tions Help Parker, Smith & Feek Shine
advisor not just in risk management—but
in other strategic organizational and management issues as well.”
CORE VALUES & CONTINGENT COMMISSIONS
One major reason for the firm’s success,
says Collins, is that “our business operations are always in alignment with our core
values”—and these values empower every
employee to do what they need to do for
the firm’s clients in solving their issues.
One example of how this philosophy
has benefited the firm is how it escaped unscathed from the contingency-fee scandal
that rocked the industry in 2004.
Then-New York Attorney General Eliot
Spitzer accused three major brokerage firms—
Aon, Marsh and Willis—of a bid-rigging and
kick-back scheme with a number of insurance
carriers. Brokers were accused of steering insurance contracts to individual carriers in exchange for lucrative contingent commissions.
Attorneys general in other states
launched their own investigations at the
time to determine if there were similar violations occurring at other brokerages.
But because PS&F producers receive salary instead of commissions, they had zero incentive to steer clients to any carrier except
those with the best coverage for their clients.
Indeed, the firm had to educate account
teams about its contingent arrangements so
they would be able to explain to clients how
the firm managed its carrier profit-sharing
agreements and illustrate how it had no
influence on producer’s recommendations.
This team-driven approach is an important part of how the firm handles clients and helps set PS&F apart. The teams
are organized around specific industries
(construction, marine, forest products, life
sciences, etc.) and are cross-disciplinary in
that they bring together producers with
technical specialists in commercial insurance, employee benefits and surety.
“Our clients become accounts of our
firm—not of an individual producer,” says
Collins. The advantage to that is when the
producer who secured the business moves
on, either from promotion or retirement,
the client remains. As proof that this approach works, PS&F maintains an average
retention rate of 96 percent.
Private Ownership, Assurex
Provide Notable Advantages
AS A PRIVATELY HELD brokerage with 185 employees, Parker Smith & Feek (PS&F) does not have the quarterly
profit pressures faced by its publicly traded
competitors—giving it, says Gregory Collins,
president and CEO of the firm, flexibility and
the ability to think in the long-term interests
of its clients.
For example, even though the economy
“has given us a real challenge,” Collins says,
PS&F has been “unwilling to reduce our staff
of talented, experienced professionals who
generate the very advice and counsel we see
as our number-one client-valued advantage.”
PS&F also benefits from membership in
Assurex Global, the Columbus, Ohio-based
brokerage network of international brokers
that he says gave the firm avenues to con-
tacts and advisors that have been instru-
mental to its continued growth.
SEEKS CLIENTS THAT CAN’T AFFORD
Not every prospect is a good business partner
for PS&F, Collins says. Clients seeking the
lowest price for their insurance placement do
not fit with the culture the firm promotes.
“We are not a good commodity broker,”
he says. “We work to lower the overall cost
of risk. What our clients say they have dis-
covered is that they are not in a position to
afford cheap insurance. Our culture simply
doesn’t support policy peddlers.”
The current soft market, Collins says,
has meant reduced insurance premiums
for everyone, giving clients “immediate,
potentially short-term solutions to reduc-
ing their costs.”
But Collins believes PS&F’s value propo-
sition comes from helping clients reduce
the cost of risk in any market and at a
strategic level. And it does this by establish-
ing long-term relationships with clients
and “continually exploring ways to reduce
their cost of risk.”
For example, “when the insurance mar-
ket is hard and rates are high, we help make
the tough decisions on limits or deductibles
in their coverage lines,” says Collins. The
aim is to give clients “the tools and guid-
October 3, 2011 | National Underwriter Property & Casualty | 13