Rick Bauman - Founder of The Broker Performance Group and The Vertical Growth Network

Insurance guru offers valuable insight – and 7 steps to a passionate enterprise

Insurance broker by background and entrepreneur at heart, Rick Bauman founded The Vertical Growth Network, an exclusive coaching program for high-performance insurance brokers across Canada – and then later on went to found The Broker Performance Group, an organization that analyzes brokerage and customer performance data and facilitates semi-annual ‘Performance Summits’ for members.

What are other agents & brokers doing to thrive? What are the biggest trends affecting the retail insurance agent & broker? What are the most important strategies and tactics you need to grow faster?  Find out here in the Connected Insurance Podcast, where Michael Jans discusses the biggest issues affecting the independent insurance agent and broker with the industries leading figures.

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[Transcript] Rick Bauman Founder of the Broker Performance Group and the Vertical Growth Network

Michael Jans: Hello everybody, this is Michael Jans with Agency Revolution. We make it easy to automate your systems, engage your customers and to grow your agency or brokerage. I want to welcome you to this episode of the Connected Insurance Podcast, where we examine the trends, innovations, challenges, and solutions to the biggest problems facing retail agents and brokers.

I am thrilled to introduce you to our guest today my friend, Rick Bauman. Rick is an entrepreneur and insurance broker by background. He was the founder of the Vertical Growth Network, an exclusive coaching program for high-performance insurance brokers across Canada. He then went on to create the Broker-Performance Group in 2011. His team gathers in-depth detailed information from his client member participants, including financial performance, employee engagement, and client engagement.

He facilitates a semi-annual performance summit for their members to share best practices and to benefit from his coaching. This is where I originally met Rick, I had the opportunity to keynote or to address his group and I can assure you they are high performers and they are very, very well led by Rick’s leadership.

Prior to his coaching and training experience, he operated a successful insurance brokerage himself in Ontario for 20 years achieving a 27% compound annual growth, 32% operating profit, a higher than 90% client loyalty rating, and then 86% employee satisfaction. Rick is one of those that I think everybody should listen to. He understands the strategy and tactics of organic growth and agency or brokerage management as well as the best. It’s my honor to introduce you to my friend, Rick Bauman.

Rick Bauman: I’m just great Michael, thank you. Great to be here.

Michael: It really is our privilege. I do realize that Rick, most of the work that you do is with Canadian brokers but you’ve done work on both sides of the border and frankly your knowledge and observation of the industry is as astute as anybody I know, so I’m excited about what you have to share.

Rick: Well, thank you very much.

Michael: If we can take a moment. Let’s take a minute Rick and I will ask you to tell us what it is that you do and who your practice serves.

Rick: I coach independent charts brokers from across Canada. We have an organization called the Broker Performance Group. We gather them together twice a year and share with them metrics, performance metrics that we’ve gathered on their behalf and facilitate a sharing of best practices amongst them. We give them coaching support in addition to that.

Michael: Okay. Well, we have shared clients, clients who are in your group and they have nothing but terrific things to say. I’ve been to one of your meetings and I felt that it was one of the tightest most content field meetings that I’ve been to in the industry. I applaud what it is that you’re doing.

Rick: Thank you very much.

Michael: Rick, you’ve got brokers all across the country participating in your program,-

Rick: We do.

Michael: – what are you seeing in the broker channel these days? What do you see going on out there? In particular, what do you think is different these days than it was before?

Rick: Well, we’ve talked for years about the rate of change but I think [chuckle] it’s really, really happening now. I think the level and scope of change is unprecedented. I see a sharper division now Michael between the legacy brokers who are clinging to the way they’ve always done things and have been very successful methods for them up to this point in time and the brokers that I think really get it and are going to be brokers of the future. I see this speed of change increasing. It’s a bit blinding actually but somebody many years ago told me that the Chinese word for change is two characters, one that represents opportunity and the other that represents threat.

I’m now told that’s not actually correct which is too bad [laughs] because it’s really handy metaphor but hey, that the bottom line is, with every change comes opportunity and threat. I personally choose to believe it’s the time of tremendous opportunity for brokers.

Michael: What do you think are the drivers that are forcing that accelerated change?

Rick: Well, I think the consumer, the insurance carriers, the consumer appetite is changing. We’re seeing the shift in the makeup of the population, the millennials are becoming more of a force and what they demand and expect is above and beyond historically what we’ve had to do. I think in a lot of ways brokers today aren’t really competing with each other like they’re competing with the expectations that have been created in the consumer by people like Amazon, and Costco, and other organizations that are superb marketers.

I think the stakes are high, the companies are driving change because of their appetite for growth and trying to put their capital to use. New players are coming in the market, driving it. The disruptors are around. I guess it’s safe to say the whole world is going through a rate of change that we haven’t seen.

Michael: I was in Toronto just a few weeks ago and there was a lot of conversation among brokers about the disruptors. It seemed that some of those so-called disruptors are coming from traditional friends.

Rick: Yes.

Michael: Right?


Rick: I would agree with that.

Michael: Okay. Maybe without naming names, there’s a new emerging technology that’s funded by a major carrier and there seems to be some consternation among brokers about that.

Rick: For sure. I think the disruptor, as you’ve said, astutely are both inside the camp and outside the camp. A lot of discussion is focused on those that are outside the camp but we have to watch the ones that are inside. Now, that’s maybe not such bad news because if they’re members of the club, if you will, then we have some hope they’ll play by the same rules. Disruptors coming into a new industry where they have no equity, they have no stake, they have no brand, nothing to lose, they can play rough and we all know what happened with Uber when they invaded the New York city taxi business. We saw what happened to the value of New York taxi medallion. Three years ago was worth $1.3 million. Today it’s, I understand you’re lucky if you can get $250,000.

Michael: Ouch, yes. Okay.

Rick: We haven’t seen that level of disruptor in the broker channel as yet, but if it were to happen, that’s certainly the doomsday scenario. We hope that never comes.

Michael: Well, nonetheless, you’re saying that you do see this as a time of great opportunities for brokers, tell us a little bit about that.

Rick: Well, for sure. I think that the opportunity is to grasp what has changed, to accept the fact the game has changed, and is never going to be the same as it was, and to get on with building a new brokerage. That may mean digital presence if you’re a personalized brokerage or small commercial because we’re seeing successful plays in the small commercial marketplace now online, and mid-market, or larger corporate commercial, we see the brokers that really get it, embracing a challenger sale kind of model, if you will, where they’re playing a different role.

They’re not seeing themselves as little men in the provision of insurance policies, they’re seeing themselves as advisers and being knowledgeable in the industry of their clients and not so much looking for problems to solve but challenging their prospects and clients. Are they addressing the issues that the broker knows are pressing issues in their given industry? That’s turning the commercial fails world upside down, I think.

Michael: Let me see if I understand this right. About an hour ago, Rick I had a conversation with a client of mine who saw a presentation by one of the most successful brokers in the United States. This was a conversation at our boot camp and it was probably at least three years ago but it still sticks with him. What this agent said was, “The key to success as an insurance agent is to no longer be an insurance agent.” In other words, he was really calling on people to deliver more, to deliver ongoing value, and to create deep relationships, and to generally solve problems for them and be in a genuine relationship with people.

That clearly, that’s different than simply brokering the insurance and perhaps with small commercial lines or personal lines, being in touch with them once a year when you want the premium again or you want to renew it, or with maybe the middle market periodically staying in touch just to make sure that you’re safe. Is that what you’re suggesting, is that the role of the broker needs to be more or as the consumer gets more choices, they’ll choose those other choices?

Rick: Well, the consumer owns the consumer of course. It always makes me smile when I hear an argument between a producer and a servicer or a broker and a company arguing about who owns —

Michael: Who owns it, okay.

Rick: Yes, the customer owns the customer.

Michael: [laughs] Right.

Rick: They vote with their wallets. I think that surveys that I see and personal observations are the only reason that more clients are not demanding more from their brokers is because they maybe thinking that what they’re getting is all they can get. As soon as a client is made aware of the different kind of relationship, a more value based relationship, not a transaction based, I think they want it. The biggest challenge that I see is getting producers and brokers to look at the world that way.

Michael: Music —

Rick: Try to look at it through the eyes of the customer.

Michael: That’s music to my ears. I’m going to ask you the flip side of the opportunity question. What do you see is the biggest challenges that could prevent agents and brokers from seizing this opportunity?

Rick: Well, I think externally, we’ve talked about the disruptors. We used to talk a lot about the direct channel being a threat. I don’t think the direct channel, certainly in Canada, is not the threat that it was. They have successfully eroded the market share of brokers but I think things have flattened out in that respect. There’s a threat that I see to brokers that I’m probably going to get some heat for mentioning this [laughs] and that’s the topic of commission cuts.

Insurance companies have developed robust capabilities around what they call procurement and that’s squeezing the entire value chain. They’ve done it to collision repair shops and organizations like that but we haven’t seen that gun fired at brokers yet. That can’t be because they haven’t thought of it.

I believe that somewhere on the horizon, there’s going to be some pressure on broker commissions. We heard recently some passing comment by a senior insurance company executive at a broker conference and then there was some mention in the industry press about disbanding the use of agents altogether in a pacific rim market area by one insurer. I suspect that there’s going to be some threats on that front.

Michael: Okay. That’s one that I don’t like to hear because I think — I’m not expecting to change any carrier’s opinion on this one Rick, but I think that if in fact the strength of the broker channel is the broker, then we don’t want to weaken that part of the value proposition.

Rick: Well, for sure. The opportunity is there for the broker to turn up the heat on delivering value. I think there are a significant number of brokers who are doing just that.

Michael: I think you’re right. I know for a fact that because of your focus, your clients are doing that, so I applaud that. If there was one thing and just one thing that a broker needs to do to succeed today, what do you think that is?

Rick: Well, I think the label I’d put on it Michael is to develop their own ultimate competitive advantage. What I mean by that is I think the ultimate differentiator in the marketplace is going to be the experience that the consumer has interacting with the broker.

Michael: Aha.

Rick: If we want the client to have a superb experience, then it’s got to be because the members of the team of the brokerage are excited about their work. They look forward to coming to work everyday, they believe what they do makes a difference and is important, and they have a passion for it. I think the ultimate competitive advantage in my eyes is not a product or a technology but it’s people. The title we use is build a passion, not an enterprise.

Michael: Love to hear that. How does a broker go about doing that today?

Rick: It’s a simple but difficult process. [chuckle]

Michael: Okay.


Rick: There are seven steps in it, I think basically. I think brokers need to be really, really good at being brutally honest with themselves about their performance. They need to benchmark, they need to measure, they need to become very focused on key performance indicators and measuring the level of engagement of their employees, a level of engagement of their clients, their financial performance, and be as I say, brutally honest about what’s good and what’s not so good.

Secondly, I think there’s going to be a lot of change going on, a lot of change in management, skill is going to be required. When an organization is leading a process of change management, the values of the organization are going to be tested. There are going to be employees in the brokerage that are going to push back or take evasive action and the values of the organization I think are going to be tested. Well, I think being really clear about what the organization’s non-negotiables are is really important.

Third step is, I guess it was Vince Lombardi who said, “It’s hard to be aggressive if you’re confused.” I think that’s where having a clear vision comes into play. Brokers I think need to have a vision that’s not just an aspirational statement but has some numbers on it. How big are we going to be, how profitable, what’s our commission for employee going to be, and so on.

Then I think the next step is you’ve got to have a cohesive leadership team. What that means to me, is we got to have people in leadership roles in the brokerage who are passionate about being leaders. They’re not just being a leader because somebody had to do it, they’re doing it because they love it and they have a passion for coaching as well, about working together. Of course, they’ve got to have a plan and they’ve got to have performance management system. We use score cards as performance management tools to make sure that we follow through. Then there’s got to be rewards at the end of the rainbow and consequences for non-performance.

If we can follow those seven steps, I think we can build a passion at enterprise.

Michael: Excellent. By the way, I was furiously taking notes the entire time, so I appreciate that.

Rick: [laughs]

Michael: If I was going to ask you to share some final words of wisdom to the people that are listening, what would you say?

Rick: Well, I would say, beware of the cleaning lady syndrome. What I mean by that is the time of big opportunities and big challenge, and if a broker thinks they need some help to get that done, either in terms of adding new people to their team or bringing in an outside adviser, don’t fall into this syndrome of the cleaning lady and that is saying, “Well, we’re going to bring some additional resources in here but I’ve got to get a few things cleaned up first.” That’s what the new people will do, is help you with the clean up. Don’t wait until everything’s perfect before you bolster the resources of the brokerage, go for it.

Michael: Nice to hear that. If somebody who’s listening wants to know more about Rick Bauman and what you do, how would they do that?

Rick: They can email me at Rick, [email protected], or they can go to our website, www.ic3.ca.

Michael: Got it. All right and of course, everybody you can always reach out to me and I’ll put you in touch with Rick.

Rick, thank you so much. Thank you for the work that you do. I happen to know that your clients are thrilled with you, at least the ones that I talked to. Congratulations on that. As always, if there’s anything we can do to help you, let us know.

Rick: Thank you, Michael. Thanks for all you do to give brokers silver bullets for their guns.

Michael: [laughs] Okay, thank you so much.

Rick: You’re very welcome.

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