Tackling the odds and coming out on top
South Carolina agent proves that a brand-new agency can succeed in the coastal property market
If you’ve seen the movie Jerry Maguire, you were probably a bit nervous when Jerry (played by Tom Cruise) walked away from his high-profile job at a prestigious sports agency. During one sleepless night, Jerry, a slick, high-living sports agent, had a revelation: he wanted to live a more ethical, fulfilling life. He wasn’t getting that from his current job. He could no longer tolerate the shallowness of his employer. So he took his goldfish and one lone accountant and walked away from the agency to start his own business.
Todd Tyler can relate. It may have been a different industry, but the scenario is certainly comparable. When Tyler left his steady, secure job with a respected insurance agency and started his own company three years ago, he used the movie as his inspiration and motivation.
His peers discouraged him. They said his agency would never get off the ground, that he would never make it. It’s a good thing he didn’t listen to them. Actually, that negativity didn’t hinder him at all. In fact, it fueled his fire. He was determined to succeed.
Tyler previously worked for a commercial real estate firm handling its partnerships’ insurance and taxes. That was when he discovered the property insurance business and fell in love with it. He joined the ranks as an agent in early 1995. From that point, he knew the insurance industry was going to make him a success. But there was one thing he felt the industry lacked: technology. So in February 1997, Tyler started The Commonwealth in hopes of attacking the industry with enthusiasm and technology.
Today, The Commonwealth is one of the fastest-growing insurance brokerage firms in the nation. The agency, which is headquartered in Charleston, South Carolina, specializes in commercial property and casualty insurance and group health insurance. Eighty percent of the agency’s business comes from commercial property and casualty; 14% comes from group health insurance; and 6% comes from personal property and casualty In 1999 alone, commission revenues were $690,000. The Commonwealth boasts such carrier contracts as Ohio Casualty Group, Zurich, BlueCross/BlueShield and Harleysville, to name a few. It has three offices in South Carolina and one in Tennessee. Dubbing it a booming business would be an understatement. But in the early days, this wasn’t the case.
Once upon a time
Todd Tyler didn’t think it was going to work out in the beginning. He had a difficult time attracting insurance carriers. Sales from health insurance paid the rent and other office expenses. “For the first three months, it was lonely and scary,” says Tyler, president of The Commonwealth. “My only employee was my office manager, Ann Vaughan.” He and Vaughn spent the majority of their time setting up the office and attempting to get clients.
“Thank goodness I had Ann,” Tyler says. “She was my lifesaver. She believed in me from the start. She knew we could get this agency up and running.”
Lifesaver indeed. Vaughan stood by Tyler’s side, supporting him even before the agency had any clients. “Ann was right there with me, making cold calls to insurance carriers. I never could have made it without her.”
Nine months after Tyler opened The Commonwealth, Brooks Jenkins came on board as a producer/partner. “Brooks was instrumental in helping us achieve profitability and growth,” says Tyler.
In a short period of time, Tyler snagged his first carrier, Ohio Casualty Group. Soon after, Zurich followed suit, then Harleysville. From that point, it was smoother sailing.
The odds were against him
With opening a brand-new agency come major obstacles. Recruiting the right people to work for you is one, but it wasn’t one of Tyler’s main concerns. He was told that opening an agency in a coastal community would never work. There are not enough property markets. It’s a bad idea. Give up the dream. Ironic that all the discouragement came from would-be competitors. “My idea wasn’t wellreceived because I was young and aggressive. I’m a highly competitive person. I had the will to succeed, and I think my competitors knew it.”
All it took was a little hard work and persistence. It wasn’t out of the ordinary for Tyler to make some 50 phone calls to prospective carriers or write several letters in order to land an account. “I had to show them that I was interested and was serious about handling their insurance programs.” Obviously his tactics worked with the insurance carriers. The Commonwealth acquired numerous markets and today has more than most of its local competitors.
Where did this persistence come from? Tyler said he was greatly influenced by his father and, later, his father-in-law “I inherited my strong work ethics from my father,” he says. While Todd was growing up, his father spent long days working on a tobacco farm in North Carolina. “He instilled his `farm boy’ ethics in me,” Tyler says. Now it’s not unusual for Tyler to be at the office at 6 a.m. and put in a 60-hour workweek.
“My persistence stemmed from my father-in-law, Jay,” says Tyler. “When I was getting started, he taught me how to cold call. He’s definitely been my role model and is an incredible influence in my life. He used to say to me, `Think of the number of people you know. Now think of the number you don’t. Which number is bigger?’ That really opened my eyes. I still believe in that philosophy.”
Cold calling-the oldest trick in the book
Tyler believes that cold calling is the number one way to prospect. “I require my producers to make 50 cold calls per week in order to receive their commission checks,” he says. A little excessive? Some might think so. Tyler says it’s the best way to build clientele.
When he first implemented the 50 calls per week requirement, it was met with some resistance. “At first, my producers thought I was micromanaging,” Tyler says, “but then they realized that some stockbrokers have to make 500 cold calls per week, and 50 didn’t seem like that big of a deal. Now it’s second nature to them.”
It’s not as though Tyler isn’t on the phone right along with them. Quite the contrary. He makes just as many, if not more, cold calls as the other producers do. His tactics are simple. When he calls prospective carriers, he has a great opening line: “Hi. This is Todd Tyler with The Commonwealth. May I speak to the person who handles your insurance headaches?” That usually warrants a chuckle. “If I’m friendly and add a little humor, people are going to be more receptive to what I have to say”
Tyler believes that the Internet will change the insurance industry. Maybe it’s because he’s young and it’s the way of his generation. Or maybe it’s because in this technology-driven world, the Internet affects virtually every business. “The question isn’t ‘Will the Internet change the insurance business,”‘ says Tyler. “The question is `When and how much?’ I want to be on the front of the wave of change so I can garner marketshare. If I’m not, then I’ll wake up 10 years from now and be out of business because I failed to act.”
Tyler says that some insurance agency owners aren’t aware of the Internet’s significance. They don’t realize its power. Recently, an agency owner told him that it might be important in five or six years, but not now “I look at it like this,” says Tyler. “In five or six years, my company will be five times larger because I already utilize the Internet.”
Actually, Tyler is way ahead of the game. He recently developed a Web site that acts as an online workers compensation quoting engine. The Web site (www.cheapworkerscomp.com) helps businesses procure instant workers comp quotes. It allows them to compare their current workers compensation policy rates and to request coverage online. The program performs the majority of the underwriting process and determines the carrier that will best fit the insured’s needs. “The Web site allows customers to log on, answer some basic questions and obtain a quote in less than five minutes,” says Tyler. The Web site is continually being refined, but Tyler thinks it’s a unique marketing idea.
Besides the fact that he’s aggressive, competitive and technologically advanced, what’s the key to his success? “I believe in a meritocracy-people who produce and get results reap the rewards,” maintains Tyler. “I expect everyone to always give 110%. And because I expect a lot out of my producers, I try to pay them with higher-than-industry average commission splits and to reward them with sales incentive trips.”
What does the future hold for this aggressive over-achiever? Tyler, named South Carolina’s Young Agent of the Year in 1999, plans to land contracts with some more prestigious carriers. He’s already working diligently on attracting one of the nation’s major carriers. “This file is three years old,” says Tyler. “I’ve probably made more than 100 phone calls. I have a great relationship with the head of the company. I fully believe I will eventually get this contract.”
It’s hard work and determination like this that makes Todd Tyler who he is today But he’s extremely modest about his success. “Anyone can do what I’ve done,” he says. “As long as you have the motivation, dedication and determination, you can succeed.”
He believes that the insurance industry is wide open for young people. He makes it a point to recruit young people into his company. The Commonwealth currently has four producers under the age of 35, and it is hiring a 21-year-old later this month. “I am amazed that industry representatives complain about the lack of young blood in the agency system.”
Tyler believes that the insurance industry is a lucrative business. He was lured into it several years ago, and has been attracted ever since. He’s very successful, so it’s doubtful he’ll be leaving the industry anytime soon. “Ultimately I want to make money,” he says, “but I want to have fun too.” He must be having the time of his life.
Copyright Rough Notes Co., Inc. May 2000
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