Full circle

Last month, I received a brochure from Forrester and Co., congratulating me because Ruchman Associates reached its 50th anniversary this year. Fifty years! It gave me pause to consider my career. As I reflected on my experience in the industry, there are two things I can say without doubt: One is that things sure have changed since I entered the industry. On the other hand, many things haven’t changed at all.

Commonly, people stumble into a career in insurance or they are born into it. I, however, knew that insurance was for me when I entered college. I was an insurance major at Michigan State and when I graduated, I was filled with all the excitement of a young person looking at that potential pot of gold. I first started selling life insurance for a small company called Continental American in 1961, and being young, I would sell my clients $5,000 policies. Of course, it was a struggle. My original tax return reflected an income of $1,900 that first year. My wife earned more than twice that much as a teacher. There were times in those early days, when I wanted to just throw in the towel and find some other occupation. But, with the encouragement of my wife and my parents, I persevered.

Early on, I decided to take on property and casualty and found it both exciting and challenging. My initial capitalization was $2,500. It was difficult to do business with insurance companies in those days. I can name a lot of carriers that existed 50 years ago (many of which are no longer around), but most of them did not want to gamble with a young upstart like myself. Fortunately, we had a lot of general agencies that were happy to take my business back then.

It was always difficult to place a large sum of coverage with one carrier. Today, we go to one company and they will write whatever amount of property coverage we need; they’ll write to their limit and use their treaties to give clients have a single policy. But, back then, I’d have to place $10,000 of risk with one carrier, $10,000 with another, and so on, searching for markets until I had a complete package for my clients.

One day, when I felt I had enough business with my general agencies, I decided to see if I could get an account with an insurance company. I was lucky to meet a man named Jack Scott at the INA and he decided to take a gamble on me. For a year, INA was my only company. Then, I met John Gallagher, marketing manager at TransAmerica—it was the beginning of a lifelong friendship with one of the best marketing people this industry has ever known.

Over the years, as my agency has grown, change was one thing I knew I could count on. Technology has never stopped advancing. In my career, I’ve seen the airplane industry switch from propellers to jet engines. My first desk sported a rotary dial phone. We didn’t have fax machines, computers, cell phones or email; we used messenger services: Everyone in New York City would use Walsh messenger service for same-day delivery. That was speed back then. Now, everything takes place in a flash—I can transfer information in a second.

I will never forget when I was chair of the TransAmerica producers’ panel and I suggested to our resident vice president that we could speed up the underwriting process tremendously if the company would put fax machines in our offices. I was told it was a bad idea and the system would never work. So, in order to keep up with this new form of communication we, as agents, went out and bought the fax machines ourselves. Later, the Aetna came along and convinced us to automate with their Gemini computer system, which was state of the art at the time. And so, we automated. We used to have rooms and rooms of file cabinets and a single computer would take up an entire room. Now, my blackberry has more power than that first Gemini computer, and it was the size of a refrigerator. We’ve never stopped investing in technology as long as it helps us communicate and serve our clients faster or more efficiently.

Often, we found support outside of our carriers—in our associations, for example. I joined PIA in the ‘80s, and as a result, have continued to find ways to improve my business. In turn, I found the opportunity to give back to the industry that had given so much to me and my family. When I joined PIA, my intention was to give back, and I found it was one of the best things I ever did for my business as well. At the same time, as I look at the young people entering the industry now, I can say that some things haven’t really changed at all. You still need fortitude to succeed in this business. You still need support from family and friends. There still are days when you might want to throw in the towel as a producer, but if you stick with it and you truly take time to know your stuff, this can be a lifetime career that pays you great rewards.

Carriers still are reluctant to gamble on young professionals who are simply too green to have proven themselves. And once you do find markets for your business, carriers can be reluctant to help you invest in marketing and technology. It’s still difficult for small agents to get into the business today; how many carriers will support a start-up? And, small agents struggle to carry the ever-increasing costs of automation and underwriting. When I went into the business, carriers did the underwriting and processing, and they supplied all the automation and technology to support these functions. Now, with the carriers doing less, the agents are carrying more of costs of doing business. Consolidation is still taking place in our industry—but even faster. What once was a field of 30 or more companies is now an industry dominated by only a few majory agency system major carriers. Regional carriers and general agents are still around, filling a vitial role that the big carriers don’t.

But, despite the struggle, there’s nothing like making a sale and having a prospect who is now my client, say, “Steve, thank you for helping me and I have absolute confidence that I did the right thing for my insurance program.” Looking back, it’s such comments from loyal clients that kept me going.

If I look at the many successful agents who started out like I did, I recognize similar qualities, including intestinal fortitude and devotion to our clients. Clients still buy their insurance from me because they trust me. Even when they’ve left for an 800-number, they usually come back after a botched claim or bad service, to place their coverage with “Steve Ruchman,” – they aren’t even thinking about a company name.

People are always saying that online shopping will do us in. If some carriers could do it, they would get rid of agents. But, usually they have found that we are the most effective and efficient distribution system they can use. There will always be a portion of the insurance-buying public who think they don’t need an agent’s services. But the majority of the public want a face-to-face relationship with someone they trust; someone they know won’t give up—not some faceless icon or cartoon spokesperson for an 800 number.

That’s the power of an independent agent—as people who care about our clients, we provide them with a sense of security that helps them sleep at night. In time, I enjoyed success and built meaningful, lifelong relationships. Al Nausbaum, whose business was next door to my life insurance agency in New York City, and I moved together to Long Island. We shared space for a while (Al went into a business relationship with Jerry Brunell, whose son I recently entered into partnership with at B&B Coverage).

After several years in business, I had the opportunity to buy into a summer camp that I went to as a child—a lifelong dream! One of my counselors in the early years of the camp was a young man named Lewis Bernstein, the son of a dear friend, Paul Bernstein. Lewis also is one of the partners at B&B. When I began look to my organization’s future, I decided to merge with Lewis Bernstein and Ronald Brunell, where my daughters and I could do good work at a good business. The circle has been completed.

After 50 years, I’m proud of my work and the business I built. I’m pleased with my career choice and I was happy when my daughters made the same decision. I encourage young entrepreneurs to consider becoming independent agents. It’s tough work, but it’s a great business and if you persevere, and put the time and effort in, you will reap great rewards.