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NEW YORK—Any broker will tell you that client service separates the winners from the losers.
At Frank Crystal & Co. Inc., client service is viewed in terms of the quality of the people providing it—and then retaining these talented individuals for their entire careers. As Jim Crystal, chairman and CEO of the privately owned brokerage, puts it, “People are our most important product.”
Note that Mr. Crystal, who has more than 40 years of experience in the insurance business, did not say “most important asset.” Indeed, he sees the insurance business as less about insurance products and more about developing high-quality producers and support staff to provide exemplary service to clients.
“We have a very strong emphasis here on recruiting and retaining top talent,” he said. “Our employees are the ‘tail wagging the dog.'”
Apparently, they are wagging it well. Among the top 100 brokers of U.S. business in the 2011 Business Insurance ranking, New York-based Frank Crystal & Co. is No. 1 in productivity.
Last year, the firm had $131.5 million in brokerage revenues with a staff of 420 people. This works out to a best-in-class $313,167 in revenue per employee.
Chalk up its success to those hard-working employees Mr. Crystal enthuses over. Many employees expect to spend their careers at the firm, he said, which fosters a sense of security that allows them to focus squarely on the client, not their careers.
“We give out 30-year pins here,” Mr. Crystal said.
His father, Frank Crystal, started the business in 1933 in New York's financial district, then exclusively serving the brokerage needs of financial institutions. As these institutions invested capital in new ventures and expanded, the agency scaled its service and product offerings to their needs and those of their directors and officers.
Gradually, Frank Crystal & Co. expanded into other industries and regions. It provides full-service insurance brokerage, risk management and employee benefit solutions to a wide range of industries—from aviation, education and energy to manufacturing, marine and media, among others.
Under Jim Crystal's leadership, Frank Crystal & Co. serves more than 9,500 clients from its corporate New York headquarters, with offices in Washington as well as California, Florida, Oregon, Pennsylvania and Texas. It also continues to spread its wings, recently expanding its Miami and Los Angeles operations, the latter now giving it a footprint in Southern California as it also opens offices in the San Francisco Bay Area.
Aside from its swelling revenue stream, another factor in the firm's productivity is its status as a privately held business, Mr. Crystal said. “In a private company, you can reinvest as you think it is important and where this is important,” he said. “We don't have to manage quarterly earnings per share for shareholders' benefit.”
Rather, the broker avoids the topsy-turvy stock market and the capital strain this creates. Thus, it can preserve the high level of service provided to clients and the careers of those providing this service, while maintaining control over its expenses. Like all brokers, Frank Crystal continues to seek ways to reduce expenses—without tossing the baby out with the bathwater.
“We're a little bit more tightly controlled, so we therefore have the ability to react to a positive or negative event quicker,” Mr. Crystal said.
“The management committee here can drill down to all areas, whether it's underwriting, sales, product line or technology, to scrutinize where we stand at that moment,” he adds. “Nothing gets ignored. If it seems expenses are rising in an area, we can take immediate action to learn why. If needed, we can resolve this quickly. It's not easy to make changes fast when you're a monolithic public company.”
He also said that having a long-term relationship in the brokerage business is crucial. “We aspire to de-transactionalize and de-commoditize the business to where the client feels we are a de facto business aide,” Mr. Crystal said. “And we do this by matching them up with the producers who are best suited to handling their accounts.”
Producers assist commercial accounts with more than just insurance. Frank Crystal provides consultative services that run the typical gamut and even include the ramifications of various taxes and health care reforms on a client's business. “In this weak economy and soft market, clients are eager for solid advice,” Mr. Crystal said.
Down the line, he said the key to staying productive is for Frank Crystal & Co. to maintain its private status, still seeing it as a family business. “I don't want to take a swipe at public companies—it's just a different type of transaction,” he said. “I'm on the boards of several public companies; and when you're huge, it is hard to turn the cruise ship around quickly.”
In a sales-driven service industry, said Mr. Crystal, “I just happen to believe that being private and lean is a better model.”
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.
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