A New York State of mind

A New York State of mind

Hanavan, Brett

Young agent T.J. Derella has his game face on, most of the time

Derella’s dad was a role model-just like many dads. He happened to work in the insurance business. At first-just like many sons-young TJ. didn’t want to follow exactly in dad’s footsteps.

Today T.J. divides his time between the love of his insurance career and his wife and children. That’s okay. His family comes first. His career is an important second priority.

T.J., who was born Thomas J. Derella, was educated at Bronx’s Fordham University, graduating in 1987 with a liberal arts degree in political science.

Then-Derella went to work for Equitable as a sales representative, moving to Colonial Cooperative in 1988. Colonial, along with its entities, is a small, regional insurance company. During his early years with Colonial, “I did everything from shoveling snow to paying $400,000 claims for them,” Derella says. He stayed with the Colonial until 2000, working in various management roles. These roles included commercial and personal lines underwriter, marketing manager, underwriting and marketing manager, and finally vice president of insurance operations.

Today at age 35, Derella runs his own managing general agent and wholesale company, Kingstar Companies, which he started in November 2000. Based in Kingston, New York, Kingstar writes mostly commercial lines business and represents AIG, U.S. Liability, Fairfield, Republic Western and Lancer, as well as other companies.

“Now my agency employs five people, and my primary job is to keep our retail production sources, which is about 200 brokers, happy from both a product and customer-service point of view,” Derella says. “Additionally, I am responsible for adding new companies to our product portfolio and looking for ‘niche’ products that can help the producer base– especially during the recent hardening of the New York insurance marketplace.”

Derella expects Kingstar Company to write $4 million to $5 million in commercial business in 2001.

Kingstar’s operating objective is to provide a broad spectrum of sound insurance products, with stable pricing, while maintaining high levels of service to its brokers and policyholders. It emphasizes building long-term relationships with clients, brokers, and carriers. The five employees that currently make up Kingstar have all worked together on the company/managing general agent side of the business for several years. Kingstar’s targets are smaller to medium-sized risks located in New York, New Jersey, Connecticut, and Pennsylvania. Typically these mostly “underserved” markets are at the lower end of the premium spectrum. And as Derella adds, they “subsequently, have not been given the proper level of attention that they deserve from their carrier or managing general agency.”

Kingstar’s management identified a market segment that consists of predominantly mercantile (retail and wholesale operations) service companies, hospitality companies, and artisan contractors. A typical customer is categorized as entrepreneurial in nature, employing a few people that the owner has typically known for a long period of time. Often this is a family business or the entrepreneur is self-employed.

The most frequently purchased coverage through Kingstar for these risks is either a commercial package policy (CPP), or a business owners policy (BOP). Derella often rounds out the package to this target with professional liability, employment practices liability, commercial automobile, inland marine, workers compensation, commercial umbrella and/or an equipment floater.

Derella’s aspirations are driven by his background and family heritage. His father, who was a life insurance general agent for Guardian Life Insurance Company, thought insurance would be a good place for his son to start a career.

“Unfortunately, my dad passed away during my first year in the business, so he never got to see what I have achieved in my career. Fortunately, my mother did,” TJ. says.

Speaking of his move into the insurance field, TJ. observes: “I knew early on that this business was the right one for me. It allowed me to be creative and use common sense to my advantage. It also allowed me to use my energy to create something of value for other people. I learned insurance was a career choice to be proud of”

Early in his career, Derella quickly came to understand the value of involvement with insurance trade associations. The networking and knowledge they provided would take him far. Derella said the associations at first were a way to meet people with similar career paths and create professional relationships. After joining the Young Insurance Professional Network (YIPN), he discovered that it helped him to learn from other young professionals and to share his successes and failures with people who were sharing similar experiences.

He went on to serve as YIPN’s president and acted as the Tri-State (Connecticut, New Jersey, and New York) chairperson before moving on to the Professional Insurance Agents (PIA) of New York Board of Directors. Today he serves on the PIANY Executive Committee and chairs the Industry Liaison committee.

“I consider the friends and contacts I made through both organizations the most important and enduring relationships I have in this business,” Derella says.

Last year Derella was presented with the “Insurance Executive of the Year,” award from the PIA of New York.

“This is a tremendous honor, especially from the perspective that I was only 34 at the time. It is not often that a younger professional receives such an accolade,” Derella said. “I was very honored to be the recipient.”

Derella says that the biggest challenge facing young people in the insurance business today is finding someone to serve as a mentor or role model-helping start the young person on the path toward a successful and prosperous career. “We need to find people who can help us find a balance between our professional and personal lives. Often wisdom is gained from those who have already experienced the situations we face.”

Building a solid career on a foundation of networking, mentoring, and a positive attitude, Derella is a model of success. He believes the single most important factor in achieving success today is customer service. “People expect things better and faster than ever before; and if an agent or underwriter can’t provide it for them, they will find someone else who will. I remember working early on in my career with an underwriter whose customer service philosophy was: `This would be a great business if it weren’t for those darn agents calling all of the time! That underwriter obviously didn’t last very long in this business.”

Derella credits several mentors for contributing to his success. They have ranged from his largest client to senior executives at insurance companies to soccer coaches. All of these mentors, he says, had one common theme that he extracted from their wisdom and teachings. That was that a team could always outperform an individual.

“To me this means that if you subjugate yourself to the team, the outcome will be better. I try to live and work this way every day,” Derella says.

And, for Derella and his career and life, new challenges and keeping a fresh face and outlook on the business world and the property/casualty industry is something he takes pride in. He says the Internet has changed the business world and those who do business in it in so many ways that it “deserves a written article all by itself.”

“I regularly check on Yahoo! for press releases about my carriers,” Derella stated. “It seems like things that used to take days or months to find out about, people know in minutes. We are online with most of our companies and find that although the fax continues to be a big part of the workflow, e-mail is becoming the communication tool of choice. I regularly use e-mail to market our products to our producers. I might e-mail producers three or four times a week about a new product, and the impact is almost immediate. E-mails tend to be read more quickly and cost less money to produce than a traditional fax blast or mailer.”

In fact the dynamics of e-mail and written communication allowed for this interview to be conducted in the fascinating forum of the e-interview– a new concept journalists are sometimes leaning toward. Personal telephone calls are still important in journalism and in business, but the dynamics of e-mail encourage precise and quick thought.

As in tune as Derella is with virtues of the Internet and the necessity of customer service, he also must be in tune with the barometer of the New York insurance market. He says that, as he sees it, the current primary problem is in the contractor’s marketplace. New York’s labor laws and their absolute liability provisions make it difficult for insurance companies and producers to make money by insuring contractors.

“This market has become very hard in a short period of time and customers are really paying the price,” Derella says. “We’ve seen rates go from $800 to $5,000 in just six months.

“The other underserved market in New York is in the Asian community. Chinese and Korean insureds make terrific clients, but traditional insurance markets have long overlooked this market segment.”

The good news for this market is that Kingstar has expertise in both these areas, and it is working to build and maintain excellent markets to help producers who need help placing this business.

In the long-run, Derella’s advice to young professionals is two-fold:

“Your reputation is all that you have, so never compromise it because it is almost impossible to recover if you lose it,” Derella said. “The other piece of advice is to be proud of what we insurance professionals do. When people ask me what I do, I say, ‘I sell insurance.’ Unfortunately, people equate this with less reputable professions, and I always respond by reminding people, `Do you remember when you had that fire at your house?’ Or, `Do you remember when that deer ran in front of your car? Or, `Thank goodness your dad purchased that life insurance policy to protect the family.”‘

Derella concludes, “We get to see the direct results of helping customers in their time of need. If that’s not rewarding, then I don’t know what is.”

Copyright Rough Notes Co., Inc. May 2001

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