is is going over their head, so you have to put it in terms that they can understand. That's a that's a real skill.
Some of the most successful people in business today don't even have a high school education. Yeah, what they had was a great idea. Great determination and maybe an artistic bent, right. They saw a solution to something others didn't because of their their way and because they didn't fall in like little soldiers and go to school in a certain way and they they walked the he'd have their own path, they become some of the most successful people in my, honestly, I can't tell you how many of my top probably 10 of my top 50 are owned by folks that do not have a college degree. And when you start to realize that I'm not putting down education at all right, but what I am sharing with you is that I talk differently to folks depending on on their level of education and what I learned from them pretty quickly, in the few minutes that we that we get to know each other. And I evolved my language and my skill, that's the compiling I talked about, I evolved the way I communicate so that I communicated a level that still shows that I'm educated, and then I'm going to help guide them, but not in any way putting them down for right, because let's face it, they're in the position of they're in the catbird seat, they get to choose who they're going to work with. And that makes them the powerful person in the conversation and isn't me It's them. And so, um, you know, I, if there's anything I could share out there with those producers in this world that are just looking to figure out why learn that you can't treat every client the same way, figure out how to treat that client uniquely. And you'll grow that relationship much quicker. And actually, you'll actually have relationships where I mean, to the point that I'm in stores, and people see me and come over and say hi, and honestly, I don't remember who they are than they did you know, and I have to fake it, you know, and then they finally say something that I figure out who they are, and then it comes all flashing back from that might be the fact that I'm 60 now it just I don't remember like I used to. But but the point is, is that is that they actually feel a connection. Yeah. And you can feel a connection when you talk to people the way that they prefer to talk and the way they prefer to communicate. Yeah,
yeah, I just one of the first things I thought when I, when I when I watched that video was, you know, if you say data analytics, and you see someone's, you know, you know, if they start to gloss over a little bit, you have to shift of what you're actually referring to, of your, here's your workers comp claims, or you know, a lot of things you you alluded to and speak into their language and relate it back to what it's costing them.
Well, the biggest success that I've had to date is I was hired by a, a regional grocery chain as risk manager. And the grocery chain was the broker on the grocery chain was none other than Marsh. And, and yet they came to little Connery agency to get advice. So they hired me as a as a risk manager. And they asked me to look into areas that they were having frustration, and their biggest area of frustration was they were having small slip and fall claims. And they were having work comp claims related to slip and fall. And but they didn't even realize that that that was what was driving their losses. They just knew that they had had so many losses. And so they prevented presented all the data. And our our ability to slice and dice data was that we learned that it was happening in the afternoons that it was happening in particular departments of the stores, it was consistent in the store. So it didn't matter what location the store was, it was the same place in the store, the losses were rising, and why? Because in the fruits and vegetables area, there's water. And they also have these maps down that they thought was good for that. But the truth was with the mats were also at a trip and fall hazard. So when we really did the deep dive and started looking at it, we realized that, you know, maybe the problem was the flooring. Again, if you use risk management, right, you get to root cause you get to root cause by asking the right questions. Get to the point of figuring out what the root is. In this case, we felt that the problem was we know I'm sorry, we felt that the problem was footing and the ability for people to and you can't tell your clients you must wear a non slip shoes at our facility. So instead we thought well can we change the flooring so that these shoes, any shoe can successfully navigated if it happened to be a little bit wet. And we found a product by Armstrong that we thought was was good, but the cost was going to be $70,000 in material and labor per store to install Plus, they would lose two half days of production. So our little algorithm was able to determine exactly when they would have return on an investment. And each store was going to cost about $210,000 Okay, between the cost of the materials, the labor and the loss business. But that too tend really was like 140. Because you also have to take the cost, it's weren't there, the labor wasn't there, the utilities weren't there. And if you're not smart, you're going to throw your numbers off, you have to help them understand what they truly were losing. Once we determined what that cost was, all we had to do is have a year, one year of data so that we could justify, and they went from putting installing that store in one that flooring in one store to installing that flooring in every store. Because the return on investment was met at the 15 month, and every month thereafter, they have generated more profit as a result of that change.
Well, that's high level risk management.
It's just me. Yeah. So what really happened, I got in my car and drove and looked in and met with people and talk to people. And you know, everybody wants to talk to the CFO, for God's sakes, he's in a tower somewhere, okay, you got to get down into the risk. And you got to talk to the people that are actually in it. And they were the ones that pointed out the issue. And I said, Well, have you brought it, we brought it, no one listens, blah, blah, blah. So I realized that I had a lot of advocates that if senior management was savvy enough to ask, would support my hypothesis. And so I flipped it around, and I became the, the, what's the megaphone of the everyday man that worked at that company? And, and senior management, listen, and then they heard it from me. So then they went and did their research and found out that their employees thought the same thing. And suddenly, it was as if my idea was this, this extraordinary thing. And they could have just tapped into it all along. But they just dismissed it over and over.
Let's shift a little bit to you as the agency principal, how are you spending most of your time?
Well, I'm in the unique place of actually being a principal that prefers to be an agent. So even though I am the broker of the agency, and I own the 93% of it, I I delegate all the things that I don't enjoy doing, I don't enjoy accounting, I don't enjoy hiring, I don't enjoy firing, I don't enjoy managing people. I like to manage risk, and I'm better at managing risks than I am. So I hired a general manager. And, and he took most of that off of my plate. And, and there's been, you know, success with that. And there's been failure, but that failure would have been mine, too. It isn't like he did anything that I didn't approve. So we have learned over time that you should spend a little bit more time hiring people than we were doing in oh one or 21 and 22, when the great resignation started to happen, and people started to, to leave, even though they weren't unhappy, they just were convinced by family and by the news and everything else that they should, that there's more money out there, if you go and demand it. Yeah, most of them are not where they left me to go to. So clearly, more money wasn't the thing that made them truly happy. We argued that all along. But we ended up hiring some folks that represented that they were capable of doing things they actually weren't. And, you know, I've I've spent two years trying to fix the relationships that were harmed, because of trust broken by folks who represented that they were working when they weren't or could do stuff that they couldn't. And, you know, it's a hard lesson. And I think that some people say, when it comes to hiring people that, you know, if you hire the wrong person, whatever you paid them, the damage could be to 2.5x of their salary, I believe. Yeah. What do we believe that?
That, that, that sounds really difficult. I've been, I don't have an operations person, or a manager, which is something I feel that that our agency needs. And that's a really interesting, a few rely on that person to handle those tasks and hiring being one of them. Because I would love to be there to save I think that's probably most of us. You know, most of us that came up as producers were were driven by growth. We're driven by a vision, right? You know, the, the managing people that's not necessarily probably going to be most restaurant suits. Sorted that put some, some stress between yourself and the general manager, or, you know, the rest of the team because ultimately your names on the door. And it
is but I learned a long time ago, that I don't always have to be right, right. Yeah. That you know, that's the hardest Some to learn. Yeah, my face is not I don't have to worry about saving my face I, I want to argue with him and cajole. And because we get better, it's sort of like, friction. You know, if you look at a, if you look at a diamond before it's been cut, you would just toss it aside as a funny looking rock. It isn't until it is cut until the friction of of the wheel is applied to it in the proper way that you see what's really there, you need to do the same thing with your operation, you need to recognize your operation is a is a diamond in the rough, and that you always need to be perfecting its symmetry. And, um, for me, David, Lillian RGM, he brings that that added vision, he is a professor of finance, he teaches it at university, I finally was able to convince him to give me his full time attention. And, you know, he's paid accordingly. And he doesn't teach anymore. But his finance, knowledge. And even though I have an MBA in finance, I've forgotten everything I learned, honestly, because I was hardly using it. But because he was teaching it every day, you know, he brought it into the agency, and it was his effort that helped evolve my risk management into something that others in the organization could do. Yeah, so he helped me what's the right word, commercialize it, you know, make it bringing components together to make it bigger and better machine. And so, you know, look, Prince, there are there are many principals who are evolving on to not be a producer, that they feel like that's what's holding them down, they don't want to work in the business, they want to work on the business. I never stopped working on the business. But I've never found anyone working in the business that had the same passion, commitment, knowledge or skill set to land the accounts like like I have over the years. And now the challenge at 60 years old. Now the challenge that looking at, you know, the end is near, I have to evolve my operation so that other producers are capable of carrying those pails of water. And we're just now on step one of a five step process to evolve me out of that private primary role. And so I'm going to take on the role of risk manager only. And I'm not going to do any brokering. And that's the way we're going to help accomplish this. And that way, even in retirement, I can still be around as a consultant when they need me. And if there's a relational thing that needs to be that I need to insinuate myself into, but in the end, you know, for us, right now, we're looking to find a broker to that would like to have the keys to the kingdom, because this agency is going to be transferred internally, to those people who step up and are capable of carrying those bills of water. And I'm excited for them. And I'm excited for me, because it means that I can perpetuate my legacy. Instead of just absorbed by a locked in or an aperture or somebody like that i i want our legacy to evolve and grow. And the way to do that is to bring others in and add them to the moniker. So agency isn't just Connery. But it may be it's Connery, Jones, Connery, Smith and Jones or whatever it happens to be. But I'm excited about the future. And I'm excited about you know, passing that torch, and I'm evolving my process to do it.
I bet you enjoy that mentoring piece. You know, it just seems to be a passion of yours. Right? You know,
I This isn't my first collab cast I've done or podcast, because I'll stand up at a convention and given the answer, and everybody will look and go who's asked, and, you know, where's he coming from? And but, you know, operationally I've been doing this for 35 years, I have the business go from, where it where it was to where it is. And I'm, although I'm frustrated, and I can't right now predict where it's going, because I don't know anybody that can and if you if you can, I'd like to be introduced to that crystal ball. I do know one thing, and that is that we're equipped to evolve. And we're open to evolving. And if you don't have a growth mindset, and there are two mindsets, there's a fixed mindset and a growth mindset. And if you don't understand this, Google it, read about it. Learn about it. If you don't possess a proper growth mindset, you will not learn to ask the right questions. You will not challenge yourself the right way. You will not look at Your operation and ask more questions. What you will do is sit on your laurels believing that you know everything. And that is the beginning of the death of your agency.
Yeah, yeah. Well said, yeah, it's agreed. As, as, as an agency principal, what what of what have been some of your biggest challenges.
So the most frustrating thing for me is a lack of predictability. When the market is unpredictable, when underwriters are unpredictable, when a claim on outcome is unpredictable, that is the biggest frustration for me. The other frustration is getting people to get it, you get hired into this agency, and you're taught very early on that this is a high level engagement that we're looking for you to not be a paper pusher or a processor, we're looking for you to be a protector. And to be a protector, you have to ask the client qualified, qualifying leading questions, you have to engage in the client in the right way. But what we have found is that most people just like processing, they like to push paper from one place to another. And they think that they're adding great value because they are really efficiently emailing. And I'm sorry, but you know, what I'm looking for is client engagement. What does that what does that conversation sound like? What questions did you ask and lead with? What kind of a follow up email? Did you write that? That was a diary to the experience and acts as both a validator to the to the customer of what it was that was said, but it also acts as a document are in the agency in case there's somebody that wants to re characterize what actually was said later, because it's more convenient. So agencies need to start, you know, we every call it our agency is recorded, and we play roulette. And we will go and listen to those recordings. And half the time I cringe I have to have a Scotch when I do it. Because I'm listening to this conversation, realizing that they didn't lead the way they needed to. They didn't ask the right questions. And so and, and or they were not picking up on things the client was saying, and I didn't realize that these were in a in me, because I'm old. And so I've recognized these things and evolve where others haven't. And now I'm struck, starting to figure out how to train to that, but it's not easy, because if it's not natural, you've got to, you've got to train to it. It's it's uncomfortable for folks. Yeah,
that's a perfect way to coach. So I mean, for you to go over real, I mean, of, of offering alternative, you know, thoughts, and and where you can collect more information, or whatever it is, that's a perfect way for you to get get in there. And as and if, you know, hopefully you have a team that is receptive to, you know, to that
job is to hire people that are Yeah, okay. I mean, what we do is we say, Look, we don't want you to forget everything that you know, but we kind of do it. If we say this is how we do it, it's how we do it. And we're totally open to doing it another way. But you will have to go through the process of vetting it and proving that the other way is better, more efficient. greater results. Again, more predictability. If that's the case, then we'll evolve our process to yours. But rarely does somebody come in with something that is so new and exciting. Maybe they could show us a trick and in how to use the management system in a new way that we always are open to learning. Because I think most agencies user management system as a as just a big data warehouse, and they would hardly use the technology in the way that they could leverage it and use it and for the money that they're spending on these systems. Me, I spend enough to hire somebody, you better get something out of it. And to do that you've got to invest the time and energy in what does this report look like? And what does it take to create that report? And what data goes into that report? And is that data accurate everywhere? And if it isn't, and isn't consistent, then you don't have the roadmap that you need to drive your business. I am a business owner. I'm a businessman. I read my reports. I am constantly evaluating things based on data and I'm also an open book at our monthly meeting. We share financials. Yeah. I mean, I want them to understand where we're going and what we're trying to accomplish and How do you do that if it's in a vacuum, so when the numbers aren't looking the way they're supposed to, I share them when the numbers are looking the way they're supposed to I share them, I let them see their success, and I let them see their failures. And that way we can all as a group and as a team evolve? Well,
by sharing it also, it gives the team a better idea of what the what the mission is, and then helps them understand this is why we do things to what's
the impact, right? What is the initial impact of doing it or not doing it the way that you've been? Asked to? Yeah, I think you're right.
Last question before, before we let you go. What would you like to see the Connery insurance improve on for 2024.
So 2023 has been a fairly flat year. Yeah, because of the having the wrong people in place in late 21. And 22. The impact was a an attrition rate higher than it's ever been. And it sends a very clear message, it was all house business. It was all small commercial. It was not large accounts. And it was not on relational accounts, every producer grew by 11 to 15%. But the house lost 16 For the first time ever. And that's measured properly. Where we average about a 7% return attrition, a 92 to 3%. Retention, the winning attrition got to 16% It got my attention. And we also do what we call a rolling 12. And instead of looking at my numbers, year over year, month, by month, we looked at a 12 month, rolling year over year. So I see the impact of first quarter and second quarter 23 being terrible, and third quarter balancing it out. And now fourth quarter growing and making up for a big part of first and second quarters. losses. And you start to realize that you're now on a trend. So if you start that rolling 12 months at July, we're on an 18% growth rate, you follow what I'm saying? Yeah, if you aren't paying attention, you think you're that that the actions that you're taking aren't effective, because it's not impacting the numbers as quickly as you need them to, but they are you're just not measuring them the right way. So for 2024, our focus is going to be first of all, we've decided that we're going to serve as center, all the small accountants as an orphan commercial business, because if we don't have a relationship, we think that the service center can actually do it more economically than we can, too, we're going to all producers in my agency now have to be industry specialists. So they I'm the last generalist in the agency, everybody else, it has to choose an industry and then become an expert in it and be known by it. And we will help them do that through relationships with things like the trade associations and whatnot. But we'll we'll figure out how to keep their name relevant. But 2024 is going to be about us evolving to a truly middle market environment where its upper, upper small, commercial, and lower, large commercial businesses are between 10 and 50 million in revenue will be the focus, at least for finding new accounts. And that is, that's going to be a huge boon in profit for us, it's also going to help my producers get to the quarter million dollar commission level as fast as possible. My most recent one got to a quarter million from zero to a quarter million in in personal income in five years. Now, I want it to happen in four. And so when you start to get to being able to promise people that kind of an income, you know, and he said now, all he has to do is continue to do what he's doing. But the you know, I again, I have to transition this business, if anybody out there is listening and they're they want to talk to me they should, because the truth is, is that, you know, if you're in a larger agency, a principle that only 20% can still is still a principle. Yet they can focus on the area that they're very, very good, whether it's marketing, whether it's sales, is people management, whether it's whether it is finance, we figure out what their strength is and they contribute that portion of ownership responsibility. And it's amazing how you don't have to be a me anymore. You don't have to be somebody that is a jack of all trades. And you can, you can instead be what you really want it to be an owner that is also a relational producer and a consultant, salesperson in the world of insurance. And that is exactly the opportunity. And so that's what's going to happen in 24, we're going to position ourselves, we're going to start to recruit define the future owner for the agency, and then we're going to move them from zero to owning it, and perpetuating it internally. And it will happen because it's my absolute desire to do it. And frankly, I don't want to sell and get a big check one day, I'd rather have a residual income right into my future. And finance, the purchase of the agency is just like residual income. Yeah.
I love it. Now, this, this has been great. That's, that's a big 24. And I would say, That's a hell of an offer offer for for people and should draw a lot of interest. It's very, very attractive.
I've talked to people, it's amazing how I talk to people, and they're there, these one man bands and, and they just, they're so committed to growing it themselves, that they don't see the opportunity, that that all the things that they're doing, they could do within the organization, but then they have all the support, they need to continue to grow. You know, it's one thing to be an owner of something and have two employees or three employees and, and versus the a partial owner of something that has 16 or 18 employees to support you. Yeah, it's amazing how that would evolve and change. But until you've experienced it, you don't know it. And and frankly, there's probably a lot of people who have heard horror stories of people being promised stuff and it not being delivered. But if there's one thing that Jerry Connery has a reputation of is doing what He says He will. And and we'll put it in writing, because in the end, I wouldn't do it either if it wasn't in writing, so why would I ask somebody to do something I wouldn't do myself, I won't. And that's part of why I think I've been successful. But I have to tell you, for any of you that are feeling totally frustrated with 23, like pulling out your hair, like wondering why you ever chose this, or, or maybe like you, Brad, maybe I want to go back to working for somebody else, you know, don't use this year. No, that's your as your as what you measure it by its, it's in great flux and transition. Most of it was created through the great resignation and 21 and 22. It's amazing the impact of COVID. And what it did to our industry, that coupled with hyperinflation coupled with legislate legislatures that fail to act progressively in the world of prevention of loss, these things have to change. The states need to equal E to even the use of courts, because some have weaponized courts. And it's wrong, you know, a little poor little business owner getting sued by somebody because they didn't have their website on capable of being used by a blind person's reader. Yeah, a lot of folks don't even know that such technology exists further to that most people don't realize that it's almost free to do and it's it's not costly at all. And yet I have a little restaurant tour, one of the most successful business owners, as far as sales per square foot. I don't think there's a restaurant in Orange County that can touch it. And, and right now he's being embattled by an attorney that's filed 750 of these kinds of lawsuits representing somebody who claims and you know what they're doing, they're just running around looking at websites so they could find one. In fact, the lawsuit had so many errors in it, because the guy he's doing it so prolifically that he doesn't even correct the name or the type of business or all the things that are specific in a lawsuit. He just puts a new name slapped. It's amazing to me that our legislature can allow something like this. It's amazing to me that our courts don't sanction people like this. And it's amazing to me that they would be so one sided that they would that they would think that the one poor, disabled person that was put out by some business owners decision that that would equate to creating a what they call paga, the state of California which is where it any attorney can act as a prosecutor. It's amazing to me, and the the impact of it has been that all it's done is make charlatan attorneys wealthier, being a leech on business. So for somebody like me, I see this, I help them solve that problem. If you're a broker and you're not asking if this these things are there, you're going to run into these problems and all I could suggest is that we just start to listen and look at what's happening and evolve your process a little bit every year. And it's amazing how it will keep you relevant. And it will keep you in the know. And it will differentiate you from everybody else. And isn't that exactly what we need to do? Yeah.
100% Yeah, we need to evolve. We need to adapt 100% Those that those that do will survive.
Well, Brad, thank you for your time. I appreciate it. It was fun getting on here and talking. I hope we went where you
want it to go. Absolutely. It's been a joy. You're you are I mean, I feel like you are a professor. That's what I feel like a VR professor of this industry. It's beautiful. I'm super excited. I know our audience is going to enjoy it. So thank you for your time. You're very welcome. Yeah. Everyone else. Thank you for listening to another episode of the atheist owners podcast. We'll see you next week. Bye. All right.