Many of our readers may already be familiar with the name Joe Leahy. The co-owner of Leahy & Brown Insurance Realty, a successful independent agency in Springfield, Mr. Leahy has been a standard bearer for independent agents across the Commonwealth first for his work with the Massachusetts Independent Insurance Agents, as a director and most recently as the state representative to the Independent Insurance Agents of America, (“Big “I””).
Mr. Leahy, who is currently the vice chairman of the Big “I”, will officially take over as national chairman of the association in 2018. True to his roots, Mr. Leahy already has already secured that the Big “I”‘s national convention, during which he will be officially inaugurated as chairman, will be held in his hometown of Springfield.
Agency Checklists had the opportunity to speak with Mr. Brown during a break in his busy Big “I” travel schedule.
Joe. Thank you so much for agreeing to give Agency Checklists your perspective on the American Agency System, the MAIA and the Big “I”.
Glad to do it.
Our readers will be very interested in hearing about what you have been doing and where you are going with the Big “I.” But, first, how did you get into the insurance industry?
I was at the State House, where I was running the Senate Office. The Senator I was working for was a good friend of mine, Marty Reilly. We had grown up together, went to school together, and played hockey together. Marty had gotten an offer from an insurance agent to become part of a new agency and I ended up being included.
What was the new agency you went into?
We formed an agency and bought out an ERP [Exclusive Representative Producer]. That was the start . Then I ended up out on my own in the late 80s. My wife and I started our agency from scratch and built what we have now with Leahy & Brown.
On your agency’s website the full name is “Leahy and Brown Insurance and Realty.” Is the “Brown” in the name your wife?
Correct.
Is she an insurance agent too?
Yes. She handles the real estate end of the business. I am 99% insurance. She also, thank god, helps on the insurance end.
How many people work at the agency?
We have got four people all together.
How did you become involved with the MAIA?
It was back in, I would say, the late 1990s. I was sitting in my office, one day, and they said somebody wants to talk to you. It was Frank Mancini. I knew both Frank and Dan [Foley] from my days at the State House, because Marty Reilly sat on the Insurance Committee. Anyway, Frank was asking if I would consider becoming a board member of MAIA. They had an opening because the person leaving the board was from Western Mass and so Frank wanted to fill it with somebody else from Western Mass. That is how I got into the association end of the business.
How long were you with the MAIA? Did you stay there until 2005 or longer?
Well, it was a little bit longer. When I first joined, I was a board member. After having been a board member for two years a couple of the guys, who were on the executive committee at the time, approached me and asked me if I would consider moving on to the executive committee. I thought about it and I did it. I went through the MAIA chairs. I was chairman in 2005 and past chairman in 2006. I was off the board in 2007 but they came back and were looking for help raising money for our political action committee, so I did that for a year.
You also served as a national director representing Massachusetts on the Big “I” board of directors?
Yes. Vince Sylvia was the Massachusetts national director and he was terming out and leaving the Big “I”’s board of directors. Again, some people said to me, “Why don’t you run?” So, I did and won. That was in 2008. In 2013, I ran again for the Big “I” Executive Committee and won.
How many directors are there on the Big “I”’s board of directors?
We have 51. One from each state plus the District of Columbia. Then you have, on the executive committee seven members: Three at-large members, a vice chairman, chairman-elect, the chairman, and the past chairman. Overall, on the executive committee, you have seven years to go through all the chairs.
Where are you in the seven-year progression?
I am vice chairman now. In two years, I will be sworn in as national chairman.
What is the role of the executive committee at the Big “I”?
Basically, the executive committee runs the association. The board of directors is there to vote on the budget and approve proposals from the executive committee. But the executive committee works closely with the staff and our CEO Bob Rusbuldt. We spend considerably more time with Big “I” business than I did when I was a director. Basically, the board of directors approves the budget, but the executive committee works closely with the staff and with Bob on the day-to-day operation of the association.
In preparing for this interview, I noticed the committees and position you have held at both the MAIA and the Big “I”. How do you find the time to run your agency?
Thank god there is technology. Truthfully. I am now in a position as vice chair and I am doing a lot more travel. Today is not like the old days. I mean, I can hit the hotel and I press the button on my computer and it is like I am sitting looking at the screen in my office. Travel is very time consuming these days, especially with airlines, but I can do a ton of work while I am on the road. That is number one. And, number two, I have a great staff.
About how much time do you spend on Big “I” work now per week?
It all depends. On the executive committee, we each have certain committees that we are the liaison to. Some are much busier than others. When I was an at-large member it was three, four hours a week probably, maybe more than that. It depends on what we do as individuals. Some of us spend a lot more time as a liaison working with the committees he is responsible for. Now, as vice chair, it is a lot more time. For example, we have our [Big “I”] legislative conference in Washington. I will leave on Monday, the 1st of May and will be there all that week. I come back on Sunday. I then, on Tuesday, leave for Oklahoma. I come back from Oklahoma at the end of that week. The next week I am free. I then leave on Sunday to go back down to Washington and Virginia. When I come back from there, I am back a couple of days, before I head to Florida.
That is new for me to be this busy travel-wise. It is a whole different scope as far as how much time do you spend a week on Big “I” business. With the travel, it adds a lot more time.
You obviously have as great a commitment to the Big “I” as you did to the MAIA. Why do you do it?
It is giving back to an industry that has been great to me. As agents, we do well if we work at it. I want to make sure that continues for future generations. How many reports have we read over the years, that have told us that the independent agent is dead? They are going by the way of the buggy whip and the IBM Selectric typewriter. Quite frankly, that has not happened, and I do not think it is going to happen.
I mean every 10 years somebody comes out with a report saying independent agents are all done. They are the old way of delivering insurance products to the market place. Well, I think we are still relevant. Maybe the role is changing. Maybe our business is changing, but show me what business does not change. I mean, years ago we used to spend advertising dollars on the Yellow Pages. Now we spend advertising dollars on social media and SEOs. It is just a different way of doing the same business and taking care of our insureds.
In your last answer, you mentioned ensuring that the agency business exists for future generations. That segues into the question about what do you see at the Big “I” about bringing new people into the independent agency system?
It is tough right now. It is something the Big “I” has been working on for a while, reaching out to colleges, for example. But, it is tough. Insurance is not a glamorous business.
Ironically, a few years back one of our Chairs was on a panel at a university speaking to about four hundred business students. There was a lawyer, an engineer, a doctor, and a dentist on the panel, too.
Before they went up on stage, the head of the department asked each panelist to mark down their total yearly compensation package and put it in an envelope. After the panel finished, the head of the department had the students vote on who they thought was the most successful from a monetary viewpoint.
I think our Chair at the time got about 10 votes only out of the 400. When it turned out that he was number one, the students were in shock. Afterwards, he had a crowd of students around him trying to find out how to become insurance agents.
To me, the moral of that story is that we have not done a great job of communicating about the opportunities that are available in the independent agency system. We have to do a better job of promoting what we do.
Part of the problem is individual agencies do not have the resources to do a lot of training in-house. It takes time for a producer to get acclimated and understand the business. The Big “I” does have one of the best education resources in the industry.
If any of your readers belong to the MAIA, or another state association, they can access the Big “I”’s “Virtual University.”
The Virtual University was started to help fill a void of getting information to agents. It is right on your desktop and it has tremendous articles on all kinds of issues that agents or agency owners can use.
They also have what they call, “Ask the expert.” There are about 100 people from all throughout the country that are experts in certain areas of insurance that are on call via email. If you had a question on a certificate, a binder, policy language, or policy interpretation, for example, you can shoot the question to an “Ask the expert” and within 24 hours or so, you will get responses on your question from two or three of the most knowledgeable people in the country. And the best part is it is all free. I teach E&O for the MAIA occasionally, and I tell all the students in the class to start using Virtual University.
Also, if you want to look to future growth of the agency system, one of the things that the Big “I” is working on a lot is “diversity.”
What does this “diversity” initiative of the Big “I” involve?
We have established a committee with some dynamic people on it. Madeleine Flanagan heads up that effort with that committee, among others. Madeleine is reaching out to companies and trying to get companies to become more conscious of it. Trying to get agencies to be more conscious of it in our dealings day-to-day.
In fact, one of the events at the annual legislative conference is a luncheon. We are bringing together a lot of the companies and talking to them about setting common goals moving forward regarding diversity recruiting.
For example, I have an agency here in Springfield and I would venture to say a third of my customers are from minority communities. They are a great source of business for us. But, they could also be a great source of young people to start working in the industry and to get the experience to support the agency system by starting their own agencies or buying agencies.
When is the legislative conference again?
At the beginning of May. I leave on May 1st and I come back on Sunday May 7th, but the actual legislative conference is Wednesday and Thursday, or May 3rd and 4th.
{For agents interested in another perspective on why they should attend this year’s Big “I” Legislative Conference, see Agency Checklists’ May 12, 2016 guest post by Ted Gibson, of Deland Gibson: “Agent Op-Ed: Why I Decided To Attend This Year’s Big “I” Legislative Conference”].
How does the legislative conference work for individual agencies and what does it offer?
Well, it gives you a great opportunity to connect with your state’s congressional delegation. From Massachusetts, the MAIA’s legislative committee puts together a group of agents for the conference. Historically they have had 20 or so agents come to Washington.
Overall, we have over a thousand agents from across the country that visit their Congressmen and Senators on Thursday. This year it will be Thursday, May 4th. The agents will actually meet with either their Senators, Representatives or a member of their staffs. The agents promote and talk about the issues that are most important to us.
This year is an important year for us from the perspective of both flood insurance and crop insurance. They are both up for re-authorization. Crop insurance is not much in this part of the country, although with the growth of farms in the New England area, it is becoming more important. Farms are on an upswing here for the first time in a long, long time.
In addition to that, there is the flood insurance program. Without the flood insurance program, our economy stops. What we try to impress upon the agents that are with us in Washington, is to understand that a lot of times the Senator out in the Midwest does not have any great affinity toward the flood program because it does not affect their state. It only affects the East Coast, the Southeast, West Coast, but does so tremendously.
You know what we went through on flood insurance the last time. We kept getting one year [extensions]. We ran into a huge problem where a lot of the Tea Party members felt that flood insurance was nothing more than an entitlement program. That was something in the process that we just had to deal with. Luckily, we had allies that were very helpful to us on both sides of the aisle and we got the re-authorization of the program after many, many attempts.
Besides flood insurance and crop insurance are there any other legislative issues that would affect Massachusetts agents that the Big “I” supports or opposes?
Nothing specifically for Massachusetts agents, but there are issues on the national level affecting agencies generally.
I will give you an example. When they first started talking about tax reform, they were talking about a regular corporation. They were not talking about subchapter S corporations. Well, 70% of our members are subchapter S corporations. If they are going to talk about tax reform, we need that on the table. Right now, it is not on the table.
Is there anything about depreciation of expirations? One of the tax proposals, I believe, proposed allowing the expensing of capital acquisitions. That would seem to apply to expirations since they are a depreciable capital asset.
I know there is some talk of that. I have not seen anything concrete yet, but, quite frankly, with the way things are going, you have got a President that has his mind going in one direction, I think. Within the House there are probably four different ideas on the Republican side, and probably three ideas on the Democrat side as to how reform should go.
Talking about capital acquisitions and insurance agencies, how do you view the emergence of hedge funds and equity investment from similar types of companies in the independent agency system?
That is tough to answer from my perspective. It is somewhat of a new phenomenon. At least, as to the amount of involvement. I think this is a result of the way things are today. Let’s face it, capital is cheap right now. That is not going to stay that way forever and these companies are going to be forced back into the more traditional ways of raising capital. That will change the dynamic, in my opinion.
Interestingly, though, we are seeing where you have groups of agencies, not so much aggregators, forming clusters. This cluster activity helps agencies maintain their own identity. Unfortunately, if somebody comes in and they have got cheap borrowed money and they offer an agent an absurd price for their expirations, the agent is going to take it.
I was just wondering if there are any initiatives being encouraged or fostered by the Big “I” to allow smaller independent agents to avoid being squeezed out of the acquisition game?
To my knowledge, we have not done anything in that area. Although talking about acquisitions, we have InsurBanc. It is a separate company, but there is not agency, or bank, in the country that knows more about agency acquisitions than InsurBanc. If you are sitting there, you can go to your local bank that you might have a deposit relationship with and you might get some loan officer to look at the loan. But, how many insurance agency acquisitions do they do a year? That is all these folks do at InsurBanc. I mean, they know the business inside and out. And they are based right down in Farmington Connecticut.
One of the other things I would love to talk a little bit about is Tom Minkler and TrustedChoice. When Tom was going through the chairs to become the Big “I”’s chairman, he came up with this concept of putting together a company that would refer people online to independent agents.
In the beginning, the project was called the Consumer Agent Portal. It is now TrustedChoice.com.
We have been at it for a short time, but the numbers are really starting to step up. Last August, for the first time nationally, we hit 10,000 referrals to independent agents. I just pulled the numbers.
Last year, more than 15,000 people in Massachusetts went to the Trusted Choice website. A 1000 of those ended up starting agency searches to find a new agency or find someone to provide coverage for them. And 197 referrals were delivered in one month. This year they predict 200,000 people will visit TrustedChoice.com, performing 16,000 agency searches with 3000 specific referrals delivered.
Is that for Massachusetts or for the country?
That is just specifically Massachusetts. No, the country, the numbers are through the roof.
Interestingly, what I am observing is that a lot of consumers in Massachusetts, the insurance buying public, are happy with their agents. I believe it is because of the service we provide. But, we also are in a state where independent agents control 70% of the personal lines market. There are some states where independent agents only control 30 to 35%. So for them, www.TrustedChoice.com is starting to make a difference nationally.[pullquote]I have not seen any kids playing baseball or soccer with “GEICO” written on the back of their jerseys. Independent agencies are a fabric of their communities and so when legislators have a question about insurance, they often call their agent to get the answer – Joe Leahy[/pullquote]
Why do you think other agents should get involved with organizations like the MAIA and the Big “I”?
Strength in numbers and community involvement. There are still a lot of independent agents and if they support the agents’ political action committees their voices will be heard in the State House and the Congress. In the local community, thinking from political side for a second, the business that is a stalwart in the community is the local insurance agency. They coach the youth teams and are involved in the community.
I have not seen any kids playing baseball or soccer with “GEICO” written on the back of their jerseys. Independent agencies are a fabric of their communities and so when legislators have a question about insurance, they often call their agent to get the answer.
Where do you see the independent agency system going forward? Are you optimistic, pessimistic or neutral?
Optimistic. I will tell you, they have done a tremendous job in Massachusetts with young agents and with recruiting the MAIA’s new CEO, Nick Fyntrilakis. The caliber of young agents that I have met and their involvement is tremendous. They want to be involved and they want to participate. They recognize that their participation is needed and that is why I think the future for independent agents looks bright.
Frank Mancini’s retirement could have left a huge hole in the MAIA’s effectiveness. Frank worked for the Massachusetts agents for over 40 years and finding someone who could fill his shoes seemed almost impossible. Nick Fyntrilakis, however, has taken the handoff from Frank and hit the ground running. This successful change in leadership is a great thing for Mass. agents and the MAIA.
I believe there is a meeting of the Big “I” coming up in Springfield?
Yes. Next year, in 2018, I will be sworn in as national chairman and that meeting will be held here in Springfield, which is great. If I could put my pro-Springfield hat on for a second, I mean the city of Springfield is going through a re-birth right now. There is currently over three billion dollars in investment. Granted part of that is MGM, but MGM is only 900 million of it. In the week that we are here, we will bring more than a million dollars into the Springfield economy, which is absolutely a home run.
How many members would you expect to attend this meeting in 2018?
We are probably looking at 500 to 600 people.
What is your parting advice to existing agents and future agents about the independent agency system?
What I would say to them: “you need to get involved.” I know there are people that do not have the time to get involved in committee work at MAIA, but they certainly can write out checks to our PACs. We know some cannot be involved in day-to-day association work and maybe they do not want to be involved, but if they can at least write a check out to protect their own future. One bad piece of legislation can do more damage than all their competitors combined.
If I leave any agent with a message, that message is, at least contribute and help us bring our message to Capitol Hill and to Beacon Hill because in the long run, collectively we will be all better off for it.
Thank you. Are there two PACs? One for the MAIA and one for the Big “I”?
Yes. The MAIA is “IMPAC” and the Big “I”’s is InsurPAC. Agents wishing to support these PACs can use the donation forms here:
