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Rick Black Sets an Aggressive Course for TD Banknorth Insurance
As Rick Black commenced a job search last spring, near the end of his 17-year stint with Marsh Inc., the insurance brokerage unit of financial services giant Marsh & McLennan Cos., TD Banknorth Insurance wasn’t on his radar screen — not even a blip.

“I asked a friend in the business what he would do if he was going to start all over again but stay in insurance,” Black recalled for BusinessWest. “He said, ‘you’re going to laugh harder than you’ve laughed before … but I’d take a long, hard look at Banknorth.’

“He was right — I laughed,” Black continued, noting quickly that while he hadn’tconsidered TD Banknorth Insurance Group, the 44th largest insurance broker in the country — with $55 million in annual revenue, compared to Marsh’s $6 billion — he did eventually take a look, and really liked what he saw.

“This was a company clearly moving in the right direction,” said Black, who became president of anknorth’s Massachusetts Region, headquartered in Springfield, in late May. In that capacity, he will direct a multifaceted effort to grow the division and gain market share in a business that is seeing profound change.

His general strategy is to help expand TD Banknorth’s footprint across Massachusetts — and the Northeast — and to grow each aspect of his division — personal lines, small commercial, and the mid-market segment. He will do so through implementation of a shift in business philosophy — from being an insurance agent to acting, as he put it, as a business consultant.’

“By doing so, we can forge much better relationships with our clients,” he said. “This is a somewhat different approach that will help us create more value for our many types of customers.”

BusinessWest looks this issue at the course Black is setting for Banknorth’s Massachusetts division, and how he hopes to take full advantage of the parent company’s aggressive, entrepreneurial way of doing business.

Background Check

When Black was working as second vice president of The Travelers in the mid ’80s, he served as part of something called the Business Diversification Group. This was a team that developed a diversified offering of insurance and banking products that were to be bundled and distributed through the company’s large-employer market.

“It was a little ahead of its time,” he told BusinessWest, adding that it would be several years before this type of product would be commonplace within the financial services industry. Today, he explained, diversification and specialization are the watchwords in an industry where companies can really no longer be all things to all people.

Black has observed a great deal of change in his 30-year career in insurance and financial services, including the demise of Travelers and many other former stalwarts of the industry.

He comes to TD Banknorth from his post as product and development leader for Marsh & McLennan’s Hartford office. He took that position in 2004, just as an investigation of the company by New York Attorney General Eliot Spitzer was unfolding. Spitzer was probing allegations that Marsh brokers were rigging a supposedly unbiased bidding process in favor of insurers that provided the firm with what are known as ‘contingent commissions,’ or what the attorney general considered kickbacks.

Spitzer eventually filed suit against Marsh & McLennan, a development that sent its stock plummeting and eventually led to a $750 million fourth-quarter loss for the company and dramatic changes and cutbacks across the board.

“I knew it was time to move on,” said Black, who, like many Marsh executives, left to seek higher ground.

He found it within the TD Banknorth Insurance Group, the Portland, Me.-based insurance arm of Toronto-based TD Banknorth. As director of the Massachusetts division, he succeeds Joseph Fico, who became CEO of the insurance group earlier this year.

Black said that, upon heeding his friend’s advice to look into the company, he learned that, while Banknorth is small by Marsh’s standards, it has strong growth potential.

“It has a breadth and a depth that would rival some of the giants in this industry,” he explained. “This is the 44th-largest insurance agency in the country, and yet its capabilities would rival some of those in the top 5.”

Black said there are many things about the company that attracted him, including conditions that would enable him to “make a difference,” as he put it. And then, there’s the matter of the company’s entrepreneurial nature.

“It’s about as entrepreneurial as you can get with an entity that is part of a larger corporate organization,” he explained. “We’re in the infancy stages of building a culture, building a value proposition, and building a capability that will truly bring value to a customer beyond what they can garner from a local agent.”

When asked to elaborate on the company’s entrepreneurial nature, Black said this trait applies to everything from acquisition of other agencies to new-product development, to cultivation of the ‘business consultant’ mindset that he described. And, moving forward, he intends to move aggressively in all three areas.

Indeed, as the Banknorth Insurance Group works toward maintaining and improving its 12% growth rate from last year and expanding its territorial footprint — the New York/New Jersey area is the latest target in a move that coincides with TD Banknorth’s acquisition of Hudson United Bank — Black will focus specifically on growing market share in the Bay State.

The Massachusetts division has several offices, said Black, listing facilities in Springfield (the former Palmer Goodell agency), Methuen, Topsfield, a small office in Boston, and three locations on Cape Cod, a main office in Orleans and two satellites in Brewster and Dennis. Throughout that network, which he intends to expand through organic growth and acquisition, Black wants to leverage the many competitive advantages afforded by being part of the Banknorth group.

As one example, he mentioned a broad paradigm shift with regard to how the company approaches business.

“To go after individual clients on a policyby- policy basis may not necessarily be the best way for us to proceed,” he explained.

“If we can aggregate groups, whether they’re employer groups, such as a case where we can sell personal lines to a large-employer group, we can drive a better deal. “If we can aggregate small commercial businesses into groups, such as a self-insurance group, we can create better value for those customers,” he continued. “That will be a clear focus of ours as we move forward; we want to look at alternative ways to solve problems for businesses by aggregating.”

As it looks to grow market share in Massachusetts, Banknorth will make acquisition a key part of that strategy, said Black, adding that as the company adds agencies, it will also bring to bear a different model, a different support mechanism, and new technology needed to achieve established goals.

As an example, he pointed to the Cape,where Banknorth acquired an agency with a long history in the community. In addition to changing the name — a move that drew some criticism in a tradition-laden area, the company also changed the approach to doing business.

“To be successful, we knew we were going to have to do things differently,” he said, eferring to a strategy to aggregate the small businesses that dominate the Cape economy. We became an old-time agency doing business in a very different way.¡± In a broad sense, this is what Banknor this doing across the state and the Northeast, he said, adding that agencies cannot survive if they try to do business as usual.

The Bottom Line

In general, Banknorth wants to continually reshape its focus ¡ª and its business strategy ¡ª to one that is more concerned with solving problems than selling insurance and other products.

This is the way the financial services industry is evolving, said Black, and it is a pattern that will continue in the years to come, as individual companies and industry groups look for value and, as he mentioned, a business consultant.

In this environment, companies that can blend deep resources with an innovative, entrepreneurial mindset have a clear advantage over competitors, especially the smaller agencies that are disappearing from the landscape, said Black.

" We can do many things that those smaller agencies can he explained. Wehave the resources and the imagination to bring real value to our customers and be a leader in this industry.

This is what Black saw in the Banknorth Insurance Group when the company did eventually work its way onto his radar screen.

George OBrien can be reached at[email protected]

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