Cross Insurance extends its reach

LACONIA — "Everyday decisions are made at the local management level," said Steve Wainwright, one of a half dozen insurance agents in the Lakes Region who recently sold their businesses to Cross Insurance of Maine. "We're not sending memos to Bangor and waiting for a reply."

"They wouldn't get one if they did," snapped Royce Cross, who heads the firm his father Woodrow started in his dining room in 1954, which has grown into the largest independent agency in Maine and New Hampshire. While expanding the company, Cross has structured its management and operations with an eye to sustaining and nurturing the longstanding relationships forged by its local subsidiaries."There is no middle management," he said.

Along with Wainwright Insurance Services, with offices in Alton and Wolfeboro, Cross has acquired Munsey & Brazil, Inc. and Hurt & Forbes Insurance, both of Laconia, Horne Insurance Agency of Meredith, Clyde B. Foss Agency, Inc. of Moultonborough and the Main Insurance Agency of Plymouth. Altogether the agencies employ more than 50 people.

With another eight offices in the state, Bob Nash, president of the Independent Insurance Agents and Brokers of New Hampshire described Cross as "the largest single agency in the state by far." He estimated that the company writes about 60-percent of the property and casualty business in Maine. ,

Nash said that seven years of an increasingly soft and competitive insurance market has hurried the pace of consolidation. He explained that independent agencies, which may sell the products of six to twelve companies, are under mounting pressure to increase premium volume just when consumers, especially commercial customers, are reducing their coverage to spare costs. Meanwhile, independent agents also face competition from large national carriers like All State, State Farm and Geico with aggressive marketing campaigns. As competition has led to lower rates, companies have adjusted their commissions to match premium volume, squeezing the profits of independent agencies.

"The little guy finds it hard to compete," Nash said.

"Independent agencies may have a tough time on their own, but collectively they become very competitive, said Randy Eifert, who recently left Melcher and Prescott in Laconia to manage the Cross office on Court Street. By merging with Cross, he said that the agencies kept their local character while gaining access to between 80 and 100 insurance companies as well as to the resources of a firm with more than 30 offices and 400 employees. "There has been no change at the local level," Eifert stressed.

"It's difficult to compete with the advertising (of big national companies)," Cross conceded, "but not to compete with product, price and service." The competitive advantage of independent agents, he continued, is their ability to draw on the products of different companies to tailor a package suited to the needs and requirements of the customer.

Nash said that since the value of independent lies in the number and quality of their accounts, the aim of an acquirer like Cross is to assist its subsidiaries in retaining as well as adding customers.

Cross said that "insurance is about relationships and trust,. You lose the trust and it's all over." He emphasized that when Cross acquires an agency it strives to maintain longstanding local relationships. That is why, he said, agencies not only operate under local management but may retain their own name for a spell after being acquired before transitioning to the Cross brand.

"Not changing the name is an indication that we're not changing relationships," Cross said.

Likewise, he said that there has been no discussion about merging the two offices in Laconia, adding that although there might be some cost savings in the near term, "it would be shortsighted."

David Haley of Munsey & Brazil recalled when Cross first approached him about acquiring the agency. "It was not something I was thinking about," he said. "But I heard about Cross, how they operate and treat their acquisitions and realized it was the right opportunity for me, my family and our staff. You can imagine the trepidation in the office," he continued, "and how it disappeared when people were assured there would be no changes."

"It's about people," Cross insisted. "It's people that will make the difference." He said that the parent company can provide technology that some of its smaller subsidiaries may require and, in the rare cases it is needed, add "talent."

As a family firm, Wainwright said Cross represents a good fit with the local agencies it has acquired.

Cross said that his father, who is now 93, remains active in the firm, arriving at the office promptly at 7 a.m. every day.

Wainwright remembered, when he was being courted by Cross, visiting the office in Bangor to take a close look at the company. He said the first person he met was Woodrow, who quizzed him about his business for an hour. "I returned to my office," Wainwright said, "to find an e-mail asking for some management reports from Woodrow."

Cross's son John and brother Brent also work for the company.

Cross said that the firm has closed at least one acquisition every year for the past 27 years and now has 14 offices in New Hampshire, 15 in Maine and two in Massachusetts — all within two hours of the operations center in Portland. "Bangor is further away than most of our other offices," he laughed.

"There is a lot to relationships," Cross remarked, returning to a favored theme. "Different people are good at different things," noting that local managers and employees can draw on the knowledge and experience of their colleagues throughout the company. "Our people are never more than one person away," he said. He said that he would not extend the geographic reach of the firm beyond "a day trip until we run out of opportunities. There are plenty of opportunities here and they're increasing as rapidly as we can handle them."