BB&T reduces costs, enhances servicePosted On: Nov. 14, 2011 12:00 AM CST
RALEIGH, N.C.—For H. Wade Reece, chairman and CEO of BB&T Insurance Services Inc., earning the coveted spot of most productive broker among the world's 10 largest brokers is the sum of two intersecting events—expense reduction and service quality enhancement.
For BB&T, both are going in the right direction. “There's no magic formula—just doing things better and better,” Mr. Reece said.
More than 20 years into heading BB&T's Raleigh, N.C.-based insurance operations, Mr. Reece previously worked in the firm's banking network. In fact, BB&T has been his sole job since graduating from North Carolina State University, not to mention a passion.
Known for his open, easygoing manner, the outdoorsman (and an ambassador for Trout Unlimited) approaches business much the same way as he does trying to hook a 20-pound bass—with patience.
“We have what I'd call old-fashioned expense control here. We always ask: ‘Is it just nice to pay for something or really necessary?' A lot of times, we find that it really isn't necessary, and this helps to develop good expense discipline. I'd like to think our people are pretty thrifty,” he said.
Last year, BB&T generated nearly $1.08 billion in revenue with a staff of 4,402 employees. Divide the latter into the former and out pops an enviable metric—$245,020 in revenue per “thrifty” employee, making the brokerage the most productive among the world's 10 largest brokers in the 2011 Business Insurance ranking.
Founded in 1922, BB&T is a wholly owned subsidiary of Branch Banking & Trust Co., a large, publicly traded financial services company. Its tentacles stretch across much of the United States, although its densest presence is in the country's heartland.
The broker touts more than 100 agency locations and more than 150 locations in all for insurance operations. Its services include personal and commercial lines, employee benefits, life and financial planning, surety and commercial bonds, and title insurance.
Services to clients for personal lines and small business lines adhere to a centralized operating structure—a factor in the firm's enhanced productivity, Mr. Reece said.
“We took a total quality management approach to driving higher quality levels throughout our agencies, and came to the conclusion that a centralized approach, where everything is managed out of one building (in Greensboro, N.C.), would generate improved productivity, and it certainly is,” he said. “We've been able to reduce transactional and operating expenses, which gives us more financial wherewithal to invest in the sales and services sides at our agencies. We're moving the numerator into the denominator by reducing our costs, putting this into client service, which results in more sales and, ultimately, generates more revenue.”
This may not sound like a magic formula, but it isn't smoke and mirrors either. A key element of BB&T's successful centralized approach is its Insurance Services Client Center in Greensboro. At the center, a staff of more than 250 handles personal lines client service and processing, flood insurance and family risk management, among other services.
On the commercial side, the staff takes care of similar services, other than flood. The staff also provides complete claims-handling services, systems support, quality assurance and administrative services. The work is not for the fainthearted—more than 300,000 telephone calls are fielded annually and more than 250,000 policies are serviced each year.
The center also provides training and development to other company employees. “We've got a player-coach model here,” said Mr. Reece. “It's a flat organization, where our managers manage but also produce (business). They have their own client portfolios themselves, because we want them out ‘touching' the clients. That helps them be better managers, and assists greater productivity now and in future.”
The firm's size and financial clout have helped improve technology, yet another factor in its superior productivity, the longtime CEO maintains. “We could always do things better and are always looking for that,” said Mr. Reece. “But, other than the client center, we've really made no big strategic shifts in the past year. We're fairly mature, I'd say.”
“When you're owned by the public, we owe it to our shareholders to produce as much as we can for them at the least cost,” he said. “But, truthfully, we do it more for our clients than anyone.”
This article appears in a special editorial feature 'The Business of Better Broking,' which includes profiles of the most productive agents and brokers, exclusive rankings and more. Download a PDF version here.