RJF in MN Business magazine July 2007
|
Minneapolis, July 17, 2007 - RJF Agencies grows from selling $100,000 worth of insurance to $25 million in risk management services
Is there any business owner who wouldn’t love being described by a client as “a knight arriving on a white horse?”
That’s how Dan Driessen, CEO and president of Northfield-based Driessen Water Inc., characterizes his firm’s relationship with RJF Agencies. Since hiring RJF, Driessen cut annual insurance costs by 33 percent; reducing annual claims from more than $400,000 to less than $100,000.
In 2001, Driessen, a water treatment company that oversees nearly 20 Culligan dealerships in Minnesota, Iowa, Indiana, Ohio and Texas, had been hit with a pair of six-figure liability claims. One resulted from a head-on collision caused by an employee’s driving mistake and the other was filed after Culligan equipment leaked and flooded a medical clinic.
“We were dropped by one insurance company, and were close to being uninsurable,” Driessen recalls. Then a business associate referred Driessen to RJF. “They took a big risk in taking us on.”
RJF helped Driessen develop a risk management program that included employee background checks, driving record and drug checks, better claims reporting, employee claim-reduction incentives, and manager training.
Driessen says previous insurance agents “would give me quotes, turn me over to an insurance company, and kiss me goodbye. It’s different now. I consider RJF a partner. They know my company as though they are a part of it.”
Results such as those have helped RJF Agencies grow from a one-person insurance agency to a full-service provider offering employee benefits, commercial insurance, alternative risk programs, loss prevention, claim management, human resources consulting, wellness management and financial services. Revenues have grown similarly from less than $100,000 to today’s figure of nearly $25 million. That includes a period from 2001 to 2006 when annual revenue nearly doubled from $12.7 million to $24 million.
That makes the company the 57th largest private agency in the country serving more than 5,000 corporate clients from five offices in Minnesota and Wisconsin.
It’s not just present – and potential – clients who are taking notice though.
Last year, the suburban TwinWest Chamber of Commerce recognized RJF’s success, naming founder and CEO Bill Jeatran Entrepreneur of the Year.
And the company followed that up this year as they made the list of finalists for the Ernst & Young Entrepreneur of the Year award in Minnesota.
Jeatran says the culture of the company has always been one of mutual respect and that employees not only want to do the best they can for their client, but also for each other.
He is diligent and deliberate about hosting various team building activities such as barbecues, parties, athletic events and an annual retreat, and the CEO also conducts monthly meetings with all employees and gets to know them better by lunching with them in small groups as well.
But just because he sells insurance don’t accuse him of being boring.
“I just realized recently we didn’t have any ‘fun space’ here in our offices,” recounts Jeatran. “So we have hired a designer to come in and create some fun spaces and look forward to that fostering an even more supportive culture with our staff.”
RJF client Buca di Beppo, the Minneapolis-based restaurant chain, certainly didn’t think injuries on the job were fun for anyone.
Rich Erstad, Buca’s general counsel, says RJF has been working “to help us develop and implement a safety culture,” and reduce the personal-injury accidents that are a perennial problem in the restaurant industry. The effort includes tracking incidents and losses at each Buca outlet nationwide. The program has already enabled Buca to put the brakes on rising property, workers comp and general-liability insurance rates, he notes.
RJF founder Jeatran, 47, began his insurance career in 1982 with a four-year stint in the Twin Cities office of industry giant Aetna. The experience whetted his appetite for small-business entrepreneurship.
“In a large company it took days or weeks to make an impact. I wanted to move more quickly, and create innovations and solutions at a pace that was reflective of clients needs. I realized the only real way to do that would be to start a company where I could lead, innovate and create effective change.”
In 1986 he acquired a small, Edina-based insurance agency from its owner, who was retiring. Two years later, Jeatran took on a partner, Tim Fleming, now RJF’s president. At that point, the two-person agency was, “like most startups, trying to figure out how to survive, and then put a business model behind it,” Jeatran recalls. By 1998 the firm had 30 employees and $3 million in annual revenue.
Then a significant growth spurt posed some different types of challenges which RJF apparently handled well.
“Around 2000-2001 we passed the 100-employee mark and realized we needed to focus more on our core businesses, building infrastructure and adding leadership. At one point, one of our managers had 65 ‘direct reports’, and we just thought that was normal.” Like many entrepreneurs, Jeatran and his managers were scrambling “to learn what we didn’t know.At that stage, I was reading about one leadership book a week.”
Realizing the firm had made “a significant leap” in size and complexity, Jeatran hired an organizational development consultant that he still works with today to provide guidance and to help him match his own learning curve with the growth of the company.
“We believe if we can provide a ‘solutions’ or ‘value’ approach to our clients, and focus more on how we can help them versus what we can sell them, we will create a more aligned, valued and trusting relationship. Like all businesses, if you sell on price, you will eventually lose on price. But if you can deliver true value to your clients, it creates a long-lasting partnership.”
RJF’s “value-added” approach is not a recent phenomenon, he points out. “The insurance industry has been stereotyped as a commodity business. But, from the beginning, we did not want to be perceived as a vendor selling a commodity. We wanted to be a respected, trusted adviser to our clients.”
Of course, providing more services requires more investment in resources.
“Our platform is expensive to build, since it involves adding a lot of new resources and talent. Because it is such an investment, a lot of insurance agencies don’t make that paradigm shift from selling a product to selling a risk management platform.”
Jeatran says he has been finding a number of middle- market customers who have significant risk but don’t have the internal resources to manage it. That could be a 300-employee or 2,000-employee firm. He explains that a client who has been paying $250,000 in premiums may only be focused on the incremental cost of those premiums; but the drivers of premiums are the claims and risk factors. So they focus on trying to mitigate risk factors that drive costs.
RJF’s other fast-growing area of business has been benefits consulting, especially helping clients reduce health-related costs. It accounts for about 25 percent of RJF’s revenue, growing about 17 to 18 percent annually. Those services include wellness initiatives, he notes.
Going forward, Jeatran projects a doubling in revenue within five years, to the $40-$50 million level.
“All entrepreneurial companies go through life cycles; the most successful of them go through a reinvention phase.We’re now going through part of that.” RJF has recently been engaged in “a practice group initiative and structure,” he notes,” in which all of our resources and expertise are being aligned based on our existing client base and target markets.”
Still, once that process is finished, it won’t be the end of the reinvention and evolution of RJF, Jeatran promises. “We want to continue to add resources so that as our clients’ needs grow they never outgrow us.”
-Dan Emerson