Left to Right - Chad Maxwell and Bryan Whipple

In an age when Internet-based insurance brokerages promise cost savings with a few clicks of the mouse, Brooke Corporation through its subsidiaries has found growth by moving against the grain, establishing nearly 1,000 local insurance franchises where the personal touch remains front and center.

Brooke family of companies is built on the philosophy of founder Robert D. Orr, who captured his ideas for the company in a book published in 2000 entitled Death of an Insurance Salesman? In it, Orr writes about the value that locally owned insurance agents can bring to their customers and also lays out how Brooke’s support network can enable local brokers to focus on those customers by letting the corporation handle much of the back office work.

The model grew out of a need to give locally owned agents better access to capital to foster growth and access to a broader range of products from insurance companies themselves. Brooke recognized that need as it expanded a network of insurance agencies in the Kansas and Nebraska area in the early 1990s. Brooke began to leverage its insurance company relationships and production volume to improve its buying power and before long the power of affi liation became clear.

“We provide our franchisees, local owner agents, access to markets they may not be able to access on their own,” says Kyle Garst, chief executive officer of Brooke Capital Corporation, which is the franchisor of the agencies. Many insurance carriers have minimum premium thresholds that must be met and without a network, small locally owned insurance agencies are often unable to meet them. “We also provide access to capital so whether they are a startup or acquiring or expanding, we have conduits to provide them the financing they need to support their endeavors.”

“The crux of the model is looking at how we can bring big company benefits, tools, and suppliers / product to the local owner,” adds Brooke Capital chief operating officer Dane Devlin. The result is local franchisees who can offer consumers a range of quality choices, with many offering insurance from the likes of AIG, Safeco, Progressive, Liberty Mutual, Metlife, The Hartford, Chubb, Travelers, Blue Cross and Zurich. In all, Brooke has relationships with some 500 life, health, auto, home, and commercial insurance providers.

By contrast, a growing number of insurance companies are doing business by phone or Internet only, with consumers able only to choose from a single carrier—and without the benefit of a local owner agent to consult with in person.

Equally valuable is the branding and marketing expertise Brooke provides through its advertising center as well as back-office necessities such as document imaging, real estate identification and set-up support, commission allocation, compliance, budgeting, human resources and cash management.

The result is that franchisees can spend more of their time focusing on building out their customer networks. “Our franchise model allows owners to focus much of their attention on building their own referral networks,” says Devlin. “Some franchises are more successful than others and the main difference is the franchisees themselves and how well they take the tools we offer and implement them to their benefit.”

Based in Overland Park, Kansas (a suburb of Kansas City, Missouri) and originally focused on the Midwest, Brooke now has more than 900 franchise locations in 26 states the US, taking in a wide geographic area that runs from coast to coast and includes growth markets such as Texas, California and Florida. The company has been adding between 150 and 200 franchises per year over the past several years, putting it on pace to pass 1,000 nationwide franchises by early 2008.That’s a key milestone, says Devlin, because the company
is beginning to see reduced need to add support staff and infrastructure as more franchises come on board. “We hit some key economies of scale at that level where we don’t have to add personnel at the same rate as we grow,” he adds.

The growth has gotten Brooke noticed. It ranked 37th in the 28th Annual Franchise 500 survey conducted by
Entrepreneur Magazine, the 17th fastest-growing franchise and the top franchise in the miscellaneous financial services category.

Brooke Corporation recently restructured, merging a credit unit (Brooke Credit Corporation) with another company, and merging the insurance franchise operations (Brooke Franchise Corporation) with its insurance company operations (Brooke Capital Corporation) in November.

Brooke Capital Corporation is publicly held and traded on the American Stock Exchange listing under stock symbol BCP. The moves were meant to enable the same entrepreneurial ideals that make its franchises strong, to work in the corporate office as well. “We’re very entrepreneurial,” Garst says. “We wanted to get all of our insurance operations under one roof to help clarify our story and provide management ownership to retain, reward and perpetuate our success.”

Just as franchise owners have ownership, so now do key executives. “The primary reason for the success of the franchises has been that their success is up to them. They are vested in their local ownership,” says Garst. “We want that same culture to continue all the way through our organization.”

Article Writtedn by: Keith Regan
Acheiving Business Excellence
February 2008 Magazine Edition
Pages 127-128
www.bus-ex.com