Click here for Part I & Part III

Helping construction firms intelligently manage their risk

Ron Ebert is the president of the Madison Risk Group, a construction insurance brokerage in the Philadelphia area. Established in 2013, MRG provides mid-market construction firms (contractors with annual revenues of up to $250–300 million) with cost-effective and flexible risk management services underpinned by industry expertise. The brokerage stands out not only for its unwavering industry focus, but also for its unique MRG Blueprint program, which offers clients hands-on support and education.

EDWIN WARFIELD: New insurance firms don’t get founded every day. What challenges did you face in starting out?

RON EBERT: The way we started an insurance agency was somewhat unique. I was able to amicably part ways with EH&D and buy my book of business. That doesn’t happen too often in our industry. The clients get involved if there’s an issue on a non-compete, so Zina, Bill, and I basically said to EH&D, “we have this vision and this is what we want to do” and they supported us. They allowed us to take our book of business.

The next tricky thing in starting an insurance agency is you need carrier contracts. We only had so many accounts, but our reputation with the carriers that we had been working with—they all really stepped to the plate for us. What happens is these carriers want a certain amount of business—well, we weren’t able to hit that right out of the bat, but they basically showed faith in us and said, “we know you guys are going to get there.” And we were off and running, getting the carrier contracts we needed to service the clients in the Philadelphia area, the clients we had and the clients we were going to—and have since—obtained.

Q. Tell us about the MRG Blueprint. How do you use it to differentiate yourselves?

A. The standard idea of an insurance broker is you’re a middleman. You’re not really taking any risks. So, the lines of coverage we sell to a contractor—whether it’s workers’ comp, general liability, automobile, umbrella property—we’re putting these contractors in touch with the carriers and we’re negotiating premiums and we’re negotiating coverages and programming the coverages. There’s a transaction there where the carrier issues a policy and the broker services it—issues auto ID cards or certificates.

The MRG Blueprint is a little bit different. Our agency was built specifically to handle mid-market construction accounts. When I say “mid-market,” I’m talking revenue anywhere from $5 million to $300 million in annual sales. It’s mostly the guys—if you see the cranes up there, in and around Philadelphia—those are the clients we’re going after. The Blueprint was how can we separate ourselves from the competition and not just be that broker that’s transactional—“here’s your bill, here are your policies, let’s go golf?” We’ve set this up to say: What do contractors need from their risk manager? And it was through years of experience and development that we came up with the Blueprint. It’s basically trying to take the heavy lifting off of our clients; putting together a detailed program that they see on a calendar basis, but every month our involvement with our account—whether it’s going out to see job sites, claim reviews, policy delivery, answering questions, getting involved in bids, putting on seminars for their employees as far as how to operate safely—those are the things we do, and we do it specific for each client when we bring them in.

Q. Do you think MRG will continue to remain independent in light of all the M&A activity going on right now in the insurance industry?

A. It’s unbelievable what’s going on in the insurance industry. Private equity money right now is flowing in. Insurance brokerages are historically profitable, so this private equity’s looking at this and saying, “hey look, there is a spread here that we capitalize on,” so rollups are constant. We view it as a godsend. We get calls constantly to get bought up, especially because of the client base we have, and that we’re a niche construction broker.

Our growth strategy is to remain independent. There are so many invaluable assets to being an independent broker rather than having to answer to the shareholder or the big national organization. We’re a flat organization. Our commitment to remaining independent is also another key to our growth, because every one of our employees when they get brought in is instructed: “you have a chance to be president in this place and the owners of this organization—and luckily the three of us are all the same age—our intent is to transfer it to the next generation of leaders. We have no desire to sell this and go through a merger or acquisition. We created this, we want to protect it, and we want to be able to pass it on to the people that have built the company, which are our employees. And it’s a great way to keep retention and give everyone a career path that comes in the door and say, “What is your story? How can our agency help you? What do you want to do with your career? And if it’s here, great, we will support you and the sky’s the limit for you.”

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Sponsored by:

ABOUT NEWMARK KNIGHT FRANK

Newmark Knight Frank (NKF) is one of the world's leading commercial real estate advisory firms. Together with London-based partner Knight Frank and independently-owned offices, NKF's 15,000 professionals operate from more than 400 offices in established and emerging property markets on six continents.

With roots dating back to 1929, NKF's strong foundation makes it one of the most trusted names in commercial real estate. NKF's full-service platform comprises BGC's real estate services segment, offering commercial real estate tenants, landlords, investors and developers a wide range of services including leasing; capital markets services, including investment sales, debt placement, appraisal, and valuation services; commercial mortgage brokerage services; as well as corporate advisory services, consulting, project and development management, and property and corporate facilities management services. For further information, visit www.ngkf.com.

NKF is a part of BGC Partners, Inc., a leading global brokerage company servicing the financial and real estate markets. BGC's common stock trades on the NASDAQ Global Select Market under the ticker symbol (NASDAQ: BGCP). BGC also has an outstanding bond issuance of Senior Notes due June 15, 2042, which trade on the New York Stock Exchange under the symbol (NYSE: BGCA). BGC Partners is led by Chairman and Chief Executive Officer  Howard W. Lutnick. For more information, please visit www.bgcpartners.com.

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If you're interested in reaching CEOs, please contact edwin.warfield@citybuzz.co

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