Rick Fox, VP, Agency Associations and Networks, Vertafore
Rick Fox started his own agency from scratch and grew it to great heights before selling it in 2009 and entering the insurtech world. Today, Rick builds relationships with the insurance industry’s major associations and networks to bring the right technology to today’s independent agencies. Listen to this discussion with Rick Fox and Joel Zwicker to discover:
- What separates networks from associations
- Common traits among agencies on the rise
- What to consider when joining a network or association
It is estimated that more than 85% of agencies will be a member of a network by 2023. If you’re considering joining one, this conversation helps you understand how this relationship could benefit you and your agency.
Presented by Agency Revolution, the Connected Insurance Podcast provides weekly opportunities for listeners to dive deep into the trends affecting insurance agents and brokers today and to gain proven strategies and tactics for agency growth. Our hosts facilitate thoughtful panels and 1:1 conversations with a variety of prominent thought leaders, with a focus on how to streamline and drive operational efficiency for your independent agency through the intelligent use of technology.
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Transcript
Rick Fox
Joel Zwicker: Hey, Rick. Thanks for joining us. I know your time is valuable and I know you’ve got a ton of expertise in something that we get questions about here all the time and that’s associations and networks. You’ve got a long history in this industry. Tell us a little bit more about that.
Rick Fox: Joel, first, thanks for having me, man. I count you as one of the really good, good, solid people in this industry. I know you would bend over backwards for any independent agent out there. Before we go any farther, man, I appreciate you and I’m glad to be here and I’m glad we get to have this conversation.
Joel Zwicker: Thanks, Rick.
Rick Fox: Here’s kind of my quick reader’s digest version of my story. Back a long time ago, longer than I’m willing to mention I was an agency owner. I started my agency from scratch, independent agency and I started building the slow way, the grind way. Once I started to kind of get established and have a nice sized book of business, I started acquiring other agencies and actually acquired six more along the way and then made those all into one larger agency and exited back in 2009.
The beauty of that was I had no intention of selling my agency and I was just a call from a guy that I knew from one of the, I think it was a Safeco Golf Tournament that said, “Hey, I want to buy your agency.” I said, “Hey, I want to buy yours too.” [laughs] He had brought on a partner that was deep pockets and they were going to go big and they were looking to make some acquisitions.
So I threw out a fairly outlandish number. We laughed and joked and talked about our kids for a couple of minutes, got off the phone. He called me back two days later and said, “Done, that number you said done.” I was like, “Wait, wait, hold on. I should ask for more.” At that point, I was doing some other things. I was entrepreneuring in some other industries and the timing was right and I really wanted to get into tech as well at that point.
With my knowledge of insurance living in Seattle at the time and Vertafore’s headquarters was there, it was a very good match. I went to work for Vertafore as you very much know, I left Vertafore and went to Agency Revolution where you and I worked. I ran Agency Revolution for a while and set that company up for success and then exited there with that acquisition from FMG Suite. Stayed on for a bit and then had an opportunity to come back with what I’m doing now currently with Vertafore. Which is I run the networks and associations team here.
I believe this particular channel is so important to what our people are doing in this space, in the independent channel that this is the way we stay ahead of the curve. If you’re serious about growth and success in this industry and currently you’re not leveraging your relationships with either an association and or a network, I think you’re going to start feeling that pain in the upcoming years. I think everybody’s heading in that direction. In fact, Joel, a stat that I just read is by 2023, 85% plus of independent agents will be members of some version of a network.
I think that’s the direction of the industry. I believe in it and you know me well enough from our years together to know that I too am all about advocating and helping the independent agent. I think we have an opportunity with what I’m doing at Vertafore to push the independent channel to heights that we haven’t seen in a really long time.
Joel Zwicker: Rick, that’s a ton of information. I got a very important question to ask you right now.
Rick Fox: Yes.
Joel Zwicker: What’s the difference between an association and a network?
Rick Fox: A great question and some people don’t know. That’s a great question.
Joel Zwicker: I don’t know and I should know and I’m sure other people are asking like, “I’m asking the same, tell me.”
Rick Fox: Let me use the layperson version of how I describe it to people that don’t understand and then we’ll work from there. An association, to me, right now, this is stereotyping, it’s very generic. There are pieces of associations that are much more involved in this, but the best way to describe an association and the difference between that and network is that an association is like joining a health club, joining a gym.
You can use it when you want to. You go there and maybe you work out because there’s a racquetball or whatever you do. Sometimes you go a couple of months, you don’t do anything. That’s the generic version of what an association is. Now again, there are pieces of associations out there that do much, much more and act more like networks but a network by this definition is like going to see a personal trainer. It is very much more involved. You’re getting support from them. You’re part of something. You are setting up specific goals and using that person to make you the best you can be.
That’s the best way I can describe it in lay terms, but if I dig it a step deeper and bring it back to the insurance side the big associations, the big guy, PIA there’s IAOA think these other associations they do a really good job of providing coverage for things. I don’t mean insurance coverage, although that is part of it, but I mean where people might have holes like where do I get my ENO insurance?
I think a big topic right now, I don’t know if you’ve been talking about this, but is the shift from the captives that are becoming independence, like what Nationwide is doing right now. The association is a great place for you to go for those things. Some of them have good market access to get to market. You might not have appointments within your agency, but for the most part, you work with them. Again, generically you work with them at a level that is on your terms when you need them and you can use those kinds of things.
Full stop on associations. What’s the difference between that and a network. A network is a group of agencies that’s come together for different reasons. The main reason is market access. Usually, there is an opportunity there to bundle business or aggregate business in a way that’s going to help with your situation with a carrier. One is you might not have that access to, you’re either getting better programs with that carrier or you’re getting a bulked aggregated number that goes to that carrier for possible contingency bonuses and things like that.
They’re also good at things like relationships with vendors, relationships like a lot of them have with us at Vertafore. The relationships they have with companies like Agency Revolution. That comes in the way of great information, potential good pricing, access to certain people at the organization. Like whether that be their own personal customer service person, someone like myself or my team that’s able to answer questions at a level that might not just be as easily answered by the masses who are calling an 800 number.
Let me just back up. So you’ve got market access, you’ve got this access to vendor relationships, and what the good associates or networks are doing is they’re vetting the technology and things like that on the tech side prior to giving you recommendations. They do a really good job of not being vendor-specific. They’re very vendor agnostic, so they will come up with options for you.
The other thing that it does, it gives you what it is actually called, which is a network. It gives you the ability to network. It gets you in with other like-minded agencies to find out what best practices are, to find out what’s working, to find out what possibly you’re missing or something that could make your agency better. Inevitably it could be partners for mergers or acquisitions and things like that.
Then from the network itself, you’re getting support in a way that is, let me help you again, best practices. Are we looking at growth goals? They help with your planning for the next year? Because a lot of the networks can actually fire agencies. Now there’s some that the agencies actually own a piece of the networks that becomes a little more difficult. If you’re not pulling your weight, especially if these agencies are aggregating business to get better contingency bonuses, then they have the opportunity to say, “Yes. You’re on probation or you’re gone.”
The network is really more– it’s tight-knit, they work together and they really help agencies get to the next level. If you have niche marketing or you’re a medium-size agency and you need specific help in specific areas, whether that be through market access, whether that be through expertise or anything else, they lean heavily on their network to make their agencies run.
Joel Zwicker: I got a couple of questions here, Rick. One’s on a technology side and one’s on something you just said here. I’ll start there because it’s reasons. I’m an independent agent and I’m out there and I’m floating in the wind. Maybe I’m a captive going independent or I’ve just been independent for a long time looking to make some changes. Is there anything like red flags or something I should be worried about? Because something you said about, “Hey, I could be fired by this network.” Should I be scared of getting involved with a certain network as an independent or something I should watch for?
Rick Fox: Well, I would say start with what kind of an agency are you? If you’re a growth agency that has a certain level of business acumen and you are running a strong agency, you have no worries in the world. It’s the ones that are, and we know them, Joel, we’ve seen them around. It’s the lifestyle business that’s hanging on for the last few years before they sail off into the sunset. Network’s job is to grow and network’s job is to help you grow. If you become that 300% loss ratio agency with a growth of negative 14%, can you see where you might be on the chopping block a little bit?
Joel Zwicker: Yes, absolutely.
Rick Fox: No, it’s not a red flag, but I hope that the– I’m assuming just because I know what you do at Agency Revolution on this podcast because I was part of creating it that the people listening in are looking to get better and if you’re looking to get better, you have no red flag in the world, you should be talking to networks and finding the right fit and leveraging that to grow your book.
Joel Zwicker: Yes, absolutely. That’s on a revenue. On a technology side, like– and part of this is a little bit on my end playing the conversations that I have with Dan and Dope, but there’s a certain expectation on a technology side like you suggested that they do some vetting to provide rather than say, “Hey, there is all these options, maybe narrowed down for a couple,” but is there a certain level of expectation I should have as an agency, or maybe even on the network side to be able to provide good solutions? What’s the expectation on a technology side?
Rick Fox: Yes. when it comes to the tech side of the network, you’re looking at a few different things, let’s just start with the lifeblood of the agency which is the management system. There’s plenty of providers out there, there’s ourself and Applied which would be sort of looked at as the Coke and Pepsi of the management system world, but there’s other providers too that offer, depending on the agency, if it’s the small agency there’s specific systems to that, there might be more price effective.
We personally have a small agency system as well that’s the best on the market, of course, I’m drinking the Kool-Aid, but when it comes to the management system specifically, there’s not a ton of vetting that goes on, because everybody kind of knows. There might be a lien but at the network level, they’re going to bring on people that are epic, they’re going to bring on people that are a Master 60, they’re gonna bring on people that are hawks off, whatever that is, they’re not saying you have to switch to this.
They’re saying, if you’re not happy, we have this relationship with this provider, that’s at the management system level. Vetting might not be the right term because we all kind of know what we know about the management system world. My job is to go make that relationship much stronger on many other different layers and what I mean by that is, my relationship with a network from Vertafore’s perspective is, “Okay, we have this relationship, we’ve created not only maybe co-branded marketing, we’re doing webinars for them on behalf of their existing member base, we are sending out thought leadership help for the network to add value for their customers.”
We’re doing things like creating for a good network, they have some version of not a personalized person, but they have a team, like we have a network team in place that they can call directly. They know who they’re talking to. We have me and my upper executive level of my team that you can call when there’s a big problem, that then can help an agency who’s having trouble getting through the maze that any sass company has, right?
There’s support, but then there’s also customer service and then separate from that is billing and all of these things. We can tie that all together at the network level and bring that down. Back to your question, if I take it one level below the management system, we’re talking about things like marketing automation, what agency revolution does, E-signatures, things like payment online, electronic payment, I could go on and on.
Companies like Social Survey that’s doing things with reviews online, any of these companies that are out there. The network is doing a much better job of finding that information for their people and breaking through all the noise. Now I know for a fact you are the best marketing automation company on the block. That doesn’t mean there isn’t a bunch of noise out there with other ones that are doing something similar or not quite as good or not quite the same.
Hopefully, the networks are doing a little of that homework for an agency that as you and I know, their hair’s on fire all day long, and they don’t have time for it so they bring a level of consistency and awareness to certain products that might help.
It also like I said before when you’re part of a network, you also have access to the other members so your agency is talking to my agency because we’re both in the same network. I’ve been using Agency Revolution for two years and it’s revolutionized the way that I communicate with my customers. I have not only the network who knows that because they know I have been successful with it, but I can have a direct conversation with another agency in my network and find out the pluses and minuses of anything.
Joel Zwicker: Yes, I think that technology is awesome, access to carriers that’s really, really important, but for my two cents of someone that spent a few years as an independent agent myself, I think access to those people that are kind of in your boat is hugely invaluable.
Rick Fox: Well, and if you look at it from the perspective that I– whenever I talk to agencies now, as quickly as I can determine what level of business acumen they have, and what I mean by that is, are they a really, really good producer that had a book of business and now runs that business as if they’re still an agent versus a business owner?
You’re spot on, Joel, because the agencies that are starting to think like businesses are the ones that see the value in exactly what you just said, in a network and I don’t mean the network, but I mean, a network of individuals that I can get better with because you and I’ve always said, we work together, we’ve said this to a million agencies, they’re so busy working in their business, they spend no time working on their business.
Take a minute, that it doesn’t need to be as much work as you think, especially if you’re connecting with a group of like-minded thinkers, with a network that can help you move in that direction, does that make sense?
Joel Zwicker: It makes total sense, and I’ll tell you the one thing that I was recently at an event myself of a network and I made the comment– someone made a comment to me, it’s like, “Well, where do you think I’m going to find time to do all this? I got renewals to worry about.” I’m like, “Boy, listen, if your biggest worry is that you’ve got a renewal coming up in 30 days, you need to take a step back and reevaluate. You need to have a conversation with some other members of your network here.”
Rick Fox: Yes, because it is obviously like I always say the three burning questions in any agency principles mind, number one, how do I retain the business I already have? Number two, how do I bring new business in? Number three, how do I keep my staff from killing me? That’s a nice way of putting it. You’re right, Joe. This comes down to– I just did- give a shameless plug for our podcast right here, we do the Vertafore insurance podcast called the VIP and I’m the host and I just did this rant on Halloween about planning for next year.
The whole concept behind it was those that are just floating along and wondering about A-renewal and not making a plan for how to retain business, get new leads and new business and get my staff more efficient so they’re not about to walk out the door, that’s planning and this is the time of year we’re q4, we’re dead smack in the middle of q4. If you’re not already ahead of your planning for 2020, you better get on it now and that is again, that goes right back to what I said which business acumen, this is about running a business, you owe that to yourself because this is your– in theory, most of our owners, this is their thing, this is their asset, this is what’s going to take them all the way through retirement.
That you owe it to your employees, because employees want to buy in, they want to know what the direction is, they want to have a plan in place. They will follow you all the way up the hill if they believe in where you’re headed and then third, but probably most important, you owe this to your customers because if you’re doing things to help retention, that would be things like communicating with them, adding value to them, telling them ahead of time when there’s opportunities to either renew or to add other lines of business.
Giving them more content and information because you’ve made a plan, because you’re running a business and not just selling and being an agent. When I talk to agencies, that’s where I see the gap that’s so broad, between the agencies that are getting buy-in and we know there’s agencies out there where the principal is checked out. He’s playing golf four days a week, and those agencies still make money, but you know Joel, because you’re out talking to him, too. It doesn’t take long to talk to one of those guys or gals that runs an agency, that you know where they’re headed because they are thinking about it like a business and they’re changing the way they do things.
Again, to circle all the way back around to where we started if you’re kind of throwing your arms up, like I’ve only been a producer, and I didn’t really know how to run a business, go talk to a network, they can help you. That’s how these things work.
Joel Zwicker: Circling right back because you’ve hit so many great points that really we could probably just do whole other podcast here. So getting everyone–
Rick Fox: Joel, just hold on. For you, I’ll do as many podcasts as you want. You’re my man.
Joel Zwicker: That’s good. I think you and I could do a great rant.
Rick Fox: [laughs] We could.
Joel Zwicker: We may need to censor that one.
Rick Fox: Not much passion on this recording, huh? Not much passion.
Joel Zwicker: None, but I also know that, particularly on this podcast, we get a lot of listeners too on the very first point you made, that as companies like the Nationwides and the Allstates talk about or in fact moving people, agencies from captive to independent. I think a lot of those fall in that category whether a really good producer, maybe not used to running their business per se. How do they go find the right network for them?
Rick Fox: It’s a great question and let me make a point on it before I answer the question. One of the business I used to run we worked with funding restaurants and bars. I always use this as an example. We’d go talk to a small bar owner and inevitably he was a bartender that wanted to own his own bar and we’d go talk to a little bistro owner and it was inevitably a chef who wanted his own restaurant. Does that qualify that bartender or that chef to run a business? The answer is no, it does not.
That same can be said for the independent agent. I’m not taking a shot at this high-powered producer that now runs an agency. I’m just saying take a beat and figure out the business part. If you don’t know, find people that do. If you’re a start-up or you’ve been, let’s use Nationwide as an example, you’ve been a Nationwide captive for the last x amount of years and all of a sudden now you’re independent and you don’t have that support anymore. It can be kind of daunting.
The first thing you do is you figure out how do I get my agency started? I need basically the licensing and all that that you probably already have. I need two things. I need a cheap, good, start-up management system. Like our QQ Catalyst is a great example. The competition out there, EZLynx has something similar like that. You need a website. Guess what? The guy I’m talking to, Joel Zwicker can hook you up with a great website that’s filled with content, that makes you look like you’ve got 20, 30, 50 employees in your shop.
Then you need a plan. These things, they’re not easy, but if you take the time it pays off in the long run. Here’s another way. Find a network. Find a way to connect with people that are like-minded. When you say, “How do I choose?” Don’t talk to one and go that sounds awesome. If you were going to go buy a house, you wouldn’t just go buy the first house. You’d take a look around and you’d be like we like that one that was in that one neighborhood, but this one is bigger and we decided bigger is more important.
Same thing with the networks. We like access to these markets or this relationship or the way they want to help me, but this network over here, they’re going to do things that fit more into what I need whether that be the business side, the accounting side, the marketing side, whatever that might be, and start leaning on that network to do that. Don’t forget to leverage associations along the way as well for things like bulk. They’ll sell very competitive E&O insurance and things like that and help you with that side.
Again, all of this is vital. If you’re not writing this down, you’re going to get off this podcast and go back and do nothing, then shame on you. At the same time, if you’re writing down a few notes, the main note is just spend some time on it and figure it out. You are running a business so go run it.
Joel Zwicker: Rick, listen, I couldn’t thank you enough for the awesome advice. Now I’m guessing and I’m gonna ask a question here that I don’t know the answer to. I’m guessing that if agencies or anybody out there has questions about associations or networks, you’d be happy to hear from them?
Rick Fox: Yes. You can tell from my passion, Joel, that I really do love advocating for the independent agent. If you’re a one-man shop, one-person shop, all the way up to the biggest in the land, I’d be more than happy to help. The best way to reach me is follow me on LinkedIn. I also post a lot of good stuff. That’s the best way to get me. If you have questions, like I said, I’d be more than happy to help.
Joel Zwicker: Awesome. Once again, Rick, thank you for your time and also I encourage you check-out the Vertafore Insurance Podcast. The VIP, Rick, does a pretty good job hosting that. I won’t put him up against me or anything. I would never do that to you, Rick.
Rick Fox: [chuckles] Thanks, Joel.
Joel Zwicker: Thanks, everyone.