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Executive Summary
Company. Lykes Insurance Industry. Insurance Key. Company has new CEO, one of several leadership changes.
Insurance brokers and agents at Lykes, who go by the more affable term advisors, have no problem telling potential clients no.
They don't turn away new business, per se. Instead, a Lykes advisor will reject any query from a possible client who asks them for a quote for new business. Quotes on demand, says Lykes Insurance President and CEO Bill Taulbee, defeat the firm's core philosophy, which is to de-commoditize insurance services.
“You can always find insurance for one dollar less or one dollar more,” says Taulbee. “But insurance isn't about today's risk. It's about tomorrow.”
While it might cost Tampa-based Lykes the occasional client, the unorthodox sales approach works. Growth has been solid in recent years, says Taulbee, and annual premiums are up to around $125 million.
The 60-employee company handles a variety of commercial insurance work for clients, mostly midsize businesses, in a range of industries, including agriculture, transportation, construction, banking and hospitality. It also does private risk assessments, surety bonds for contractors, workers' compensation insurance and employee benefits consulting. The company has offices in Fort Myers, Sarasota and Winter Park, in addition to downtown Tampa.
Lykes Insurance, a unit of Lykes Bros., a business conglomerate and one of the more prominent Tampa area business families, also recently went through some leadership changes. The biggest one: Taulbee was named CEO and president in January, after previous top executive John Brabson retired.
Taulbee leads in a team-based approach, where a group of executives make key decisions together. The pod includes Executive Vice President Rob Pariseau, who runs the employee benefits division; COO and CFO John Hahne; and Mark Webb, a senior vice president in commercial insurance who also oversees the Fort Myers office.
The foursome, says Webb, is congenial yet blunt in talking about ideas and company strategy. “I would acknowledge that it doesn't always make sense to do it this way,” Webb says. “But it brings us a variety of perspectives in knowing not any one person has all the right answers.”
Be different
While Lykes advisors don't provide rate quotes at sales pitches, like many competitors they do often talk up what they believe are the things that make Lykes different.
One area for that is the firm's three licensed adjusters and two Occupational Safety and Health Administration certified loss control experts. It's a large investment in non-revenue generating positions, but Taulbee says it's worth it toward the de-commoditizing insurance goal. “Our clients realize quickly that these added value services reduce their insurance cost drivers,” Taulbee says.
Lykes also does an extensive amount of training with clients on a host of insurance issues and ways to reduce costs. Then, if and when a prospect is ready to sign on, a Lykes advisor will talk price. “We want our clients to view us as an accountant and a business advisor,” says Taulbee. “We are process driven. We are not procurement focused.”
Employee benefits consulting is one of the fastest-growing business lines at Lykes. Pariseau talks to could-be clients about long-term planning for benefits, and tries to avoid being reactive on the news of the day. “If all you want to do is to sit back and react to rate increases,” Pariseau says, “then you aren't in our target market.”
Webb says Lykes takes the same approach with workers' comp policies. The company talks to clients about ways to bring down risk, and improve safety before it talks contracts.
Clients, Webb adds, have saved significantly by making internal changes before getting a new policy agreement. “We have a lot of sophisticated expertise you don't find much in this area,” Webb says. “It's not just a program or policy you buy.”
'Strong foundation'
The entrepreneurial base to Lykes Insurance stems from the Lykes Bros., where the portfolio of business interests has varied widely over the last century. It's spanned from banks and berries to smoked sausages and steamships at various times. Holdings now include a ranch, citrus and land investments, in addition to insurance.
Before Lykes Insurance, Brabson ran Tampa-based Peoples Gas, a Lykes entity that grew into the largest privately owned natural gas distribution company in the country. TECO Energy bought Peoples Gas in 1997.
Married to a granddaughter of one of seven Lykes brothers who founded the original business in 1910, Brabson was brought out of semi-retirement in 2009 to take over the insurance arm. His mission: Turn Lykes Insurance from a company that mostly does risk protection for other family holdings into a statewide leader among middle market business clients.
Brabson was successful, to the point where Lykes family holdings are now merely a handful of the insurance unit's book of business. It's the equivalent, Taulbee says, of a “nice large customer.”
Taulbee's mission is to continue and improve on what Brabson accomplished. “I'm coming on board with a strong foundation,” says Taulbee.
Lykes hired Taulbee in 1985, when he says he was the firm's “token young guy” coming out of the University of Florida. Taulbee left Lykes in 1995 for an entrepreneurial challenge, when he bought and ran an auto parts distribution company. He grew the company, merged it with another business and sold it in 2001. That led him back to Lykes, where the central Florida resident opened the company's Winter Park office. Says Taulbee: “My heart was in insurance.”
One of the core challenges Taulbee faces at Lykes is to find and retain top people. After trying multiple recruiting strategies, from search firms to college fairs to industry job boards, the company recently took a different approach: It hired a firm in Texas that finds salespeople in non-insurance industries and recruits them specifically for insurance companies. The company provided 15 top candidates out of 100, and Lykes recently hired three people from the list.
Taulbee has dream-big goals for the future, even with the challenges. “We feel we as though we have the experience and knowledge to really grow,” Taulbee says. “We want to be the beacon on the hill. We want to be the place where employees want to work and the agency businesses desire to handle risk.”
Political theater
Lykes executive Bill Taulbee was plenty busy in 2007, running the central Florida office for the commercial insurance firm, when some friends in his Bible study group pushed him to challenge himself.
Taulbee spoke semi-regularly about running for office. Now, his friends urged, was his chance. He ran for a seat on the Maitland City Council — and won. The one term he served on the council for the Orange County city, an Orlando suburb with a population of about 15,000, was an eye-opening experience for the businessman. Taulbee's term was from 2008-2011.
Taulbee, used to the speed of business, was jolted by the time it took to move things down the line. No matter how seemingly small, there were always tie-ups. “The delays that exist in municipal government are alive and well,” Taulbee recalls of his term. “Everything you heard about politics and government, it's true.”
With credit to his measured and methodical insurance executive's mind, Taulbee says he was research and fact-based on the council, while others, at times, were swayed by groups or factions. The approach, says Taulbee, brought additional pressure and scrutiny. “I had to develop a whole new level of patience while learning the importance of diplomacy,” he says.
Overall, Taulbee says he enjoyed his time on the council, and he believes everyone should do something in civics and for the community, if not run for office. But one challenge, he adds, is the job took up about 25 hours a week, for what was a $230 monthly stipend. “That didn't even cover my cell phone bill,” quips Taulbee.
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