Vaughn Graham is the President of Rich & Cartmill, an agency headquartered in Tulsa, Oklahoma. As this year’s President of the Independent Insurance Agents and Brokers of America, (“IIABA” or “Big I”), he came to Boston to swear in the new officers of the Massachusetts Association of Insurance Agents at the association’s annual Big Event, which took place at the Marriott Hotel in Copley Square in late October.
Thanks to the good offices of Springfield’s Joe Leahy, Chairman-elect of the IIABA, Agency Checklists had the opportunity to speak with Mr. Vaughn about his history in the insurance industry, his goals as president, as well as the future he sees for independent agents.
Mr. Graham, thank you for taking the time out of your schedule here at the Big Event to talk to us.
You are welcome. I appreciate the opportunity to speak with you.
What message would you like to convey to Mass agents during your stay in Boston?
I think that it is important to make sure that our members in Massachusetts know that their volunteer leadership team understands and is listening to what their needs are. Also, that we are laser-focused, on providing that sustainable, competitive advantage that keeps them independent and not only helps them compete, but also helps them increase their market share here in Massachusetts.
How did you career in the insurance industry first begin?
Well, I was actually in law school and recently married, when I decided to quit the law and return to insurance. I had worked before going to law school in the claim department of a regional insurance company. I thought law school would be a needed change, but I soon came to the realization that this was not for me.
…the lessons that I learned from that initial rejection were invaluable. I did not burn any bridges, did not shoot my mouth off, and did not create any unintended consequences. I am quite certain that had I not done that, I doubt that I would be president of Rich & Cartmill today.
I talked with the director of agencies at the regional insurance company where I had worked before and he helped me get an appointment with the leading independent agency in Tulsa, Rich & Cartmill. This agency had been founded by two men from Illinois, Irwin Rich and John Cartmill, in 1922. They had come to Tulsa to start an insurance agency focused on the oil industry in Oklahoma.
I interviewed with four out the five of the agency’s principals and was feeling pretty good about how I was doing. I, however, will never forget my fifth interview. I had not even sat down on the couch at the end of his long office when he said, “We are not hiring you.” He went on to say, “It does not have anything to do with you. I have got a son who is graduating from college next year and another son in two years. They are going to join the agency, and you are not related to anybody here, and we cannot afford all three of you.”
When I got shut out on my fifth and final interview, I was crestfallen. Fortunately, however, I got another opportunity to join an independent agency on my next interview at Fred S. James, a national broker at that time. After my time with James, I left to start my own agency and joined with two other friends who left James at different times to start their own agencies. We joined forces, but after about, oh, I would say 15 years together, we reached a plateau.
Jump to January, 2003. In an ironic turn of events, we quite literally picked up our customers, our agency staff, and moved in with the Rich & Cartmill Insurance Agency. They did not acquire us; we did not acquire them. We just became a part of Rich & Cartmill, a consolidation if you will, and went in as shareholders of Rich & Cartmill. A couple of years after that I was elected president of Rich & Cartmill.
Fast forward to circa 2005, when I met the same gentleman who had conducted that fifth interview with me, about thirty years.before. By then, the gentleman had essentially retired from the agency for health issues. His name was Jack. We were at the offices of Rich & Cartmill and I said, “Jack, did you ever think that 30 years ago, the kid that you would not hire at Rich & Cartmill is now president?” He got all embarrassed it seemed and then finally said, “Nope, never did,” and then turned around and walked off.
I always like to tell that story to the next generation. I was 26 years old, a college graduate who already had a pretty good dose of law school and the disciplines necessary for that, and then coupled with the fact that I was blessed to have a fairly good insurance background from the claim side in understanding policy provisions and coverages Nevertheless, the lessons that I learned from that initial rejection were invaluable. I did not burn any bridges, did not shoot my mouth off, and did not create any unintended consequences. I am quite certain that had I not done that, I doubt that I would be president of Rich & Cartmill today.
Could you tell us a little bit more about your agency, Rich & Cartmill?
We are privately-owned agency with twenty-one shareholders, who are all equal in shareholder value. There are no lead dogs and we all pull our own weight.
We are a full-service agency in property-casualty, employee benefits, life health and risk management. We have offices in Indiana, Missouri, Kansas, Colorado, and our two largest offices are in Oklahoma, where Rich & Cartmill started in 1922. As of the first of the year, 2018, we have a group of insurance professionals in an agency who are going to be consolidated with us just like when I joined Rich and Cartmill. That consolidation will give us as a footprint-wide population of over 200. We will have, at that point, 92 producers with the rest consisting of support staff.
One thing which makes Rich & Cartmill somewhat different from other insurance agencies, as I found out in my first interviews, is the hiring of family members. This has been a long-standing practice in the agency, which I have to say, has worked very well. My son who had been a commercial lender for a regional bank joined the agency in 2009 and his decision to join the agency not only has worked out well for him, but for me, and for the agency.
How did you first get involved with the Big “I”
I attended my first Oklahoma Young Agents Committee (YAC) meeting about 37 years ago, in the very early ‘80s’.
And now you are President. What will your main focus be this year?
A couple of things. I mentioned we, Joe [Leahy] and I, and frankly every member of this Executive committee leadership team [of the Big I] are all working agents. We understand the issues that we hear from our membership.
So this year, we are going to be laser-focused as a leadership team on continuing to create a sustainable, competitive advantage for our members in everything that we do. That means doing everything we can to help position independent agents in the marketplace, to compete effectively with direct riders and captive agency companies, to retain and actually increase our member agents’ market share and by that I am speaking specifically about our independent agent brand Trusted Choice and www.trustedchoice.com.
The other area of focus will be on membership. As an association, we recognize and understand the fact that our current membership base has some particular views of what they expect from IIABA. We understand that the things we did 10 years ago may not be as applicable today and certainly into the future.
Along with that, however, it is also important to identify and communicate with the next generation of insurance professionals who will become our members, hopefully, in order to find out what they want in an association—such as the Big “I”.
Candidly, the reasons why they would join the IIABA are much different than why Joe [Leahy] or I joined. I mentioned about having in place products and services that help agents remain independent and increase their market share in their respective areas. We can be the very best at all of that, and yet if we have no members, it is a moot point. So, developing those products and services to enable them to gain market share is very important to us at the Big “I.”
We also are continuing to implement Big I’s three year strategic plan, focusing on areas of delivery to agents of timely effective communications, member programs, products and services, and identifying and recruiting and developing talent for our businesses today and our industry tomorrow.
If you had to give one reason why an agent should become a member of the Big I, what would it be?
The insurance industry, I would argue, is as heavily regulated or more regulated than any other industry in the United States. The reality is that our industry can change in the blink of an eye by the stroke of a pen in Washington, as easily as it can be done in Oklahoma City or in Boston.
Oftentimes, these changes are enacted by well-intentioned, well-meaning elected representatives, who really have no earthly idea of what they are proposing or what they are voting on, and which can drastically affect folks in Massachusetts, Oklahoma or in any other state.
I think our collective advocacy, as the Big I, on industry issues is critical. We are going to be faced in the future with autonomous vehicles. How does that affect the insurance product that is historical? There are a lot of different ramifications. The Insurtech companies that are proliferating now—how will they change how consumers purchase and consume insurance? How will it affect the insurance professionals providing it? How will it affect the legal system? There are a lot of implications to all of these issues. In my view, our voices are strongest and loudest when they are heard collectively through our association rather than when they are heard individually.
How do you see the Big I helping agents to deal with all the Insurtech initiatives directed at sideling or eliminating the independent agent?
The Big “I” is addressing those areas, particularly from a competition standpoint for agents everywhere; through our TrustedChoice.com platform…it used to be hard for those starting their [insurance] research on the internet to find an independent insurance agent in Boston or wherever, but with TrustedChoice that is changing rapidly.
On another front, The Agents’ Council on Technology should be the independent agents’ source for everything technological…the Agents Counsel for Technology or ACT, is always looking for ways to help agents work smarter, save time and market our services. With work groups made up of agency and carrier representatives, tackling issues such as mobile strategies and real time, ACT creates white papers, offering agents guidance on everything from social media and carrier interfaces to securing client data.
It is available as part of an agent’s Big “I” membership and can help agents understand all the technological phenomenon that is coming at them, and us as an industry, at warp speed.
What is the Big I doing about the cyber risk to agencies?
I am concerned about the time when thieves figure out that independent insurance agencies are not just low-hanging fruit, but ground-rubbing fruit. There are so many agencies ill-prepared for a breach. It will happen, and it is just a matter of time when and how bad it is going to be. I am very concerned that a lot of these agencies that get hacked will not be able to survive—if only because of the financial consequences of just complying with their individual state’s notice requirements for data breaches that are in addition to any federal notification requirements.
We are addressing those issues. We are providing the products, the services, the expertise …to help independent agents protect themselves more effectively.
A lot of prognosticators are predicting the demise of the independent agent, how do you see the future role of this service industry?
Well, I am most excited about our future as an industry. At the Big “I”, I think that we have leadership in place that understands the issues that independent agents face all over the country—things that these leaders are often dealing with the same issues in their own agencies. So, the leadership of the Big “I” has the experience and the ability to help guide our Trusted Choice independent insurance agents into the next generation.
We look forward to you having a successful year as president of the Big I.