Helping build the Cross Insurance Agency into what it is today, Royce Cross, President and CEO, reflects upon his ongoing successful career in the insurance business
Royce Cross has spent more than 40 years as a licensed insurance agent, working alongside his father, Woodrow Cross, his brother Brent, and his son Jonathan, in helping to build Cross Insurance into the largest family-owned agency in New England, if not the country.
As the current president and CEO of Cross Insurance, it is fair to say that Royce Cross has been as instrumental in shaping the success of this family-owned agency as has his still active 100-year-old father. (See Agency Checklists’ January 10, 2017, article, “Woodrow Cross, Founder of Cross Insurance, Celebrates 100th Birthday”).
While Mr. Cross grew up with insurance in his blood, it was never an absolute given that he was going to follow in his father’s footsteps. “I never felt like I know this is what I am going to be doing in my life. My father asked me to start out and to try it and I found that I did like it… He gave me good advice,” says Mr. Cross.
That advice meant that in 1970, Mr. Cross joined the Cross Insurance Agency when it still occupied a small office in downtown Bangor. “My father started in 1954 and I joined him in 1970,” explains Mr. Cross. “When I joined there were four people in the agency. We built it up in the late 70s, but during the majority of those years, I worked with my father and brother, and I can’t say enough positive things about it.”
After now more than four decades later, Mr. Cross says it has been a great ride. “It’s been a roller coaster ride, sometimes coasting downhill and other times struggling uphill…it has been a great run.” Most importantly, however, it has been the people that Mr. Cross has been able to meet in the industry that have made it such a worthwhile career for him. “I have enjoyed meeting so many people, it is a wonderful industry,” he explains. “I have often thought about what other industry is there [other than insurance] that deals with so many different people and businesses. Not only in working with them, but in getting to know them and their industries. There really is no other.”
One of the main ways in which Mr. Cross has been able to meet so many different people, has been due to the agency’s many acquisitions over the years.
A long tradition of growth through acquisitions
While some Massachusetts agents may believe that Cross Insurance only recently started to acquire agencies, growth through acquisitions has always been a part of the Cross Insurance business plan. “My father made his first agency acquisition in 1963 and we have bought an agency every year since 1980,” notes Mr. Cross. “We have always purchased agencies,” he adds, “it is only now that people are starting to notice it.”
It was not until 2008 that Cross Insurance made its first foray into Massachusetts. The company which was drawn to the Commonwealth’s marketplace, now boasts 14 locations in Massachusetts alone. And it is still looking to grow here. “It is a great economy,” says Mr. Cross. “It has an economy like no other place to do business, without question.”
As of 2016, the company had acquired over 120 agencies and had grown the agency’s revenue to where its annual commission income has reached $150 million in revenue. Likewise, the staff has grown to over 800 employees located in 35 office locations in Maine, New Hampshire, Connecticut, Rhode Island and Massachusetts.
“When we started we were four and I knew what happened and had complete control. Over the years, I have had to adjust and let others make decisions as the agency has grown,” says Mr. Cross. So even though the company has many more employees than when he first started, Mr. Cross says that having grown with the agency has been key in his ability to oversee the growth of his agency’s staff and operations. And his advice to other agents who need to adjust to a growing agency? “Let others [in your agency] use their judgment, sometimes (more often than not) they do better.”
With that said, we asked why Mr. Cross he thought his agency has had so much success in buying other agencies.
“Nobody knows a family business like another family business”
“People have a lot of choice in selling their agencies, and I think people like a family business,” explains Mr. Cross. “As the saying goes, nobody knows a family business, like another family business.” And this perhaps, has been the biggest selling point for the Cross family. Unlike a hedge-fund-backed buyer that may flip an agency a short time after buying it, Cross Insurance plays for keeps. “When we buy an agency we plan on keeping it,” says Mr. Cross.
Mr. Cross notes that that idea was instrumental in Cross Insurance getting one of its most well-known clients, the New England Patriots. “We do medical, we do property and casualty for the Patriots…they are a nice family,” says Mr. Cross “Jonathan Kraft once told me that his father said to always do business with a family-owned business.”
When we buy an agency we plan on keeping it – Royce Cross
“We have no investors, no outside capital,” adds Mr. Cross. “We run [our newly acquired agencies] like a family business.” As such, Mr. Cross believes that this fact resonates with other independent agencies. “I think they like the idea, that we want to do this for a long time. The next [Cross] generation is coming into the business and so we believe that we can do this for decades…” As such, Mr. Cross believes other agencies feel comfortable selling to an agency, like Cross, that it going to take care of their business.
For those interested in how a newly acquired agency transitions into the Cross family business, Mr. Cross says there is no one model that fits the bill. “It is difficult to have a model. If I were to give you a general answer, I consider myself an investor in insurance agencies.” For example, he says, “A lot of times when we invest in an agency, the former owners or employees want to continue working. So in those situations we do not change a lot,” says Mr. Cross. “We don’t consider ourselves as aggregators, so there is not one way we do things.”
And even more surprising in this day and age, is that Mr. Cross still handles a lot of the acquisitions himself. “With new acquisitions–I meet with them myself,” says Mr. Cross. “I enjoy talking with them. My information is listed on our site and I personally work out of our Bangor office.”
So what type of agencies does Mr. Cross look for in an acquisition?
There are no one-size-fits-all types of agencies for Cross Insurance. “What we like most is a well-run agency. We have bought several boutique agencies, we have done agencies that are high-net worth [focused], benefits only, or those that only cater to certain insurance lines.” says Mr. Cross. But ultimately, it is the basics that matter most to him.
“We pay less attention to the industry and more attention to how [the selling agency] runs a business,” he explains. “You can tell which are the well-run agencies very quickly. We have bought agencies for over 50 years, about 120 agencies of varying sizes. We have bought some that are very small, one recently with just one person, and merged it into another office and then we have bought others with multiple agencies.” So for Mr. Cross, there is no one type that fits the bill.
And as for the future of the independent agency? Mr. Cross is not worried
“I think there will be always be an opportunity for an entrepreneur with a strong work ethic,” argues Mr. Cross. “People that are willing to work hard and be creative, they will always have opportunities.” But, Mr. Cross also notes that agents have to realize that the industry is changing and that they must change with it.
“We [as agents] have to change along with the industry,” he cautions. “In the 1970’s, I can remember agents fighting tooth-and-nail saying that ‘we are not going to direct bill.’ Then it was State Farm and Allstate, who were going to put us out of business, and … now you are talking about Lemonade.”
But ultimately, Mr. Cross believes that the agent who can adapt will persevere. “If an agent can work hard, and change with the times, they are going to find opportunity.”
For those interested in getting in touch with Mr. Cross, you can call Cross Insurance’s Bangor office at (207) 947-7345.