For Alper Services, Insurance Is Just the Beginning

Though insurance is a major component of what it does, Chicago-based Alper Services doesn’t have the word “insurance” in its name for a reason. That’s because from the very beginning the company has aimed to be more than simply an insurance agency.

Celebrating its 50th anniversary this year, the firm was founded in 1966 by Howard Alper, who now serves as chairman. Alper currently has 55 employees in its Chicago headquarters, as well as a satellite office, the Zhou Agency, which has four employees and specializes in serving Chinese-American clients.

Alper Services was created on the premise that “we would be so much more than an insurance agency. Though insurance agency and brokerage work would be integral to our work, it would only be one part of what we do,” said Alper President and CEO David Macknin.

Knowing that there are a lot of good insurance people in the business, the agency posed the question: “What could we do differently?” Macknin said.

As a result, Alper embraced the enterprise risk management model in the sense that insurance is part of the operation, but “it’s not the be all, end all unto itself,” he said. Building upon that philosophy, Alper’s goal is to “over-serve” clients with a variety of services beyond insurance.

“Specifically, our suite of services ranges from employed safety consultants, forensic accountants, nurse case managers for lost time workers’ compensation, to detailed claims analysis on causation and trends. Data and what it means, and therefore what you can do with it. We have always employed claims advocates, not just claims clerks, if you will. Very active claims advocates, and we are blessed to have a general counsel on staff who spends most of her time advocating for client positions,” Macknin said.

In addition, Alper maintains a full financial services division, and has expanded into HR and wellness consulting.

Integral to the effort “is something we call Alper Access,” Macknin said. Under this formal program, “all of our business development people must meet with their top clients, each and every year, and not talk about insurance. That’s hard for an insurance person. An insurance person can’t do anything without talking about insurance, but the premise is, what can we do for our clients to make connections?”

As an example, Macknin said at a conference on the Chinese economy he met a man who makes a tool that he wants to have manufactured in China. After gathering a little more information, Alper’s team was able to connect the man with an Illinois-based client who owns a manufacturing facility in China’s Guangdong Province. The two parties have since drafted a business agreement.

“We don’t derive a penny from that. We get good will. It’s an institutional program of Alper Access,” Macknin said.

Alper also uses a “team of experts” approach to team selling, in which the client knows that each Alper employee not only is an expert but also is part of a team.

“The statement is, I’m surrounded, and therefore you and your people are surrounded, by a team of experts. We are a single source for all lines of the managing of risk, and the insurance transfers of risk,” Macknin said.

Expansion Plans

Alper’s expansion plan includes acquiring smaller agencies — such as those with revenues in the quarter of a million dollars to $2 million range — as well as continuing its pattern of organic growth. The agency is approaching $10 million in commissions for 2016 compared with just over $6 million four years ago, as of March.

“We’ve had pretty substantial growth in a market that has seen property and casualty rates fall precipitously, and a health insurance market that has had off-the-charts contraction in the number of players available,” Macknin said.

The plan also incorporates an international component. In addition to adding the Zhou Agency last year, Alper entered into a partnership with uNISONBrokerage, a global network of brokers. And in February it launched a third enterprise, Alper Global Trade Risk Management, which is focused on trade management and political risk insurance.

Through those three organizations Alper aims to serve clients who are expanding internationally. Whether it is to Asia, Europe, Mexico or South America, “we need to be able to deliver to them best-in-class solutions, just as if they were opening up in Chicagoland,” Macknin said.

The Generational Mix

When Macknin came on board four years ago, the demographic of the company “was skewed pretty old,” he said. So, like most other organizations today, Alper has been faced with the graying of the industry and the challenge of recruiting a younger workforce and figuring out what makes them tick.

He told a story about a new assistant the company had hired to work with him: “At my former firm, I had a 14-year assistant. The person knew my every move, knew what I needed, etc. My first week here at Alper, I had a young woman who was 21 years old, or 22 years old. …

“I needed to go to New York for business, and she came into my office. I told her what I needed, the time of day I needed to fly, where I’d like to stay, etc. She didn’t know my profile, so I had to give her my profile, when I had to get back, and such. She was across my desk, looking down, and I said, ‘Theresa, please,’ thinking she wasn’t paying attention. And she looked up at me and said, ‘Do you want an aisle seat, or a window seat in row 20?’ Because she was on her phone booking everything.”

That was an “aha” moment for Macknin and he realized the firm had a lot to learn about multiple generations in the workforce. He commissioned a study and found that from a psychoanalytical standpoint the millennial generation is not so different from the World War II generation.

“They’re risk takers, yet they want regimentation,” he said. They are both team players who want to be coached, and are used to a lot of feedback.

Through the study, “we came to understand the generation, perhaps in a way that others hadn’t yet. We started taking actions that would demonstrate our understanding.”

The Firm That Can’t Be Sold

Last year Alper Services was placed in the Alper Services Trust (AST), which basically holds that the firm cannot be sold.

Under the conditions of the trust, if “the company loses money for three successive years, which knock wood will never happen, if it lost money for three successive years, the company’s board must liquidate the company,” Macknin said.

All obligations would be paid first and whatever remained would go to a designated charity.

“No one gets a payday if the company is sold. The course we like to believe we’re on, and will be for the next 50 years and beyond, is the company cannot be sold,” he said. “It has to retain 50 percent or more control of any entity it’s partnered with. We can merge, can acquire, but Alper Services has to control at least 50 percent. Actually, technically 50.1 percent.”

He said very often an acquisition aims to achieve an economy of scale by letting go of employees with the hope of generating more revenue with less overhead. It may seem to make economic sense to some but in Alper’s view, “that atmosphere creates exactly what you don’t want to create in your business, whether for your people or for your clients, which is uncertainty. …

“Our belief is you cannot deliver the best in quality service, this holistic treatment, with fewer people. … We like being able to say to our recruits, and our current employees, we are going to be here. We’re not going to be sold,” Macknin said.

Topics China