Family Plan

T.P. Daley Insurance Navigates a Changing Industry

Insurance is certainly in the Daley family’s blood. But their father wanted them to be certain.

“Our father made sure we all worked somewhere else first,” said Anne Daley, one of four principals at T.P. Daley Insurance Agency, along with her siblings, Jim, Kathy, and Tom Daley.

In fact, all four of them were interested in joining the company their father, Thomas P. Daley, started, but he wouldn’t allow them to make the firm their first job. So they cut their teeth at large companies like Aetna, Travelers, and John Hancock.

“He wanted to make sure we liked the business and learned the business; he didn’t want us to come in as the boss’s kid,” Anne added. “That was the message: ‘get a little background prior to coming here. If you hate it, hate it with someone else; don’t hate it with me.’”

None of them, it turned out, hated the insurance field, and between 1985 and 1990, all four came on board, and run the second-generation family business in West Springfield to this day.

“It’s scary that we all ended up in insurance after graduating,” Kathy said, “but we all wound up here.”

They have fond memories of growing up around Thomas Daley’s workplace.

“When we were young kids, Dad used to call on all his customers, and he’d take us with him,” Jim recalled. As it happened, most of those clients were in construction, as Daley focused his business on performance bonds in the construction field. “So we would climb on all the equipment. I don’t remember how many times he’d be talking to the owner, and we’d be climbing on loaders and excavators. I remember coming home filthy, and Mom saying she’d never get the grease out of my coat.”

“We really did grow up with it,” Anne added.

With the help of the GI Bill, their father graduated from the University of Rhode Island, which at the time boasted the only insurance school in the Northeast, Kathy said.

He was a bond manager for Aetna in Springfield during the 1950s when he decided to start an independent insurance agency and become a bond producer rather than work for someone else as a bond representative, Jim explained. So, at the dawn of the ’60s, he and partner Bill Tuttle opened Daley & Tuttle Insurance on State Street in Springfield.

“Then Bill wanted to go to Eastern Mass. and focus his sales pursuits there,” Jim said. “My dad really liked the more parochial nature of Western Mass., so they decided to split up. T.P. Daley started in 1963, just him and one employee.” They moved the business across the river to Park Avenue in West Springfield, then relocated to their current location on Westfield Street around 1981 — the former site of Sweenor’s Candy.

“People come in and say, ‘I can still smell those bon bons,’” Jim said, standing beside a long counter where the Daleys still set out bowls of candy. “This is where the glass was, where they sold candy.”

But it’s not candy running through he family’s veins, Jim said, but insurance; in fact, he met his wife at a four-day-long ‘bond school’ in Texas. Simply put, this is a clan that truly enjoys the business their father started, and for this issue’s focus on insurance, they sat down with BusinessWest to explain why.

Bonding Agents

While the company has diversified considerably since its early days, T.P. Daley still specializes in bonds for contractors. “It’s not really an insurance product,” said Jim. “It’s a financial guarantee that the contractor is going to bid the job according to plan and then complete the job according to plan.

“The key focus for us is still contractors,” he added. “We do an awful lot of construction risk, both in insurance and bonds.”

The industry has changed quite a bit since the 1960s, however, a time when the surety world wasn’t set up to handle very large contracts. “So he had to go out and buy reinsurance for different layers of the contract size.”

Also, Tom noted, “he didn’t go through agents; he went directly to the customer. Now a lot of that is handled through agents.”

Despite the changes, Anne said — and there’s a tremendous variety today of what bond companies will accept — T.P. Daley still succeeds by fostering relationships, even though insurance products are viewed more and more like commodities, with clients in search of the cheapest price. “Although the field has grown and evolved tremendously, it’s still a relationship business here.”

She noted that there weren’t a lot of bond agencies when her father started out, and very few locally. “That has changed over the past 10 years — there are more agents in the area, and more agents in general working in the bond field.”

That means a much more competitive playing field, Jim said, which is a far greater challenge today than it was when the construction industry was rolling along throughout most of the 2000s. Even when the financial markets crashed in 2008 and triggered the Great Recession, contractors remained busy for awhile.

“Construction kind of lagged, so the industry was still rolling in ’08, ’09, even into ’10,” he said. “Those were good years for most contractors.”

But once backlogs were depleted, times got tough, and remain so today. Contractors have had to “sharpen their pencils” and cut their margins, he explained, and insurance companies heavily invested in construction have felt the pressure. “If there was more work, we’d see the margins come up, but there’s so much competition for the amount of work available out there that the margins have not recovered to their prior levels.”

The situation has been exacerbated, Jim added, by the fact that the government has been reluctant to access funds from the Chapter 90 Program, which pays for infrastructure-improvement projects in Massachusetts, and cities and towns have been loath to dip into their own budgets, “so you’re seeing deteriorating infrastructure; that’s exactly what’s going on.”

Rest of the Story

Fortunately, T.P. Daley’s array of products has widened considerably since the agency’s early days, encompassing a range of both business and personal lines, including home, auto, and life.

That side of the business has undergone changes as well in recent years, particularly with Massachusetts moving from set auto-insurance rates to a managed-competition system in 2008.

But while the Geicos of the world attract consumers with that last $10 off their premium, Anne said, “people buying online have to be astute.”

“They need to know what they’re getting for their dollar,” Kathy added. “A lot of times, people come in here, and we have to explain to them what they’re getting, what they’re protecting. We find that a lot of younger people buying online don’t know what they’re really getting — they just know it costs $400. You have to be educated, and that’s where we come into play.”

Or, as Jim put it, “we don’t want them to find out the hard way that the deductible was $1,000, when they thought it was $500.” Or that they didn’t include collision among their coverages.

“That’s the importance of an independent agent,” Anne said, “to explain what the coverages are, and then you decide what your needs are.”

Added Jim, “it’s more than just buying coverage. All those coverages mean something. It’s not just about the dollars. At the point of sale, that extra money in your pocket sounds like a good idea, but the financial consequences for saving a few dollars could be dramatic.”

That’s just one example of how customer service remains a valuable commodity at T.P Daley Insurance, Anne told BusinessWest. “That’s probably one of the key elements of this agency, our customer service. When you call, you deal with a family member.

“We’re literally 24/7,” she continued. “We give out our cell-phone and home numbers. Especially in the bond business, sometimes you need something tomorrow. I think that sets us apart from other agencies — our love of the service.”

Tom said it all goes back to Thomas Daley never turning anyone away. “Even if it was a tough situation, he always tried to help. He said, ‘give me your papers, and let me see what I can do.’”

Anne said she advised a client on insurance products for six years before writing a policy. “They’d call with questions, and I’d help out any way I could. I knew them from high school. Ultimately, when they needed to make a change, they came to us.”

The Daley siblings hope customers keep coming, and they sense some interest among their own children in turning the business into a third-generation affair someday, but they also know it’s a challenging field, and, like their own father, they want their kids to be sure.

“This is a changing industry, and I think there’s a lot more pressure on people now than there was 20 years ago,” Anne said. “It’s not an easy business, but it’s rewarding.”

Jim agrees. “There have been some dynamic changes from the old-school days to now,” he said. “That’s not to say it’s lost all its luster; it’s still got some positives that make you want to come to work. And I think people here enjoy coming to work.”

Even if they don’t get to climb on heavy machinery anymore.

Joseph Bednar can be reached at [email protected]