Tom Golub, the young and energetic president of Beecher Carlson, is a realist with a keen sense of place in the brokerage business, a man who knows as much about what he can't do well as what he can do well for his customers. "Customer," incidentally, is a word that insistently dangles off the edge of his tongue. I learned these lessons in a hurry when I sat down with him not long ago in his Atlanta headquarters.
"The way I think about the business is from our customers' vantage point," he says, "from (where) there are the three big brokers, each of whom has been around in some form for quite a few years. They're the main consumer brands in the marketplace, and each of them can do just about any form of brokerage work. If that makes them first tier, then I guess it's fine to call us second tier."
Golub thinks of his business as an alternative choice, delivering very specific products and services to those whom Beecher Carlson can best serve. "In the universe of commercial insurance clients, the vast majority are folks we cannot serve well," he says, "so we're targeted in terms of . . . which customers we think we can make a positive difference to."
He says when you're competing as a somewhat smaller player against other players that are many times your size, you need to have differences; you need to have products and services you can deliver better, or that the "Big Three" just flat out can't deliver, which means you've got to go into deeper and narrower areas.
Beecher Carlson thinks of specialization in terms of "industry verticals," areas where they've had depth and expertise for a number of years. First and foremost is the hospitality industry, but there are others, like the retail sector and the construction industry--specifically, the home-builders sector and all aspects of residential construction.
They look to match these industry verticals with specific practice areas, like executive liability, directors' and officers' liability, errors and omissions, employee liability and complex property insurance coverages.
An example of an industry vertical, he says, would be executive liability in the telecom industry, where the risk exposures for E&O, D&O, and EPLI are truly unique. "To be in a position to meet the customer needs and expectations, you need to deliver a lot of expertise and experience from within that industry," he says.
Lodging is another example. There, many of the chains have very difficult risk exposures in the first-party property arena, whether they're coastal storm exposures, earthquake exposures or just fire hazards.
"What we look for in industry verticals is for acute exposures in places where we specialize," he says.
Once the exposures of larger companies are understood in an area where Beecher wants to make a strong commitment, they feel it's easy to go downstream within that industry. "The risk exposures will be identical, but on a much smaller scale," he says. "People often think about our business as being focused on large account business, and that's where we start, but our intention and our execution is to go downstream within that industry once we've solved problems for the biggest customers.
"It's a reverse marketing scheme, starting with the largest going down, though conventional marketing tells you to start with your smaller customers and work your way up," says Golub.
Drilling down, moving against the grain, seems to be working for Tom Golub and for Beecher Carlson.
THOMAS J. SLATTERY,
a veteran editor and writer on industry affairs for more than 40 years, is also the managing director of Slattery-Esterkamp Communications, Baldwin, N.Y.
April 1, 2006
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