Uncaptive Agency: The Future of Insurance, Ep. 20

Join me as I discuss how to make an insurance agency grow exponentially with Kyle Beggs, CEO and owner of RCI Insurance Group.

Kyle was named one of 42 Young Guns in insurance by the Business Insurance America Magazine due to the really aggressive growth in his career, and we will be talking about his best practices.

The insurance industry is evolving fast, but there are still several constants. “Young Gun” Kyle Beggs credits his explosive success to a mix of the new with the timeless: technology and people. Listen as he explains why it’s not enough to have an Agency Management System and a CRM - accountability and good use are paramount to getting results.

Hiring is usually a problem for insurance agency owners, but Kyle does not have issues finding and onboarding great new talent. He tells us his hiring strategies and training tips for attracting and retaining great insurance talent. If you seek aggressive growth for your independent insurance agency, this discussion will bring you lots of insight.

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Tony Caldwell:

Hi everybody, it's Tony Caldwell, and welcome to another episode of Uncaptive Agency. This morning, I'm really excited to have a longtime friend of mine, Kyle Beggs, joining us. Kyle is the CEO and owner of RCI Insurance Group, which is located in Northeastern Oklahoma. Kyle is one of 42 Young Guns in insurance, named for the last couple of years, as a matter of fact, by the Business Insurance America Magazine. And he's been named a Young Gun because he's had a really aggressive growth in his career, and we'll explore that in just a minute. Kyle, I'd like to have you just give us a brief introduction about yourself and your agency, and then we'll jump into the future of insurance as you see it. Welcome Kyle, and give us a little thumbnail.

Kyle Beggs:

Thank you very much, Tony. I started insurance right out of college. I started actually, with a captive, State Farm, and kind of learned the ropes there and ended up getting the opportunity to come on the independent side. One of my best friends, his dad owned an independent agency and was constantly trying to get me to come over there. I didn't really want to look at it too much, because I was focused on what I was doing there. But thank goodness, sometimes you don't know what you don't know, and so thankful that I took a couple of meetings and learned more on the independent side. And back in 2012, I came over to RCI on the independent side as just an agent producer, and man, never looked back. I absolutely love it.

Tony Caldwell:

And you bought RCI, what, in 2017?

Kyle Beggs:

2016.

Tony Caldwell:

2015. Okay. Time flies. I know since then you've done at least one other acquisition, growing the business through acquisition. But really, your main growth mechanism has been organic. So real quickly, thumbnail sketch about the agency. What do you guys specialize in? How big are you? How many employees do you have? Where do you operate?

Kyle Beggs:

Yeah. I think now with the new acquisition, I think we've got a little under 30 employees right now. We're, I think, at 28, 27, something like that. Kind of like you mentioned, we did acquire an agency this last year. Not necessarily for growth, but just to help us be a one-stop shop. The agency that we bought had a full principal, financial planner that we brought on in February. They do 401ks and buy, sell agreements and things like that for any of our clients. And then they also had a full benefits group, which we did not do any benefits whatsoever. And a number of times on those large accounts, they want a one stop shop. And so, we acquired them back in August and are really excited about that. They're out of Pryor, which is my hometown.

And then just to tell you a little about RCI, when I first came here, we actually had all of our eggs in one basket. We were 90% hotel and 10% all other on the commercial side. My goal when I first got here was to do anything but hotels. I wanted to really try to diversify us if I could. And so we focused on manufacturing, contracting, are probably our two major ones. And then I'll still do a number of hotels as well.

Tony Caldwell:

Okay, thanks. Kyle, we're talking about the future of insurance distribution and really looking out about five years. I've talked to people all over the industry and all over the country, all of whom seem to be very optimistic about the future. Obviously, you are as well. I mean, you're a young man really early in your insurance agency career, so you've got to be optimistic. But tell me why, why do you feel optimistic about the future of the business?

Kyle Beggs:

I think it's just the approach honestly, Tony. I kind of look at it, I've never been afraid of a challenge and I love challenges and to be challenged. And so, I've kind of expressed it to my team that we can either adapt and grow with what's going on with technology and where the insurance is going as a collective whole, or we can be the blockbuster that kind of sits there and says, "Hey, we're going to do it the way we've always done it." And I think you know what happened to Blockbuster. I think that the biggest thing is if you look at those companies over time as technology and things have grown them past forward, that those people that have adjusted and grew their ratio within that or whatever business they have, have been very successful in those times. A lot of times in those times of chaos or times where people are worried is usually when you can do your best, in my opinion.

Tony Caldwell:

You've mentioned technology and you also mentioned trouble times. I want to talk about those both separately first. From a technology perspective, what do you think is the most important technology that you've got in your agency now that's attributable to your success? And then kind of part B of that question is, what do you think that you're going to need to do in terms of increasing your technological usage or whatever, however you want to describe that, over the next two or three years? How does technology need to change for you to keep growing?

Kyle Beggs:

That's a great question. When you ask me that, I have a number of things I think about, and trying to pick what would be the most important thing, it's tough. Because in today's world, there are so many different technologies and different things that we use within our agencies. There's not just one. But I would probably say technology-wise, they are Applied Epic. We use that so much as far as just our marketing, as far as RAC management. There's just so many little things that go into that, and so thankful that we upgraded to that, and in my opinion, got the Cadillac of agency management systems. I feel like that's been a huge advantage for us. I think a lot of agencies have trouble training and onboarding and bringing new talent into this industry, and Epic has done a great job of allowing us to not only train and onboard, but also try to get our policies and procedures in place.

Tony Caldwell:

Interesting you mentioned the Agency Management System, because it's not very sexy, obviously. I mean, everybody has one. But one of the things that I've observed is, that a lot of what I'll call local insurance agency, main street insurance agencies, when they get purchased by one of the PE firms or national brokers, and those guys are buying agencies every day, they typically are criticized because they're not really using all the capabilities of the agency management system. Especially from a data perspective. It sounds like that's something you're really focused in on. How do you make sure that you're getting all of the benefit out of the technology from that system that's there? How do you go about training and managing team members to make sure that happens?

Kyle Beggs:

Great question, because that's something that I think we in our executive team is constantly trying to work on and see what we can do. I feel like we do a great job utilizing our management system, but I still feel like there's so many different ways that we could even utilize it more. One of the main things that we do is just accountability. We try to have a weekly meeting with all of our account managers and processors, and just going over, "Okay, here's activities we need to be using. We're following through with this. Hey, when we're billing from the agency, here's how we need to do it." It's just a constant reminder.

Every Monday we have a sales meeting within our agency management. There's a dashboard that shows what's coming up for renewal, how much new business they have in the pipeline going out three, four, six months out, what their loss ratio is, and how well they're closing on it. Even our producers outside the agency, it's a big help because when they're using; we make sure that every Monday we're hitting that system and what they're working on and what they're doing. And we also want to make sure the sales meetings aren't what we call liars club, where we can really go in there and see what guys are doing and we're out there hustling and getting after it.

Tony Caldwell:

Okay.

Kyle Beggs:

But long story short, really just holding people accountable. Weekly, we're going into that system and everybody's using it.

Tony Caldwell:

Okay. So the agency management system is really an accountability system. I like that. I haven't heard it necessarily described that way. I really, I like that. So aside from the agency management system, which again, every agency has one, and you mentioned some things that it's doing for you from the standpoint of a customer relationship management system, but do you have a separate CRM system that you use in the agency?

Kyle Beggs:

We do. We do. We have a system that we'll send out birthday emails or we'll send out; another thing we've really tried to do is automate. Anything that we can automate, we've tried to do that. I have an automatic email that goes out 120 days to the client that says, "Hey, your renewal's coming up. We would need to get updated numbers. We're going to try to do our very best to get this out to market and do our very best for you." Yeah, we utilize that quite a bit. From birthday reminders or just even the renewal that's coming up.

Just to give you an example, the crazy weather we've had this last week. We put out things about how to protect yourself and protect your house or your business in times like this, because we're not always used to weather like this. It's a great tool for us. I mean, we've even used it when we acquired the other agency. We shot out a blast saying, "Hey, by the way, we're able now to do any of your group health and 401ks. And if you ever need help with that, let us know." And we got a number of people that came back to us and wanted us to look at that stuff for him.

Tony Caldwell:

Okay. One of the things I think our listeners will really be interested in, Kyle, is your approach to talent. You mentioned earlier that everybody's got a talent issue. And certainly with over half of the employees of the independent agency system eligible, from an age perspective, to retire over the next five years, finding new people to come into the agency is job one. And you've been really successful with it. Not just in recruiting producers, but also agents, personnel, administrative, and clerical, and so forth. What are you doing? What's different about your approach at RCI that's given you the success you've had in bringing new people into the business?

Kyle Beggs:

I think that one, I don't really put a box around it. I feel like so many people in this industry, I remember we brought on one of the ladies that I've worked with for a number of years and been in the industry for a lot of years, and had some great experience. We brought on a male for a position, she thought, "Well, no, this is only females only." People constantly try to put boxes around it and I don't believe in that. I just believe in great people, period. Go find great people and everything else will take care of itself if you've got the right training and the right procedures in place to help them, guide them along in that area. I don't even necessarily look for people that have a ton of insurance experience. I mean, if we can find a great account manager or even a great agent that has that, then great. But isn't necessarily? No. Because again, I just want great people that fit our culture and what we're doing.

Tony Caldwell:

How long does it take you to train an account manager so that they're really productive?

Kyle Beggs:

Man. It depends. A lot of times we'll bring someone in maybe from, that has a little bit of experience maybe from personal lines or has some processing experience, so it's a loaded question, Tony. It depends. But I'll just tell you, if it's someone coming in straight, fresh, a lot of times we'll try them out as a processor with an account manager team going side by side with them, kind of helping them through their day to day. And then we kind of promote them up to what we call a junior account manager, to where they're almost doing all the functions, but a senior level is overseeing it. And then eventually, we promote them up to account manager. And honestly, it depends on the person. You've got some people that can pick it up within maybe two years or so, and then you've got others that it takes a little bit longer. It just depends on the person and their learning method.

Tony Caldwell:

Okay. And you've been especially good at recruiting and developing new producers. How many producers now in the agency? 28 employees, how many of those are producers?

Kyle Beggs:

Five, six, seven. Eight. Eight. I'm sorry. We have eight. Six including, and then we've got two of the agencies that we've bought out. Two that are still active and produce as well.

Tony Caldwell:

Gotcha. All right. Do you have a goal that you have for new producers every year? Are you trying to hire a certain number or how does that work?

Kyle Beggs:

It kind of depends on our growth. For a while there, we were hiring a new agent about once every, once a year we would bring someone on. We're actually looking at, for the first time, bringing on two guys at once to compete with each other. And that's something I've wanted to do for a while, because I've always heard good things about that. But also, I'm very, very hands-on with the training of our agents and producers. Because again, I can sit there and say, "Man, I'm not second or third generation. I'm first-generation. I don't have a bunch of gray hair and sit here and say I've been doing this for 40 years and here's how I did it 40 years ago." Now, I've cold called and worked my way to this, to where I'm at, in seven years, by just getting after it. And so, I think the thing that's appealing to a lot of those guys, is that I can sit there and show them, "Hey, if you'll follow this path and do these things, you'll be crazy successful."

Tony Caldwell:

Yeah. Okay. Any thoughts about hiring? You operate in Northeastern Oklahoma, and you have business obviously in the surrounding States and so forth, but have you given any thought to possibly hiring producers that maybe live two or three States away and selling insurance even further afield? How do you think that looks for your agency going forward?

Kyle Beggs:

You read my mind. We're actually working on that right now. We're working on bringing on two guys that are in, actually, not too far away, they'll just be in Arkansas. We've always done in-house training, we've never done that on the outside. So, really excited to see how this works, because I feel like if we can take advantage and to get this figured out and not just do it half-assed, you know? I want to do it to a certain standard. And if we can bring that standard to how we've done everything else, then I feel like that's going to be a huge opportunity for us that we'll just get started on. Because I would love to expand to some other States.

Tony Caldwell:

Okay. If that works, there's no limit for you, right? You can go anywhere.

Kyle Beggs:

Correct.

Tony Caldwell:

What role do you think that Zoom and other kinds of video conferencing, video communication technology, what does that do to that ability, from your perspective?

Kyle Beggs:

I kind of talked about the accountability aspects, we're able to have those sales meetings, still have those guys plug in from anywhere else. And I think the thing that probably separates us is our training and our hands-on approach. It still allows us to have that hands-on approach. I remember talking to the gentleman I bought out, and he's just like, "It's amazing to see what technology has taken this." Because 20 years ago you couldn't even think about these things, but now you can easily accomplish a lot of these. And I think we're seeing it through COVID, people being able to work from home or being able to set up Zoom calls like this with clients or even your team members.

Tony Caldwell:

I wanted to ask you about that. COVID has been a tragic event for, obviously, hundreds of thousands of people in the country and worldwide, and been really hugely disruptive for many businesses. But at the same time, it's presented real opportunities for growth and development for many other businesses. What's it done for you? How have you reacted to COVID in terms of modifying your business and taking yourself to the next level?

Kyle Beggs:

I think he goes right back to that Blockbuster thing we were talking about earlier, and it's just adapting. You have to be able to, ready to adapt and roll with anything that's out there. And gosh, never would have dreamed we'd be, this is what we'd be dealing with a year ago. We had everybody set up to be able to work from home. We were able to keep everyone kind of rocking and rolling and productive, which was a big deal for us. Because we had a number of our other peers or people that were shutting down, not able to do that. The other thing that it causes that we were able to do, we're doing a lot more Zoom meetings or on the phone renewals or new business.

And that's been different to get used to, because I'm a very relationship driven person. I love to go meet people and be out there in front of them. It's one of my favorite things about this job. But in the same token, I can promise you that I can see a lot more people over Skype and be a lot more efficient doing it this way than driving to Oklahoma City and driving back, where I can maybe fit in one or two appointments. If I'm doing it this way, man, the efficiency is off the charts for what you can, how many people you can meet with. And still, you're able to have that eye contact and really have that personal feeling as well.

Tony Caldwell:

I was on a call last week with a bunch of entrepreneurs from around the country and we were talking about how much time COVID has saved us, largely from not having to travel. And you just mentioned that, driving. My estimate was that I probably have almost doubled my productive time because of COVID and the lack of travel. What would you say that you and your team in general have gained from an efficiency perspective?

Kyle Beggs:

It's hard to say, put a number on that, honestly. But I can tell you that it's really opened us up to be more versatile. I can't put, probably, a specific percent or number on it, but we're just way more versatile than we ever have been. Even from, people working from home and being able to work through that, or just being able to work with our clients and meet them at their needs and where they're at.

Tony Caldwell:

One of the things that people are always afraid of in our businesses, is that carriers, and they certainly have a lot of cost issues right now, may cut agents and compensation. They've done that certainly over the last 30 years. But it also seems that both technology and a new way of working, and we've talked about Zoom and working from home and working remotely and all those kinds of things, are increasing efficiency. I know you're a numbers guy and you like to benchmark, your agency benchmark, the dollars that the different people in the organization are creating. As you think about today, where you are, how much more from a revenue perspective, per person, do you think you're going to be able to do five years from now? And what kind of growth does it look like on a per person efficiency basis to you with technology and all the other things that you're working on?

Kyle Beggs:

Man, I tell you, it's really interesting just to see where things are going with the way the system is. I kind of already talked about, our agency management system has created a bunch of efficiencies for us. We've also used some Vas, virtual assistants, that have been some big help on the back end in the processing, the helping. I really think that those books of business that are handled by those account managers, I mean, I think you could easily see a 20 to 25% increased capacity. Which is huge. That's a huge deal, those account managers being able to handle what they've been able to handle. Even in our agency, we've just seen a big difference in our efficiencies.

Tony Caldwell:

That's an interesting number, and obviously, it's one that the people who are buying insurance agencies are counting on, right? They're buying agencies that are maybe less efficient because they haven't adapted to technology, haven't adapted to new ways of work, and then creating that adaptation, wringing out the dollars to the bottom line, and using it to pay off the agency. And so obviously, agencies that are able to do that are going to be much more competitive in the future, because they're going to have more of the bottom line to work with. Do you think you're going to get the same kind of increase in bottom line results that you get in efficiency? I mean, does it translate directly to bottom line or is there something else with that?

Kyle Beggs:

It depends. At the end of the day, it's money in and money out. If you're getting those types of efficiencies, you're going to add more to the bottom line. But I also think it's a matter of where you're at in your agency. With me where I'm at, yeah, it helps with the bottom line and doing. But I'm focused on paying off debt, so a lot of times I don't really necessarily see that. If it goes, I'm just taking it right back out and trying to work on getting out of debt and paying off the agencies that we've purchased. So yes, absolutely it makes a difference. And I think down the road, we'll see that more when we're out of debt and working through that. But no, I definitely think that those efficiencies you can see, it's just a matter of where you're at in your agency and what you're doing with them.

Tony Caldwell:

As we look at the future, obviously one of the things that's happening is there's an increased rate of consolidation. In fact, recent estimates are that there's only about four years of investible agency supply for the voracious demand of the folks buying insurance agencies. And so, there's a hollowing out that's taking place in the middle, right? Because the agencies that are getting bought up typically are a million dollars in revenue and up, and those agencies are disappearing all across the country. What we call the local independent agency, that stalwart member of the community.

Now they're just an office for a large national concern. But those large national concerns bring huge resources to the table for insureds and have incredible competitive capability. And they're also able, because of their size, to attract really, really good people. So again, your early days in your career, that's your future, competing with those folks. How do you do that? How are you thinking about the evolution that your agency has to go through in order to stay competitive with what admittedly, are increasingly sophisticated businesses?

Kyle Beggs:

I think it's a great question, but I think it's one of those things that one, you've got to work with your partnering companies. A lot of those that lost control, a number of those things that they offer, your partner companies offer as well. Now again, they're not going to do it for a $5,000 bop, but if you've got these large commercial accounts you're working on, I encourage you to get with your partner companies. There is amazing resources that they offer that are right there at your fingertips that a lot of people don't even realize or think about. And so my number one there is, use the resources you already have that you might not even realize are available to you.

And I think the number two thing within that is that, kind of like we've talked about this whole podcast, learning to adapt with the future and change with technology. But also feel like, that even when you read the surveys of just across America, people don't trust insurance companies. If you really go look at all the statistics, people do not trust insurance companies whatsoever, but what they do trust is insurance agents. And so, it's amazing to see the difference in that.

And I think that if you, as long as you're focused on adapting with the technology, as well as always having that personal relationship, people are always going to do business with who they like. And if you don't trust insurance companies, it's going to be tough to like them, you know what I'm saying? And so I feel that, yes, you've got adaptive technology. You've got to use the resources that you have, which a lot of people aren't, they're kind of doing it the way they've always done it. But I also feel like that personal touch, that true relationship, that person that's involved in this community, there's always going to be a place for that.

Tony Caldwell:

Yeah, really, you've kind of answered the question I was going to ask next, but let me just make sure that there's nothing else you'd think about. Everyone is, for the last few years I think, really interested and concerned about the future of what technology, consolidation, all these things, are changes to what's a fairly traditional agency. So what does it change? What are the fundamentals on which anybody can build a successful business in the United States in our industry, that don't change? You mentioned one, relationship. What are the others?

Kyle Beggs:

I think really taking care of people, I think that's always going to be a mainstay in this industry. And I think that, yeah it's changing and it's changing faster than it ever has, but I also feel like with change and lack of understanding, which is, our industry is notorious for making it harder than it needs to be, I think there's always going to be that bridge or that need for the agent, for someone to sit there and talk to that customer. You even talk to the younger generation that doesn't like to be on the phone as much, but it's amazing how many times that they still want to have, call in or make sure that everything's right on their insurance. They still want someone to talk to. Now, are they going to call you every month? No. But they still want, when the claims happen or the ships are down or they're going through something, they want someone they can truly trust and talk to you. And I don't think that's ever going to change.

Tony Caldwell:

Yeah. As you think about yourself and your agency in the future, what do you think the number one differentiator for RCI Insurance Group needs to be for you to keep growing at the pace you've been growing at?

Kyle Beggs:

Honestly, it sounds simple, and probably not real catchphrase, but it's people. I think, honestly, finding great people. One of my favorite songs is called Superstar. And basically in that song, he talks about that, "Hey, if you are what you say you are, if you're a superstar, hey, the cameras are here, the microphones here, the stage is right there, the crowd's waiting. Go get them tiger." And so, I feel like as an AC owner, it's always my job to present the stage. I want to give these guys the absolute best stage possible to perform. I want the best microphones, I want the best speakers, I want the best stage, the best lighting. I want to include all the stuff in there so they can be successful.

I feel like with what we've, the acquisitions we've done, the agency management system, all the little things that we do, that's that stage, that's that microphone, that's those things. But the biggest key that, you can have all that all you want, but if you don't have great people, it won't matter. That goes hand in hand as a huge part on both of those. You've got to have the stage and be able to take care of them and make them look good to go compete with a lot of those people out there. But in the same token, I feel like if you find the right people, that'll take care of a lot of it.

Tony Caldwell:

That's a great answer. You know Kyle, a lot of people try to over-complicate this business, and I've watched your progress and success now probably for at least a decade, and it's very consistent, very strong growth. And what I think I'm hearing today from you is nothing that's particularly remarkable. It's like, "Hey, here's the basics, you got to do really well at those. This is a people business. It's a relationship business. So start with people. Use your technology to hold your people accountable, and be optimistic and forward and take advantage of things that come up." Adapt, as you said. But aside from that, technology and online competitors and all the other things that are going on in the industry, don't seem to be deterring you because you seem to have a very simple understanding about this. Which is, it's a people business. You got to take care of people and they take care of you. With that said, any last thoughts about the future of our industry over the next five years you'd like to share?

Kyle Beggs:

No, no. I'm just excited. I believe in this industry 100%. I'm so thankful that I got kind of thrown into it. I didn't pick it, it kind of take me, I guess. Because I never anticipated being in insurance sales by any means, but man, I love it. Again, I think that, yeah, there's acquisitions going on every day, but I think that's beyond insurance. I mean, you look at pharmacies, you look at physical therapists, you look at a lot of the small businesses are being bought out by big conglomerates. But to me, that provides a lot more opportunity for us to go out there and show what we bring to the table. To really have that relationship. I just will always believe that we're going to service our clients so much better than a big publicly traded company.

I see these people every day, I go to church with them, I go to the restaurants with them. I do all this stuff. It's important to me. It means something to me that I take care of them, doing the right things. It's not for a stock price, it's for my name and reputation and what I want to bring to this community. And so I just feel like, that if people keep that mindset in their head, I think that there's a lot of opportunity for us in the next five years.

Tony Caldwell:

Okay, great. Well, Kyle, thank you so much for being with me today, and I look forward to seeing you in person as soon as that's physically possible. So, thank you very much.

Kyle Beggs:

All right, thanks for having me, Tony. I enjoyed it.

Tony Caldwell: