With aggressiveness and planning, Murphy Insurance Services has leaped to incredible growth levels.
By Michael Muckia
"The quick brown fox jumped over the lazy dog."
Its a child's verse. But it's one that, like most children's verses, contains a kernel of universal truth. It also may best describe the secret to the success of Murphy Insurance Services Inc., one of Dane County's fastest-growing businesses.
The independent agency, headquartered in Waunakee, Wisconsin ranked first in our recent poll, posting impressive gains and a growth rate placing it among the fastest of the area's fast-growth companies.
Founded in 1990 by former Rural Insurance agent and office manager Steven J. Murphy, the commercial insurance operation began in the back room of another independent agent's house. In his first year, Murphy single-handedly wrote $155,929 in premiums. Not bad for a new kid.
By the end of last year, the company had moved to its own offices, grown to a staff of seven full-time equivalents, and increased its book of business to $3.9 million. And the quick brown fox had leaped over a lot of lazy dogs in the process.
"They've written well over $1 million in premiums for us," says Adam McNutt, assistant marketing manager for Frankenmuth Mutual Insurance Co., Frankenmuth, Mich., one of the 25 companies Murphy represents. "That puts them in the top 5 percent of all our agents in all four states in which we're represented."
Terry Tighe, vice president of sales for West Bend (Wis.) Mutual Insurance Co., agrees. "They've already among the top 35 agencies of the 600 with which me work."
No matter who you ask, Murphy, 34, is a swiftly rising star among independent agents. Along with his brother, former Rural Insurance agent Patrick J. Murphy, 29, the two have taken the local insurance market by storm, carving out their niche through intense competition, management savvy and a clear understanding of the commercial market and how to serve it.
The Murphy Style
The "I've been described as confident, persistent, aggressive ... a little cocky," Steven Murphy muses. "I think people sometimes misunderstand what it is I'm trying to do here.
No matter how well we've done, we're never content with our own achievements. There's always reason to believe that we could do better. That feeling is what drives us."
That's also an advantage Murphy thinks he and his brother have over other independent agencies. The agency is too new to be an institution, too young to be complacent, and too competitive to rest on any laurels. Through goal setting and resetting, participative management, and what Murphy describes as "consistent application of common sense," Murphy Insurance Services has set out to beat the competition. They are, at the very least, putting a sizable dent in the marketplace.
"Today there's a lot competition out there," says Hausmann Insurance's Jeff Hausmann. "[Murphy Insurance Services] has been aggressive, active, and has a done a good job."
Doug Dittman, vice president of The Neckerman Agency, sees a similar pattern. "The Murphys are out there like everyone else," he says. "They're good competitors."
And it doesn't hurt, Murphy says, to be a little bit of an underdog. "I don't think our competition initially saw us as a serious threat," he says. But being the best was our goal and our attitude from the start. Now the companies we work with tell us that all they hear out there from our competitors are those damn Murphys!"'
Apparently, some of the lazy dogs are beginning to notice those quick brown foxes.
Who Are Those Guys?
From his very first day at Rural Insurance in February 1985, Steven Murphy knew he wanted to be an Independent independent agent. The son of the former editor and owner of the Waunakee Tribune, Murphy says entrepreneurship was in his blood, and he knew some day he, too, would operate his own agency.
"I tried several different jobs before I was recruited by Rural Insurance," says Murphy, who holds an associate degree in marketing from Madison Area Technical College (MATC). "I knew I wanted a sales job because it gave me independence and the ability to earn what I was worth. And the insurance business allowed me to operate like a business owner without carrying the risk."
Despite the fact that he had little business background, Murphy ended that first year among Rural's top 2 percent for overall sales and in the top 10 for commercial lines. By 1987, he had earned Rural's Million Dollar Roundtable Award for overall sales.
The next year, he was promoted to associate manager of the company's Waukesha-Milwaukee County agency. Though below-average in sales when Murphy joined its staff, the agency was soon the highest producing of all Rural's agencies, being named Agency of the Month in nine of the first 11 months he was there. But the success left Murphy a little hollow. "When I was a manager, I couldn't sell, I could help, but it wasn't the same thrill you get when you close a sale," he says. "It was time for me to go back to being an agent, but I knew that would never be enough unless I owned the agency."
Getting started a little more than two years after he set down roots in Waukesha, Murphy counted his savings, sold his house and moved his family back to Waunakee for the gamble of his life.
"If I had any advantages at all, they were a fairly decent bank account to finance my operation and my own brand of tunnel vision," Murphy says. "I didn't care what I had to do to succeed within the limits of the law, because I had the desire and the resources to do it."
Murphy began sharing the space of another independent agent who worked out of his Waunakee home. A desk, a telephone and a Rolodex were about all he had to begin his company.
"I had two people working part-time out of their homes making phone calls and asking businesses if we could quote them insurance. Meanwhile, I'd be out there quoting as much business as possible in order to establish some accounts."
And because his young company lacked name recognition, Murphy says he had to work twice as hard to write the same amount of business.
"I wouldn't be comfortable with myself if I was three weeks into a month and I hadn't met my goal. I'd get on the phone until 9 p.m., selling any type of insurance I could, just to meet my goal."
Old-fashioned aggressiveness paid off By the end of his first year in business, Murphy had reestablished his monthly sales goal three times.
"A goal needs to be something to be reached for, something not easily attainable," Murphy says. "Within the first year, we more than doubled our initial projections."
Murphy expanded, and earned his own spare bedroom in his friend's house. His agency began to grow.
"If there's any operative philosophy at work here, it's being able to predict when your business reaches a plateau.
You can't stay put, but you can decide whether you're going to go up or down," Murphy says. "We always try to go up.
Murphy Insurance Services reached its first plateau the following year. The agent knew in order to grow, he must continue to sell. But in order to maintain his client retention rate goal of 95 percent - high in an industry that counts 80 percent to 85 percent as exceptionally good - he must also manage existing accounts. Exactly a year to the day after he started his company, Murphy hired Joan B Ogden as office manager.
It was Murphy's energy and promise of an open management style - certainly not the modest surroundings - that attracted Ogden, who had worked for Wisconsin Physicians Service, State Farm insurance, and several independent agents before joining Murphy. Ogden's past history as customer service agent and role as insurance instructor at MATC made her an excellent match in Murphy's eyes.
"Our goal from the start was excellence in serving clients," Ogden says. "We do whatever it takes to make them happy. That's not standard practice for many insurance companies. They do what they have to do, period."
It was a mere six months to the second plateau.
"In order to obtain more contracts, I needed more than myself," he explains "I knew that, in order to grow, I had to stop walking away from potential business. If I could split some of the responsibilities, I could continue to bring in more business."
In January, 1992, Murphy vaulted that plateau by hiring his brother, Patrick, away from Rural Insurance, where he managed a $550,000 book of business, 70 percent of which was in commercial lines. He fit in well, considering that Murphy has a 90 percent emphasis on commercial lines.
"Rural was an excellent employer," says Patrick Murphy, who was named Rural's 1989 "Rookie of the Year" runner-up and earned the company's Production Shield Award 10 times during his 44-month tenure. "Toward the end, however, it wasn't very competitive. That's the advantage of an independent agency."
When he and his brother weren't on the road, Patrick Murphy and Ogden shared a desk in the cramped quarters. But they were happy to be there.
"We've had people come to us based solely on the belief of where the company was going to go," Steven Murphy says. "I probably lost some people along the way because I was too cautious. Now I do what it takes to get a good person in here."
For Ogden and Patrick Murphy, that faith paid off. Six months after his hire, the younger Murphy helped his brother reach the agency's first million dollars in sales.
How Do They Do That?
High energy levels and a "take on the world" attitude have helped Murphy Insurance Services reach goals beyond even Steven Murphy's optimistic imaginings. Last year's $3.9 million level is nearly double the company's projected $2.2 million in business, putting Murphy well on his way to his revised year-end 1995 goal of $11 million in property and casualty sales. Murphy credits the success with good organization, avoidance of unnecessary debt, and planning for long-term rather than short-term gain.
"It's also a common-sense thing," he says. "I believe in open communication.
While not an advocate of formal total quality management (TQM) philosophies, Murphy employs many of the techniques in the interest of greater efficiency and effectiveness. Employees are challenged to operate at their highest level, and empowered to make decisions necessary to serving their customers. While both Murphys concentrate on sales and administration, Ogden is charged with managing daily operations. Each employee has his or her own specialty and is expected to perform to optimum levels in helping to meet company goals.
"I also make decisions based on associate input. People tend to be more productive when they feel their contributions are used and valued," Murphy says. "And we do try to steer away from the term, 'employee' because it implies subservience. Everyone here is a vital contributor to our overall goals."
Murphy looks for the same energy and commitment in his associates that he expects from himself, as well as: a good attitude, both about themselves and the work they do; intelligence and understanding of the business; a desire to be challenged; and the ability to be good problem-solvers.
"Introverts wouldn't work here. Neither would people who just like to maintain the status quo," he says.
"There's an excitement here," Ogden adds. "The open management style helps that. I've always looked to play a key role. Here I'm given that opportunity."
The agents carry that same level of planning and energy to the markets they serve, seeking to provide their clients with products that are competitive in price and value.
"One [insurance] company can't be all things to all clients," Patrick Murphy says. "As independent agents, we're able to offer a more competitive and wider variety of products to our clients."
The agency also relies heavily on target marketing. By specializing in various industries, they've been able to concentrate on lines they feel are most competitive in their market, enabling them to become top suppliers for their clients, as well as top producers for their companies.
"We write a lot of business for a lot of contractors," explains Dave Froh, specialist with Heritage Mutual Insurance Co., Sheboygan. "The Murphys have given us good activity in this area. They're aggressive and knowledgeable. They've done over $400,000 in business for us this year," he adds.
"We find out from our markets what they want to write, then we go out and market that," says Murphy. "Target marketing is a very large part of our success."
The strategy also has helped the companies they represent streamline their operations and save thousands of dollars, Murphys says. The agency only chooses top-flight insurers, limiting their representations to companies with A+ ratings from A.M. Best, an insurance industry rating firm.
"We're aggressively seeking to write more business in Wisconsin, and we looked for good, young, aggressive producers," explains Frankenmuth Mutual's McNutt. "Right now, Murphy is our number one producing agency here."
The Next Plateau
Steven Murphy aims to keep it that way, and he has just taken steps to vault his third plateau. Knowing data to be the lifeblood of the insurance agency, the company has recently invested $70,000 in a new computer system. They've also recruited Linda Steiner, an agent from Prairie du Chien and head of the Independent Insurance Agents of Wisconsin automation committee.
"This is the first time we've had to go into debt since we started," Murphy says, "but we knew we had to improve our accounting and automation function."
The new computer will enable them to further segment - and, thus, better serve - the various markets they seek to target. It will also provide the increased business they'll need to help increase their square footage; buy or build their first headquarters building within two years; recruit at least two more national companies; and acquire up to three additional agencies with a combined business book of $2.5 million. All those goals lay ahead, and all depend on the Murphys' success in the sales trenches.
"We grow through our producers," Steven Murphy says. "If we're not out seeing and selling people, we're not growing."
And with goals as lofty as theirs, it's a sure bet those damn Murphys will be out seeing and selling a lot of people in the years to come.
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