A Safe Bet

Edward Murphy, president of First American Insurance Agency in Chicopee, has a neat stack of poker chips sitting on the corner of his desk, ready for a friendly poker game.

But while Murphy might like to blow off some steam with a game of blackjack or Texas Hold ’Em every once in a while, in the ever-changing insurance industry, he never gambles with his own company. Instead, he has plotted a course for First American that, as the company celebrates its 20th anniversary, has allowed for steady growth, some national reach, stability in a difficult industry, and the creation of some community-focused business goals for the coming years.

And while the company remains ready for the current challenges within the industry – auto insurance reform and the trickle-down effects of Hurricane Katrina, which include price adjustments and an overall tightening of the types of policies that can be written, for instance – its specialty is anticipating the challenges ahead.

The company’s very reason for being, Murphy explained, is the need for services that didn’t exist in the mid-1980s.

“In 1986 when we first started, there were a lot of services that weren’t being offered in Western Mass.,” he said. “There was a need for new programs and new ideas, and it boiled down to providing the services that people needed most – insurance for life, as we know it.”

And that practice has become First American’s trump card. The company now enjoys a strong local presence as well as some reach into markets in other parts of the country, thanks to the niches created by addressing issues some other companies might have missed, and a growing strength within the small business community and industries such as manufacturing.

But despite that national success, Murphy said the company’s roots are in Western Mass., and that’s where they’ll stay.

“All companies, small or big, have to a part of their community,” he said. “And we’re not going anywhere.”

Movin’ On Up

First American’s first location was at the ‘X’ in Springfield, but as it grew, Murphy and his staff made a few moves to accommodate an expanding client base. The company moved from Springfield to West Springfield in 1990, and in 1994 moved again to Chicopee, where it has remained, having recently relocated to a new location on Front Street.

“We just kept growing beyond the space we had,” said Jim Lagodich, marketing director for First American. “We were continuously looking for buildings in which we could expand, that would remain customer-friendly and service-oriented.”

Lagodich added that First American has been a company that has worked to provide products that other agencies don’t offer in order to stand apart from the competition.

The company has been a front-runner, for example, in the areas of workers’ compensation and self-insurance, with programs such as COMPro, a workers’ compensation administrative service for stand-alone self-insureds, self-insurance groups, and large employers. Other specialties include bundled programs, which offer a number of insurance products within one package, claims administration, a service typically outsourced by agencies of First American’s size, and payroll deductible products for employers and the self-insured.

Dave Matosky, operations director at First American, said each of those products are good examples of initiatives that have led to increased flexibility when dealing with a diverse set of clients, and consequently growth within some specific areas, including small business.

“They allow us to react to market changes more quickly, “ he said, “and to serve clients more effectively. When working with larger employers, we can suggest programs and services they may not have known existed, or would be a good fit for them. And when working with smaller businesses or individuals, we can offer their core insurance needs in one package.”

That has made First American an attractive choice for many businesses, but also for municipalities, niche businesses, and, particularly, new start-ups.

“We get a lot of calls from people who are still just thinking about starting a business,” Matosky said. “Most have no idea what’s involved with things like workers’ compensation or group insurance at first, and they need a tailored approach and most importantly answers to those tough questions.

“The very fact that we don’t offer ‘the product off the shelf’ is what attracts those types of entrepreneurs to us,” he added, “and what helps us to retain them as clients and grow with them over the course of time.”

Soaring to New Heights

In fact, a greater push within First American to market itself through community outreach and educational programs has stemmed from that strength within the small business market. It began with seminars for managers and supervisors in a number of industries, addressing topics such as accident investigation, and the key points anyone in a supervisory capacity needs to know.

“We spend a lot of resources on education, for others and within the company,” Lagodich said. “That has allowed us to reach new audiences and has also expanded our boundaries – we’re not intimidated by new moves forward.”

One of the first educational seminars, that accident-investigation course, was open to new business owners and supervisors, and was held in Natick, Mass. But First American has also extended its reach into other locales, including New York, New Hampshire, and even Chicago, working with a large manufacturer.

“Educational outreach programs also contribute to retention of our employee base,” said Lagodich. “It fosters more contact with clients, helps build relationships, and keeps the job fresh, so overall, our employees are happier.”

But on the occasion of the company’s 20th anniversary, not all of the programs First American is rolling out are aimed solely at business growth. Currently, one of the most often-discussed initiatives within the agency’s offices is the S.O.A.R. program, a partnership with Chicopee’s Selser Memorial School that rewards students for good behavior.

The program – an acronym for staying Safe, Offering a helping hand, Aiming to achieve, and Respecting yourself, others, and your school – is a response to issues surrounding behavior, conduct and delinquency. The school originally solicited businesses in the community to sponsor the project in hopes of creating a turn-around within the young student body before the children reach high school age. But Corey Murphy, vice president at First American, said the company took the offer to partner with the school very seriously, and pledged support beyond financial assistance.

“Like most businesses, we’re constantly asked to help, but we really bought into this program,” he said. “It has become our one big, public program and has really helped to strengthen the ties between us and the community of Chicopee.

“As a business in this community, it is our responsibility to help the community, and we decided early on that our focus was going to be on the city’s kids,” Murphy continued.

And while programs like S.O.A.R. are sponsored by businesses across the region, First American has actually made community service one of its primary business goals for 2006, a move that Murphy said underscores the importance of such initiatives to the overall well-being of the region as well as to the business health of the company.

“We hope to begin more community programs like this within the year,” he said, noting that one such partnership might be with the Chicopee Boys and Girls Club. “It’s something we’ve decided to focus on in an effort to strengthen our role as a good corporate citizen.”

High Rollers

In addition to those community-oriented projects, Matosky added that additional goals for 2006 will be to continue to expand the company’s ability to find solutions to emerging issues within the insurance sector — the game is constantly changing, he said, bringing a new meaning to the word ‘proactive’ for all insurance agents – and to continue to foster steady growth.

“We’re going to continue to focus our resources on education, and there are the inevitable technology upgrades to think about,” he said. “Like a lot of offices we’re moving forward with going paperless, in part because of the changes in the industry. Things are moving at such a rapid pace that books are becoming obsolete. Now, it’s necessary that our resources be accessed quickly in order to stay current and do research for our clients – only online resources and databases make that possible.”

So as the stakes grow, First American plans to hold strong. And that’s a bet Edward Murphy is willing to take.

Jaclyn Stevenson can be reached at[email protected]