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You are here: Home / Insurance Insights | Massachusetts / Interviews / A Q&A With Andrew Drayer: Salem Five Insurance’s New Senior VP For Agency Acquisitions And Strategic Growth

A Q&A With Andrew Drayer: Salem Five Insurance’s New Senior VP For Agency Acquisitions And Strategic Growth

January 26, 2021 by Owen Gallagher

Mr. Drayer joins Salem Five in a newly created position with responsibility for organic and inorganic growth strategies


Many in Massachusetts may remember Mr. Drayer as the former Business Development/Marketing for MAPFRE in the Northeast Region where he had relationships with more than 900+ independent insurance agencies.

Upon hearing of his new role as well as his plans to help increase Salem Five Insurance’s presence throughout Massachusetts, Agency Checklists thought many of our readers might be interested in hearing more of his plans. Here is what he told us:

Andrew. Thank you for granting an interview about your new role at Salem Five Insurance. We were interested when we heard about the new position and the role you would play at Salem Five Insurance. Before we talk about your background and plans, perhaps you could enlighten our readers about your new position?

Of course. And thank you for the opportunity to discuss my position and our plans at Salem Five Insurance.

I am the Senior Vice President of Strategic Growth for Salem Five Insurance. This is a new position with responsibility for organic and inorganic growth strategies. Because our ability to grow overlaps with all areas of the business, I am increasingly involved in the operations, carrier relationships, recruiting, and just about all areas of managing the insurance agency. My primary focus, though, will be around sourcing and closing on acquisitions.


Before we get into the nitty-gritty about this new position, can you tell us something about yourself and how you happened to become involved in the insurance business?

Salem Five Insurance VP Andrew Drayer
Andrew Drayer

Well, I was a practicing lawyer until about four years ago. When I graduated from law school, I knew I wanted to be a trial lawyer. For me, the options for actually trying cases boiled down to working as an Assistant District Attorney on the criminal side or getting into tort litigation. So, I joined an insurance defense firm and began learning all those things they did not teach us in law school–like billing hours!

After working with a couple of Boston firms, I joined NGM Insurance Company (Main Street America) as an in-house trial counsel. Eventually, I became the managing attorney of their staff counsel office. I would later join MAPFRE Insurance and start their staff counsel office. After 17 years of practice, including ten years as a managing attorney for two different insurance companies, I changed gears. I became the head of Business Development/Marketing for MAPFRE in the Northeast Region.

People are often surprised that I left my legal practice to pursue more of a sales track, but it made a lot of sense to me then, and it continues to make sense to me now. I left private practice and went in-house partially because I always pictured myself moving to the business side of an organization. Moreover, I developed a real passion for leadership as a managing attorney and later as the leader of business development. As I reflect on my career, I have always valued, relied upon, and invested heavily in relationships, regardless of my position. So, to answer your question, I think I ended up in insurance because, for me, it is the ultimate relationship business. As a lawyer, I asked people to place their trust in me to provide them with a solution to a problem. As an executive with Salem Five Insurance, I will do the same.


You have now joined Salem Five Insurance–how did this opportunity come about, and what drew you to this position.

Like many things in business and life, the opportunity was largely a function of timing. I enjoyed a great relationship with Jay and Brian Boyle, the Salem Five Insurance leaders, and their agency was one of my largest business partners. At lunch one day, during a seemingly casual conversation about Salem Five Insurance’s perpetuation plans, Brian asked me whether I would ever consider a career change and come to work for the agency.

It was unexpected and very flattering to be considered for such an important role at such a first-class organization. I am humbled to be here and extremely excited about the future.


What do you see as your main role with Salem Five Insurance going forward?

It has only been about six weeks. So as the new kid on the block, I am focused on listening and learning. It is critical that I understand our culture, strengths, potential growth opportunities–both organically and by acquisition–and where we have room to improve our operational efficiency. As I noted, I plan to focus principally on agency acquisition opportunities but will also be looking at talent acquisition opportunities, process management, and a data strategy that can hopefully help us infuse more objectivity into our strategic decision making.


What is your plan for growing Salem Five Insurance?

For agency sellers, I think that we are a platform that will make sense for many agents and their customers. We are the largest mutual bank in the state. We have more than $5 billion in assets, and we have been serving the community for 165 years. So, sellers looking for an extremely well-capitalized organization, but also one that has deep ties to the community, and is incredibly customer-centric, should think about Salem Five.

As for the organic strategy, I think our greatest opportunity is the internal synergies we have with other departments within the Bank. The cross-referral programs that exist, and which we will continue to refine, have tremendous potential for continued growth. Moreover, these programs are supported fully by our President, Ping Yin Chai, and the rest of the Executive Management Team.

In my prior role, I constantly looked for ways to help my agents cultivate centers of influence that could feed them business. I, therefore, recognize that having referral sources embedded within the organization is a tremendous advantage and opportunity for us.

We are also working with our marketing team, which has recently undergone a leadership change and is now run by Joe Bartolotta. Joe has a dynamic background in media, advertising, and marketing. Joe and his team have some great ideas about a multi-channel branding approach to enhance general awareness and highlight the full suite of financial products, including insurance, that Salem Five can provide to its customers.


Do you plan on growing the Salem Five team as well?

Yes. We know we cannot simply grow our book of business without ensuring that we have the infrastructure to support that growth.

When we look at future agency acquisitions, an important component of any transaction will involve retaining the employees of those agencies. While we are certainly interested in the agencies that are owned by the retiring agency principal, we are equally interested in the agency principal who has a long career in front of him or her but recognizes the challenges of running a business and wants the backing and stability that Salem Five can offer. Agents often talk about the challenges they face growing their businesses, managing people, recruiting talent, dealing with technology, and a host of other logistics that take them away from the things they enjoy most about their agency. I think we represent a solution for those agents. For talented leaders who want to continue to operate their agencies but do not necessarily want to deal with the business’s administrative side and other challenges, joining our team could be a great opportunity.

In addition to acquiring talent through agency acquisitions, we are actively recruiting for producers and account managers, both for personal lines and commercial lines.

We also anticipate that we will be looking for future leaders to help us continue to maintain our strong foundation and support our growth strategy.

One of the strongest assets that we possess at Salem Five Insurance today is our senior leadership. Several of these leaders will be contemplating retirement over the next few years, and it is critical that succession planning begins now.


Salem Five Insurance has flown under the radar for the past couple of years; how are you planning to grow brand awareness?

Well, I would somewhat disagree with the premise of the question. If you are referring to merger and acquisition activity, Salem Five has been active, but just more targeted than some of our competitors. My charge is to use the Bank’s financial strength and commitment to growth to make Salem Five Insurance a recognized buyer for any agency looking to sell. The best way to grow awareness in this regard will be to get deals done. And that is the plan.


In your opinion, what will distinguish Salem Five as an agency buyer?

Every deal is unique. When an agent decides that he or she is ready to sell, it can be for any number of reasons, and that agent may have any number of goals associated with the transaction. Our approach is that there is no problem that we cannot solve. So, if an agent is looking for cash and wants to retire or try something else, we can solve that problem. If an agent wants to continue working but likes the idea of a platform that provides stability and strong infrastructure, we can solve that problem too. If it is important to an agent that his or her customers end up with a local organization that has been, and continues to be, committed to the community it serves, then we are a great choice for that agent as well.

I think a good example to consider is the way our industry views stock purchases. For many good reasons, buyers in our industry overwhelmingly prefer asset purchases to stock purchases. Tax consequences, liabilities, and other factors often make asset purchases the obvious choice for a buyer, but for a given transaction, that format may not provide the best outcome for the seller. Because we will always strive to find ways to get deals done, regardless of complexity, we will not reject a deal out of hand because it is outside of the norm.

I try to remind our sales teams that our job is to get to “yes.” We will approach agency acquisitions in the same manner. We will endeavor to solve problems and get deals done.


How is Salem Five Insurance positioned in the post-COVID-19 landscape?

Salem Five has been extremely focused on employee and customer safety during the pandemic. I have been impressed with what I have seen. I think what we have learned about our resiliency and adaptability will position us well for the future. We certainly have the technology and workforce to manage our industry’s continued evolution in a post-pandemic environment.

Acquiring talent is always challenging. Ensuring that we have flexible options for employees is critical today and likely to be even more critical in the future. I think we are well-positioned in this regard.

I also think that our good balance between commercial and personal lines business, our strong capitalization, and the internal synergies that we can rely upon as business feeders all position us very well for the future.


What do you see as Salem Five’s position within the Massachusetts insurance marketplace over the next year, the next five years?

With $70M in written premium, we are a good-sized agency, but not as big as we know we can be. Our initial goal is to get to $100M in written premium. That will not happen with organic growth alone. To reach this goal, we know we must take a highly active role as a financially able and flexible buyer with a willingness to make deals work for sellers.

Can you tell us more about how Salem Five Insurance is structured? How does it work in conjunction with the Bank?

Salem Five Insurance operates more or less autonomously and generally runs like any other agency. Like all departments of the Bank, we are accountable for our budget and our targets.

However, we are a little different from some of the other departments because we must ensure that we adhere to a separate regulatory structure. We are mandated to maintain a certain degree of separation from the Bank.

Culturally though, we are always looking to integrate with the rest of the institution to capitalize on internal partnerships whenever we can. Moreover, when we have issues involving Human Resources, Facilities, IT, Compliance, or the like, we are backed by a large and very collaborative organization.


What are the differences and strengths you see in being in a bank-owned insurance agency versus an independent agency or an insurance company?

I think it is often assumed that a bank-owned agency might be more bureaucratic and that a bank will be more conservative from an expense management standpoint. With Salem Five, though, there is a real entrepreneurial culture. The senior leadership at Salem Five fosters this environment.

Moreover, the diversity of financial products and services allows the Bank to weather a variety of economic circumstances. For example, the current economy is resulting in extraordinarily little interest-bearing income. So, groups like Insurance and Mortgage help offset other areas of the Bank that might be struggling because of economy-induced market conditions. And certainly, as interest rates go up and economic conditions change, then other Bank areas will capitalize on those changes and support departments that might begin to struggle. This diversification provides for great flexibility and stability.


What are some financial misconceptions that you think agents might have about selling to a bank-owned insurance agency like Salem Five Insurance?

I believe that the principal misconception of agents looking to sell might be that we will not pay the multiples that private equity has been paying. I can say categorically that Salem Five is looking to acquire. We understand that the market is defined, in large part, by what any other qualified buyers are willing to pay. We know if we expect to win that we must offer competitive purchase prices. As I suggested, though, each transaction is unique. Understanding the seller’s goals, being creative, and arriving at the best outcome, will not always involve being the highest bidder. In any given situation, we will try to offer the best price and the best overall response to the seller’s goals.

I think it also might be a misconception that we are looking to buy an agency’s assets and then shed the employees. As I noted, in most cases, we will be looking for talent to remain with us following the transaction, if that opportunity exists.


Are there issues that you must deal with in a bank-owned agency that you do not have to deal with in a privately owned agency?

I certainly do not have enough agency experience to make broad statements about the differences. I can say, however, that Salem Five Insurance, for me, is the best of both worlds. A main street small business with a team committed to its community, its customers, and each other, combined with a large enough corporate platform to provide the type of resources and support to take on the investments necessary to grow profitably.


What trends do you see developing in the agency business that you think agents should be thinking about post-Covid-19?

I think that we had already seen less and less walk-in traffic, and that trend was accelerated dramatically by the pandemic. I do not think that we will see customers revert to visiting agencies like they once did. So, agents will have to continue to utilize technology to make the experience of shopping for insurance and buying insurance as easy as possible and consistent with the ways that customers shop for other products and services. I do not think that most people will start buying insurance online in the immediate future, but as we advance, inevitably, more customers will shop for insurance online. So, agencies must be visible and available to customers with different shopping and buying habits. Stronger alliances with carrier partners and rating platforms will be critical in this regard.

I also expect to see much more investment in data. The direct writers are well ahead of us on this front, and data must have a larger role in independent agency strategy. Investing in predictive analytics will likely become more commonplace, too, particularly among the larger agencies, like us.

Notwithstanding the acceleration of using technology and data, I think that when people can resume more regular interpersonal interactions, particularly with commercial customers, good producers will be well-served to get back out on the road and visit those key relationships. Business clients will be hungry to resume those interactions as well.


Before joining Salem Five Insurance, you had overall responsibility for MAPFRE’s relationship with approximately 900+ independent agencies throughout New England. Based on MAPFRE’s market share in Massachusetts, you had a unique opportunity to obtain a perspective on the Massachusetts independent insurance agency system. What do you see as the long-term strengths and weaknesses of the Massachusetts independent agencies based on this experience?

It was a tremendous privilege to lead the MAPFRE business development team and work with many talented professionals. I also took great pride in managing the Northeast agency plant, which represented the organization’s most critical relationships. I left a position that I genuinely enjoyed for an opportunity with another great team and organization. I would not have made this move if I did not feel that the future of independent agents is bright.

People want choice. They want competitive pricing. But more than anything, I think they want to know that they have someone who can help them navigate what can be complicated transactions that protect their most valuable assets.

Our currency, and our greatest strength, is still our customer’s trust. The role of the trusted advisor will continue to be the ultimate value proposition that independent agents offer. How we will transact business with customers will change. Technology will undoubtedly continue to chase down consumer expectations. Direct writers and insurtechs will continue to look for opportunities to reduce or eliminate our role. In my opinion, however, personal relationships based upon trust will persist, and independent agents will continue to offer value.


If an agent is interested in contacting you about anything we have discussed, what is the easiest way to begin a conversation with you?

I am always delighted to talk to other agents about almost anything. They can email me at Andrew.Drayer@salemfive.com or call me at 978-720-5179.

Thank you again for the opportunity.


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Filed Under: Interviews, Latest News Tagged With: Agency Checklists, Insurance Agency Acquisitions Massachusetts, insurance agency sales massachusetts, massachusetts insurance news, Massagent agency sales, Salem Five Insurance

About Owen Gallagher

Owen Gallagher is an experienced insurance litigator as well as a certified mediator and arbitrator who specializes in insurance industry disputes. His interest and affinity for insurance began at a young age working the counter at his father’s assigned risk agency in Roxbury. Over the course of his career, Owen has argued a number of cases in the Massachusetts Supreme Judicial Court and has helped agents, insurance companies, and lawmakers alike with the complexities and idiosyncrasies of insurance law in the Commonwealth.  Owen can be reached here.

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