Marty Rhodes, President and CEO of Stephens Insurance, on Risk Management (Exec Q&A)

Marty Rhodes sold his insurance agency in 2002 and became president and CEO of Stephens Insurance LLC three years later.

Career: Marty Rhodes began his insurance career in 1973 with Fireman’s Fund Insurance Co. He founded Rhodes & Associates Inc. in 1986 and sold it to Brown & Brown, a publicly traded broker, in 2002. He joined Stephens Insurance as president and CEO in January 2005.

Background: Rhodes is the current chairman of the Little Rock Regional Chamber of Commerce. He also serves on the board of trustees of Hendrix College at Conway, where he earned a bachelor’s degree in 1972. He is a past president of the Rotary Club of Little Rock and a past chairman of the Boys & Girls Club of Central Arkansas. He also serves on the UALR College of Business Advisory Board and the board of directors of Arvest Bank, and he is a member of Fifty for the Future.

Q: Stephens Insurance has been on a shopping spree ever since you joined in 2005. Do you foresee more acquisitions and what markets might you be targeting?

We actually have not been on a shopping spree. Our acquisitions have been very strategic and we have concentrated on getting the right people in place within our insurance organization. We will continue to add unique individuals that fit our culture and add breadth and depth to our team. So far this year we have added four teams to our group, and they have all been in the Little Rock marketplace. These teams have ranged from public utility specialists to a transportation specialist to the brokerage firm that has the largest book of physician’s medical malpractice in the state. I might add that in addition to the teams we have acquired, our organic growth has been in double digits every year since 2005.

Q: We’ve seen some other agency mergers in Arkansas as well. What’s driving the consolidation of your industry?

In my view there are two primary factors: 1) insurance companies’ quest for more and more premium volume; and 2) the economies of scale of joining forces with another insurance agency.

Q: What are the biggest changes you are seeing in the insurance industry right now?

Health care reform is certainly at the top of the list. Stephens Insurance has been very proactive in advising our clients and perspective clients in preparation for full implementation in 2014.

Q: What’s the best advice you have for executives who are responsible for risk management? Are there things that are routinely neglected that should be high priorities?

Underwriting relationships. Too often agents don’t allow the underwriters a proper amount of “face-time” with clients. Our business is very people-oriented and to deny this is costing the buyer real dollars. Those personal relationships with current and prospective underwriters need to be developed. Data friendly. The biggest complaint from underwriters throughout the industry is not having the analytics behind a risk. Our clients that have command of their data are able to obtain better terms from insurance companies. Maintain your claim data in an easy to read format, be able to explain the impact of your risk management practices, and get upper management buy-in to your department and its efforts to create sustainability for your business.

Q: Who was the most important influence on your career in insurance?

There have been many over my almost 40 year career, but three who stand out were Sterling Frank, Dick Womack and Warren Stephens. My first job in the insurance agency business was with Sterling Frank in Dumas. Sterling was the consummate professional and extremely knowledgeable. Dick Womack, who was president of McGriff Seibels & Williams Inc. in Birmingham years ago, also had a very positive influence on my insurance career. And now, because of Warren Stephens’ commitment to quality and to growth we are one of the top 60 largest insurance organizations in the U.S.