Buy, Scale, & Repeat with Greg Hogan | Episode 129

No TikTok, Greg. What's that? No TikTok.

I think we're gonna clip that that clip that question with that respect.

No. No, it's too good. I'm just a basic guy, man.

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Right here, guys. Reach out to John Sachs and his team at Property Management Redefine. We'll take good care of you. I'm Tim Gardy. And I'm Sean Mooney. Today, Sean, we have another one from your insurance crew on. Out of New York, we have Greg Hogan, the president of Caraba Agency Insurance. How are you doing today, Greg?

I'm great. How are you guys? Thanks for having me on.

Doing well. Thanks for coming. So, like many, Greg didn't plan to go into insurance, but he took a job at a big insurance company, and here he is, 38 years later, and still doing insurance. Greg has been on the retail client-facing side for 36 years and he's still learning every day. He purchased his first agency nearly 11 years ago and has added two more since. Greg's team has been nationally recognized as a best practices agency for about the last eight years. Caraba Agency masks itself as more of a consulting organization than a sales organization. So while you are an insurance expert, I understand that you also have a passion for investment and rental properties. How did that come to be?

Well, when I say investment and rental properties, I mean I own something, but I I really insure them. I just love insuring them and and working with the people that do uh to that business.

Why uh why the investor side of real estate? Why does that why does that appeal to you in the insurance business? Is it just the investors themselves? It's like a good client for you. Is it the repeat business? Like why investment?

A good a good real estate investor is they always make good clients if you if you find the right ones. Um, because this is their business, this is their asset, and they're gonna want to take care of it and they're gonna want to cover it right. Um and that's not all of them, but it's it's the ones we choose to work with. Um and we've had some since even before I bought the agency. Uh we've had you know numerous clients that have that have been with us 20, 30 or more years. Oh wow. Yeah. That's awesome. The uh the agency when I b before I purchased it, um, like a lot of old timey agencies, grew out of real estate and insurance. You know, there was a time, and and and maybe Sean knows this as well. Um, there was a time when a lot of agencies would be real estate and insurance, maybe taxes. I mean, it was kind of like this little one-stop financial place.

Yeah, we see it down here. Uh, the contribution chip, which is a, I think it's the oldest insurance company in America. Uh, if I have that right. Noah, you can fact check that. Um, but they they were very popular in and around the Philadelphia area as being housed inside of real estate offices. And a lot of those real estate offices were a lot of uh, you know, in investors, real estate offices that worked with investors, and they would have multiple properties. And so contributionship over the years had developed books of business uh for investors with, you know, DP3s, DP1s, you know, and all this such. Can you um, Greg, just to go back a little bit, uh, can you give us some background about the the agency specifically and how you did get your start and what that agency was when you took over and some steps that you maybe implemented to get it to where it is today, and and what the difference is, how it looks as a profile today versus back then.

Sure, sure. So I'll go way back. I've been in insurance since I got out of college. The first two years I was a programmer for an insurance company. Um so I was in the office and you know, just in the home office, and that's not where I wanted to be. So um I was recruited out um to an office that did life and benefit, life, you know, primarily life insurance, but also group benefits, big group benefits, um, self-funded and that type of stuff. Um so I got licensed and did that for um somewhere in the seven-year range. Um and from there, I I had a solid background in in you know, executive life insurance and benefits, um, whether they be medical or dental or life. Um but then I wanted to get out onto the retail property and casualty side. And and uh my current, you know, my wife, who was at that time just um my girlfriend and fiancee, um worked at an agency as a broker herself, uh or as a really as a CSR, but a licensed broker. Um, and that agency hired me on as um primarily a commercial broker with no insurance in PC, but quickly got licensed, quickly grew a book of business, and I spent 15 years or so there. Wow, um, you know, really getting mentored by a solid, solid old-time um insurance professional. Um, and that agency originally had real estate years before I joined it as well. Um but then we jumped forward a little bit and I purchased this agency um a little just about 11 years ago. Uh in fact, it was I believe it was 11 years ago this month. Um and and it's much different now. It it really is. We've we've grown tremendously because I had a block of business to add to it, you know, some some group health and group benefits. Um of my old when I left my old agency, um, a lot of that commercial business followed me.

Um would you say would you say the change in your 11 years is like double or quadruple the changes that happen in the prior lifetime of the agency?

It's just, I mean, you know, the the the easiest way to communicate with clients right now is texting. Yep, yep. Right? I mean, I I I just it's as soon as I get a prospect, we we start texting with them. Um some people, you know, okay, I only want to deal with email and only want to deal with phone, but yeah, for the most part texting because it's quick and easy.

Yeah, right.

If you have a quick question, you can just the response rate is is 99% versus a phone or an email, it's like 50. So you know you're gonna get a response if it's text.

Exactly. Exactly. Well, I mean, we write some contractors, so think about contractors. They feel their phone ping and they can respond to a text real fast, right? Yep. But are they gonna open up their phone, look at email, scroll through the junk that they get, and then answer yours? Probably not. Oh no, right? Yep.

So what uh how are you how are you set up within the agency for texting? Is it a separate texting platform? Do you have it buried into your uh AMS or CSR? How does it communicate and how's that setup working?

The texting platform is part of the AMS. Um, it's not you can't call on the number though. That's the only thing that's that's yeah, text only a little bit of a hitch, but yep, whatever. Yeah, um, but the cool the cool thing about it is um it goes straight into the customer file. So if I go into a customer and click on their cell phone number, the texting portal opens up and that whole history is in the database.

Yep.

Right.

You know, it's in there. Um and we can also, you know, copy, not copy it, but we can also click it and make it a document we added specifically to um to their file as well.

So it's like part of a diary for a background or a history or a note that you need to make sure is pinned as an ex, you know, a special note uh say habit.

Yeah. I mean, we're not doing a lot of selling or a lot of critical things that we need to save with texting, but yeah, um, it is all saved, yeah.

You mean when they decline coverage? Is that that text in there?

Yeah, no. Not that we don't do it that way. We don't cancel it that way, none of that stuff.

I got one for you, Greg. So um I saw that. So am I correct in saying that you've you've acquired three agencies in about the last 15 years or so?

Yeah, 11 years, yeah. Oh, yeah.

Okay, the last 11 years. So I got I got a couple parts to my question. And it's what it is, it's more about like operations and scaling. Like one of the things we love to talk about on the show is from a small business perspective, like how do you grow? You know, some people just want to be one man, one woman show. Some people want to be a big corporation, some people want to be somewhere in between. So when you started scaling your operation, what was it that made you want to acquire businesses and grow that way? Why acquisition?

Well, that wasn't originally my plan, Tim. It was I bought the one that I um, the first one, Caraba, and that was the biggest one. And I bought that because I had kind of maxed out my time at my old agency. Um, you know, they didn't want to sell to me. We had talked about that. They didn't want to sell to me. Um so I found something else to buy, and I bought that. And and um, you know, takes a little while to figure out what you're doing. Took a you know, around a year and a half to to just feel comfortable with running things and and and doing all the owner things rather than the agent things. Um and I wasn't really expecting to to to buy anything or grow anything, but um I heard about an agency that was thinking of selling. So I talked to them and we pretty quickly struck a deal. Um, I don't know how long ago, maybe 2019, we we struck a deal and and bought that agency, and it was pure um pure revenue. We just we just folded the book of business in, no people, no um, no hard space, nothing.

Where did you come across to know that they were looking to because this this comes up too in terms of if you are searching or if you're looking to buy or looking to acquire, where did you get like the tip or did you know the person and have a conversation? How did that work through uh so that you would know that they were looking to sell?

I did know the um agent, I didn't know him well. I knew of him. He was in town as well. He was only a couple miles from where I am. Um, and I would see him periodically at agent meetings or in-person classes when we used to have those. Um and one of my company reps mentioned to me that he heard that they might be selling. So um I actually kind of I didn't I don't want to say stalked them, but I went to the post office three, four, or five days in a row, right? You know, different times. Yeah, because I used to see them there periodically. Yeah, yeah.

Like, let me go have lunch at the post office today, honey.

Yeah, you know, let me go hang out, make some calls while I'm sitting in the parking lot. Um love it. And and and I saw him and we got talking, and you know, I just whatever. The the conversation came around to agencies selling or something along that because a big one had recently sold, and yeah, and he said, Well, yeah, who's you know, who around here is buying agencies? And I was like, Right here, you're talking to you know, let's let's let's have a chat. He's like, I'm probably gonna come see you. And two weeks later he did. Oh and showed up with a folder of all of his reports, all of his everything. Oh, I love that. Um he was a lot smaller than I thought he was gonna be.

You mean like uh revenue size?

Yeah, yeah, yeah, yeah. But he had kind of run it into the ground, you know, those the old time agencies, and the guy was the guy was only a few years older than me, but um you know, he kind of was just running on fumes and he was tired and wanted to get out, and yeah, I bought him at like 1.9x, and um it was a great, it was a great purchase, and we still retain probably 85% of those clients uh you know, seven years later.

Was it uh did your carriers are line or what did you pick up anything additional? Because obviously the the revenue and the premiums there, but sometimes with these acquisitions, sometimes there's like a like a like a diamond in the rough, right? That you know, if you didn't know how to carry, like, oh wait, you have them too, and they write these. Like, was there anything that you found maybe that you didn't know going in that you surprised you?

On the first on the on this this purchase I just described, no, but on the last purchase, yes. So on the on the middle purchase I just described, it was all companies that already aligned with us. In fact, um, I had markets that he had been brokering. So I bought business, you know, he was getting paid 60%, and and I just bought it and immediately got paid 100% on it.

But that's a diamond in the rough, right? Like, so like you didn't do anything uh to retain the business, but immediately you're you're paying one nine on that policy, and you're getting uh 40% return or whatever the you know, whatever the jump up.

Plus plus the bump for profit sharing, right? Yeah, you get the growth bonus, you get the extra revenue, maybe kicks you into a different category. So yeah, we um that's a win-win. We did we did very well on them. But the the the second purchase, you know, after my original, so my my last purchase, that guy actually came to me. Nice.

Because he knew kind of like you were like a player within the space now, like you had bought someone else. Now I'm coming to Greg because I want to see if Greg wants to buy me. Was it like in that vein?

That's effectively what he said. He, you know, because my so my landlord is is like you, Tim. He's a um uh real estate broker and investor, owns a few properties, and he owns the building I'm sitting in. Wow. Um and this this agent knew him and that you know it just said, you know, who do I, you know, how's Greg? Should I should I talk to Greg? And and you know, next thing I know, um, you know, he's coming to me because he knows that that uh I work a lot like he did. I work in a very community and and and consultative mindset. And um yeah, same thing. He just brought his papers to me and and we sat down. That took a little bit longer time because once the lawyers got involved, it got a little messy. But um I got, let's see, it's April. It's the end of I got so May. My last payment is in September. So we got a few months to go.

Take off the handcuffs. Let's go.

Yeah.

Leave the papers, bring the cannolis.

All right, yeah. All right, so here was the second part of my question was you know, we know why you started acquiring other agencies.

Oh, wait, can I jump in real quick because there was one point that we missed there? Uh was there something you wanted to add in terms of the the diamond in the rough that you had in that one?

Yeah, yeah, yeah. One of one of their main um companies we didn't have. So um you we immediately acquired a new appointment. They were very happy to um to take us on. We've since grown that book of business um and had a really good relationship with that company for coming up on five years now. Um, and this purchase also gave me a second location, which is only a mile away, but it serves a different clientele. So we kept it. We all we did was refurbish it, clean it up, paint and carpet.

Yeah.

Um so we have two locations, you know, basically a mile apart.

Yeah.

Um which, you know, I mean, the extra the carrying cost of the other office is very, you know, very minor relative to uh everything else. So we keep it just because of the different client bases. That other one is more of an inner city, um, uh lower socioeconomic client base, which uh, you know, a lot of people will call substandard business, but it's fantastic business. We've doubled that agency.

So well, it's it's really what you can do with it. I I don't care if it's substandard or not. It's if you know how to manage it and you know how to build efficiencies, because a lot of times that comes with work uh and it comes with more effort.

True.

But if you're able to design and optimize your agency to handle that, then it's not as uh heavy a workload that that some others might if it if it wasn't optimized for that line of business or or or those types of clients. Would you say that's accurate or yeah, yeah.

Well, for instance, the agency that I I the last one I purchased called Rediki Agency, um, was they pretty much wrote only personal lines. They farmed out the few commercial policies they had. They didn't have any expertise in commercial. Um, so they were leaving all of that business on the table because they didn't know how to ask for it or how to do it. And and now we have the personal lines and we're starting to grow some nice little commercial lines accounts out of that office. Um, and that office is primarily, you know, is probably 80% Hispanic clientele, and our area is really, really growing into a Hispanic community. And um, I have some bilingual people, so it's uh it's a it's a nice thing.

Hey everyone, this is Tim, your favorite bricks and risk co-host. But don't tell Sean. I hope you're enjoying this episode, and I'll get right back to it in a moment. Our audience grows through word of mouth, so if you would please take a moment of your time and give us a review on the platform you're on, that would be fantastic. Please also help spread the BR word by sharing your favorite episode with a friend. We greatly appreciate your time and trust. Now, back to the show. Yeah. All right, so you you get the first one, you get a couple more after that, you're starting to grow your scale, your operation, your volume. Like, what was your approach with the clients? Because the reason I ask is like you're you're kind you kind of own like three different brands. Let's call it. Let's call it. And all those people in insurance, what I've learned through Sean is that you know, if you have a good relationship with your customers, your clients, they're gonna stick with you for years to come. So obviously they were with the other companies for years. What did you do with those clients to say, hey, I'm Greg, you know, here's my company. Like, come on in. Like, what was the approach? Was it email marketing? Was it letters? Was it phone calls? Was it an event? Like, what did you do?

Um, we did with the very first purchase, which was the biggest block, we did a joint letter.

Okay.

You know, the old owner retiring, who'd been around for many, many years. And in fact, one of his old real estate brokers was just in the office a short while ago. Um, so he did a letter introducing me. I did a letter then talking about, you know, what I hope to do, which was just we're just gonna keep it the same, maybe modernize it a little bit technology-wise, but service-wise, no. We're we're keeping that old school stuff, and a lot of agents are gonna are gonna hate it, but we still do a lot of those old school things because um that's who the agency is, and and we keep growing, so I'm not gonna change. Um the the the second purchase, um we didn't uh we didn't do a thing with the second purchase. Wow. Um we just folded it over, um, and as the and and kept the phone number for a while, and as it came in, we just explained what happened and nobody cared.

Wow.

Nobody cared. Um, there was one, excuse me, there was one person that cared. There was one lady that said, Oh, I have to move my coverage. Um, now that Frank's gone, I I have to leave.

Yeah.

Oh, okay.

Wow. Uh the third the third person.

I want to know what the I want to know what the history was with her and Frank. Like, what kind of chocolates do you like? And and can you give me your address too? Oh, wait, I have your address. I'll be over this afternoon.

Yeah. It was just very strange. It was very strange. I I have to I have to leave now because Frank sold the agency. Spider sense. Maybe she had a family member. Yeah.

Yeah.

I don't know. But there is another funny story that came out of that purchase. Um, we had a a a lady who um was very nice, and she said, You all sound like really nice people, but my dog needs to meet you to make sure I'm gonna stick with you. And I am not like let's go.

You went out, you went out, you got you got two two big boxes of milk bones, you threw them in your pockets, and the dog had a big steak in the office.

No, she brings the dog in. Is it was this um uh big gold?

You you said you you went along with it to say let's go.

Come on, I said dog's gonna love the heck. Bring the dog in. Sure. It was you know, it it was it was it was a customer and another um related family member, um, you know, two nice personalized packaged accounts. Um, and I said, sure, bring the dog in. Yeah. And she brought that dog in and marched it around to everybody in the office. Oh, wow. Um, which at the time was including me, was five. And um then, you know, she ended up in my office with the dog sitting on my floor and we're talking. And she said, you know, one of your people is very is really high anxiety. And of course I knew exactly who it was, but it was just it was just funny.

Was that person's name Greg?

Yeah. No, the dog was licking my hand, you know, he was cool with me.

You're in. You're like, I was that was good. I was packing bacon in both pockets.

Like we were like rubbing down the milk bones on the shirt and the paint before you met, like, you know.

Oh, that's great. All right, so here's here's the here's the last part to my scaling question. Sorry to make this one so long. All right, so as you're scaling, you're buying these other businesses, you're stacking them on, your business is growing. Sometimes, depending on what business you're in, I'm insure with insurance, if this is the case. Sometimes when you stack, sometimes your margin can kind of compress a little bit. Maybe because you got to throw a little marketing at it, maybe you have more rent, maybe you need more staff, uh, maybe you need more tech, you know, whatever it is. Did your margin stay the same, improve? Did it shrink a little bit with the size? Like, what was kind of like the overall like outcome?

Um positive, very positive. We have a I just finished doing my best practices data. Um, I gotta submit it today or tomorrow. Um, my EBITDA, and I'll explain that if you want me to, but my EBITDA is clocking in at about 56%.

Wow.

Yeah, we can go through that, go through that a little bit. Let's get a little technical very robust. Um, and I'll get back to that. I'll I'll get back to the EBITDA. But we have we have um used technology, just use what we have. We're not buying all crazy stuff. I'm not super high-tech, but we just use stuff, and I have um really well-trained people who just work very hard. Um, and it's just maximizing what we're doing with the clients that we have. Um, so at one point we peaked out at seven employees, one of them was part-time. We're presently sitting at five employees. We could probably use another part-timer, um, but yet we're 3x the revenue when I first bought the agency.

Wow.

So um, I don't know what it is. Um, I'm I'm I'm happy about it, and and it's part of the reason that we keep, you know, the best practices uh designation, um, which is primarily a financial metric. Um but the EBITDA, so that's earnings before interest taxes, depreciation, and amortization. And I think a good or average agency is is probably in the 25 to 28 percent range. I'm not really sure. Sean, have you have you ever looked at that for an agency or talked about that?

No, but those numbers do um sound about on target there. So he's about double.

Yeah, yeah. That's um, I mean, I will tell you in my um my agency size category for for the best practices study, we are routinely um among the top of everybody e-biddle-wise, because we've been over.

Especially because if you go revenue per employee is probably a big component of it, right? Yeah. And so if you go from seven to five or whatever the the you know, if you're growing revenue out of 3x and you're reducing staff, I mean, the the numbers kind of get skewed that way, but it totally works for you, right? It it's like you you can't really you know find fault in um building the agency, growing the agency, and just just getting dialed in with the the staff uh that you need to facilitate uh servicing.

And part and part of it is by the way, uh I mean, this is you know, it's kind of a a lot of agencies don't do group health, group medical. Um, but that's low touch business, you know. So a good 18-ish percent of our revenue is in that business, and really all it is is renewals come around, it's like, yeah, this is the renewal, it's health insurance, it went up. Um just like those larger commercial accounts, right, Greg?

Yeah, yeah, sure. I mean, I mean it actually the other way in terms of a lot of touch and a lot of review and a lot of a lot of touch.

I mean, a lot of touch. And we've we've lost some larger PC accounts. Um, and and I'm not really all that unhappy about that. I mean, you hate losing them, but my gosh, some of them are just a ton of time and effort. And when you math it out, it really you might be just better off writing personal lines.

Yeah.

I mean can can you talk to us about book composition for Caraba, about how it's uh uh you do it by revenue or premium, or just give us a sense of like where you're explaining explain book composition for those of us, me included, who are not in insurance.

Just uh the makeup of your book of business by line. Um so if you were to talk and segment it, uh personal lines, commercial lines, and then benefits, and then maybe I don't know, something else might be in there.

Um hold on one second. I'll I'll talk, but I'm gonna open up something too. I'm looking away for a moment. All right. Um yeah, I mean, we we're definitely mostly um personalized. Okay.

Um that would be home and auto, right?

Yep. Correct, correct.

We uh umbrellas, jewelries, boats, you know, whatever else you want to.

I mean, we're I I I will tell you fully um fully one one third of our revenue is in personal auto.

Oh wow.

Wow.

I know that. I mean, because I I'm opening up my best practices. Yeah, you got it all right there. Uh submission sheet. It's all right here. So just you know, that's why I'm kind of you know faking it while I'm I'm uh loading it up.

Um does it kind of mirror uh by percentage where the where the agency was prior to you um acquiring? Like were they similar to what you or were were they some loaded in uh differently?

Um it you know, we've pretty much we've we've actually gotten a little bit more personal lines heavy than commercial lines heavy because I I mentioned I lost a few decent sized accounts and I haven't um um recaptured some of those or recaptured ones to that volume volume. But um yeah, I mean we've grown we've grown to be a little bit more personal lines heavy than commercial heavy over the last let's say four or five years. Part of that is just, you know, the market's been crazy for home and auto and just up, up, up. I mean, yeah, our average personal lines package now is two cars and a home. Geez, we're probably every bit of 4,500, maybe, maybe pushing five grand.

That's where I think that we are. I mean, that that $2,500, $3,000 premium account is now five thousand dollars.

Wow, so it's it's basically like double.

In in and that's five years, uh, like you know, pre-COVID to where we are now.

Yeah. I mean, that's a good thing for insurance agency owners.

It's it it is a good thing, but it's a good thing for consumers too. I gotta tell you, it home homeowners market and the auto market to a degree were were underpriced. Oh, yeah. Homeowners market especially was dramatically underpriced.

Um we great, we were seeing like mil 1.2, 1.3 million dollar coverage dwellings and prices at like $900. Like, like, like this, that was that was the pricing prior to to COVID. You you know, I mean it was the market was so hot, everyone was undercutting everyone. If you're if your loss ratios are good, you're way willing to like throw numbers just to get market share. And that and to Greg's point, that's not good. That's not a good place.

That's not good for anyone.

That's that's a no, that's a really bad thing. Customers love it, but then what happens is they get mad when their premium doesn't drop every every year or every other year.

Yeah.

Um and and you know, there's a there's a point that it has to come up. And we hit that point probably four years ago. Um, when they did the whole rebates for the auto, I was like, these companies are out of their minds.

Yeah.

Because it just conditioned people to expect premiums to do that, uh, to you know, companies to give out these rebates and and and premiums to drop. And yet, you know, with the advancements in car technology and with the the, you know, everything's getting more expensive. I mean, you know, a car bumper is now eight grand. Yeah. A windshield is two grand. So but anyway, that's that's helped push our agency volume-wise to be more in um more personalized heavy.

Well, there's we are there's stability there, you know, for sure, right? You don't have the volatility year over year uh with larger increases, which to your point, it makes it better for the consumer because now we're at a place where like you're talking like real numbers, right? You have a premium that matches the risk. And that's better. That's better for us, it's better for the client. It's uh it's more of an even playing field for these carriers so that it's not someone throwing out some goofy number uh just to get market share.

Do you think personal, do you think personal has worked for your your agency, Greg, because of the relationships you have within your community? Or is it just more or less you have those carriers that offer very competitive but protective, you know, uh opportunities for your clients? Like why, why has it become more personal? Like, is it in your marketing, in your approach, or just the history of what you bought?

It's just um I don't have a dedicated commercial lines person anymore for service work. Um, I'm training a new one. Um, I'm the only person in the agency who has a commercial insurance background and I love it. It's great, but I, you know, I don't I can't do it full time because I'm running the agency as well. Um, and I just don't I don't feel like hiring another person that I then have to train a whole other salesperson for months and months and months. I just I just don't want to do that. Um but really I just think that you know we keep growing in personal lines because our referrals keep coming in mostly for personal lines. Um and it's how we sell personal lines, it's how we talk about personal lines. You know, we explain coverage, and you know, every every third customer will say something along the lines of um, no one's ever said that to me before. You know, and all my people are trained to do that, where we explain coverage and go through the, especially the homeowner side, go through what what things are and why you need service line coverage, why you need water backup, why you want to have a million of liability instead of 300,000. And customers respond.

We see the same thing. Our approach is very similar to yours, Greg, in that we find new clients that um really uh want to do business with us. It's more about the education and the consultation. And you know, people that clients and prospects that value that is where we really find our sweet spot. You know, we enjoy talking to those clients that want to know that they're protected. Um it's it's a way for us to differentiate because as you said, there's there's a lot of people out there that don't take the time. You know, we have a lot of people come to us that say, Oh, I I didn't I didn't wasn't even aware that there was an umbrella. Wait, you're telling me that I can get a million dollars of extra liability for $400? Like, so when you when you start getting in those conversations, it's a way for you to differentiate yourself because you're not the Johnny insurance guy down the street, right? You're you've elevated yourself into a position where you are uh the partner with that client that is consulting and offering them a way to better protect themselves and their assets. And that's kind of our lane. That's where we really thrive. And what we found is that just like you, those people that value the coverage and the education are telling their friends. Yeah, and their friends are very similar in terms of a profile to the person that we're working with, and so that's how we've grown. We found that helping them, educating them, making them aware of all of these ancillary products and coverages is the best way for us to connect and and drive referrals with new business. Yeah.

Well, think about auto. I mean, you know, people come to you and like, I just want to get the state minimum. Whatever. I don't know what the state minimum is where you are, but for us it's 2550 and 10,000 of property damage.

We're we clock in at 1535.

Yeah.

Gosh. So so our standard is we write 250,500 um and go up from there. I love showing a million uh CSL. And I really love showing a million CSL because I can talk about the probably the most undersold coverage or the most, I don't even know how to say it. Agents don't talk about it enough. Um, underinsured and uninsured motorist coverage. Yep. Because if you have a million CSL in your auto, then you can you can in New York anyway, you can get a million uh uh uninsured motorist coverage, which protects you in the event that someone else doesn't carry rate limits.

First party benefit. It's it's great. We we tap out, I think at five uh five five hundred um is the max. But you can also some umbrella carriers will let you take uh the um coverage on the umbrella.

And and there's a reason that it doubles the price of the umbrella, right? Because as soon as you add the the SUM into the umbrella, the the umbrella premium doubles, yep, or somewhere in there. Yep. Um and and all you need, you know, and we just like you, we collect stories and we tell clients the the actual claim stories. Um and we don't have to tell too many, we tell one or two.

I can give you one. We got uh a client had an accident, uh property damage, $100,000. Uh it was a bad accident. Um, they got, and this is what I show people. This is my like here, here's why is they got a letter from the insurance company say, hey, we're getting really close to your limit of coverage. You might want to reach out to an attorney at this point because we're getting really close to where we're gonna cap out. And they were spooked. They were like, what does this mean? And I'm like, remember when we talked about that umbrella and you didn't want it?

Yeah, yeah.

Here's why we recommend it. And and here fortunately, the 100K limit was I think it was like 97 uh that they capped out on a on a on a pay uh for the property damage. But we used that to show people that it was a bad accident, but it wasn't real, it was kind of a typical thing. It just happened to hit like a truck, a brand new truck that was like $80,000 or something. Wow, jeez.

Yeah.

But real life instances to show and to educate and let people know, hey, these things can happen.

Yeah. Well, but that's that's the biggest consultative thing. And I really think that's why we um have grown more in personal lines, is you know, I have you know, three people talking about personal lines all day, every day, as opposed to me, where you know, I pick and choose who I want to work with on the commercial side. So that side isn't growing as much.

Yeah.

Um, and we are getting a little out of whack, you know, being a little personal lines heavy. But I got to tell you, it's great business. Last year was our best year um revenue-wise, was our best year profit sharing wise. Um, you know, we're just gonna keep doing it.

Awesome. All right. So the tip that you put down for our bricks and riskers, always do the right thing. Don't compromise. Like, was there like a specific event that helped you have more of that mindset? Did someone teach you that? Was it instilled in you?

It's just it, you know, you have to have a set of core principles. And and in this case, I'm gonna talk about core agency principles, not my personal, but core agency principles, and we write things certain ways. And every time we try to do a favor, or every time we try to listen to the sob story and give them a lower limit, what happens? There's a problem, and it and someone gets bitten. And and it just, you know, it got to the point where I I said to my team, um, if you hear me, you know, giving in and and make trying to make an exception for someone, um just tell me to stop. You know, get the hug. Because you gotta just do the you gotta do the right thing. Then you don't have to worry about the fallout for for what you did. Um, and and it's it's really just that simple. I mean, we are not just about writing coverage, we want to write proper coverage um to cover people, and we'll walk away from the sale if if um you know they're really pushing back and want us to cut limits and you know, cut whatever. Um it just uh sometimes I I care too much than the you know, I care more than the customers do about protecting them, and that's kind of when we walk away.

Can you talk to, I mean, so that's got from from what I gather, that is if you're saying that we write a limit, it's $25,500, the state limit is so we're 10x on the coverage limit that we will offer for our agency. Can you go a little bit deeper on that in terms of I mean you must be turning away a good amount of business because there's only so many people that you're going to convert to say this is why you need it, and they come along with you and they say, okay, that that I understand that. So can you just talk a little bit more about the amount of business you're turning away and how you know how that would work?

Yeah. I mean, literally most of the calls we're getting these days are for personal auto. Um, and and we chase away on the phone one of two, right on the phone, just because we qualify them out um based on on certain questions about you know how much how if have they had claims, have they been canceled somewhere? Are they shopping only on price? Um and and you know, once we get into a conversation, if we if we get beyond that, then then we're starting to show them the better limits. And um some people balk at it and don't take it. And and some people understand what we're doing and and do take it. Um, but that's why we try to write package business more than just monoline business. Um, but it is a little tough because you know, you sometimes you feel bad and and and you know, someone's giving you the sob story that, you know, I I I can't afford the 250. I want to get it, I can't afford it. Um but I also know that that all the other independent agents around me um have the same carriers. Some of them do work the way we do, some of them don't, and they're gonna pick up that that business with the lower limits. So I you know, I'll listen to people's sob story, but I just let them go. Um how about it?

How does it work with your salespeople? Because I know that like if you're turning away 50% of prospects, I mean, there's gotta be Greg, what are you doing to me?

I'm I'm not eating steak anymore, I'm eating chicken.

Here's the magic. Here's the magic to it, guys. I want to I'm gonna tell you, my people are not incentivized to sell policies, they're incentivized to do the right thing. They don't get commission on writing coverage, they're just paid, they're paid and there's bonuses, but they don't get paid on this week. I did $10,000 a premium. They don't get paid on that. Okay, because I had someone that did that, and guess what happened?

They wrote a lot of bad, a lot of bad premiums.

Yes. And and and I'm not gonna name names, but there are some companies that that's their model is just writing whatever they can because that's how they pay their staff, get you know, $15 an app or $25 an app. I don't know what they pay them these days, but yeah, they they reward the activity of writing business, so they write whatever they can write, and that's includes state minimum. It includes people that they're not inspecting the homes, and then the home gets canceled. Um, and we can't help them at that point. So um, we screen on the front end, we I don't pay people um commission on cases. Um, I just pay them, you know, and those who get benefits get benefits paid in full. I mean, it's just a different model. And and I think it it brings that it gives them the freedom to do what they want to do without fear of their pay going down because they're not getting a commission.

Yeah, yeah. Well, let me say that answer it, Tim. That does. And uh, I want to end it with saying this this was an awesome conversation. It was so interesting to hear more about like how you kind of got started of being an agency owner to also scaling it. So before we shut this one down, why don't you tell our listeners and watchers where they can learn more about you and everything you got going on?

Um, my agency website is caraba.com. You can go there. We do blog a little bit, not a ton. Right. Um, you know, I'm a I'm a big poster in IA in the IAOA group, but you need to be an independent agent owner to be in there. Um but that's where I met Sean. Um but that's it. We don't I don't do I don't do you know, no TikTok.

I don't have YouTube. What's that? No TikTok. No tap dancing.

Well, I think we're gonna clip that that clip that question with that response. No. No, it's too good.

Cool.

Well, I'm just a basic guy, man. Yeah, vanilla. Vanilla as we go, you know. I like vanilla.

Really appreciate you taking time out of your day for us, you know, zooming in from New York. And that's all we have for this one, folks. Thank you for tuning in again to another episode of Bricks and Risk. See you next week. Thank you for joining us on another episode of Bricks and Risk. Our goal is that you walk away with one or two valuable nuggets, and we greatly appreciate you sharing your time with us today. You can find all BR episodes on Spotify, Apple Music, YouTube, and anywhere else you get your podcast content. Until next time, keep learning and keep growing.