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January 2006
Taking Risks Insures Success
By Ellison Clary

Pivotal moments abound for the co-owners of commercial insurance agency Carpenter,  Cammack & Associates, Inc., Chris Cammack and Tom Carpenter. But perhaps the most vivid occurred when the two of them happened to be visiting with Carpenter’s parents at a beach house. Carpenter and Cammack were licking their wounds from a failed attempt to buy a commercial insurance agency. That’s when Carpenter’s father jolted them.

“If you guys don’t start an agency now,” Tom Carpenter Sr. admonished, “you’ll never do it.” For good measure, he added, “And you’ll always regret it.”

The elder Carpenter was speaking from long experience. For years, he managed a regional branch office for Aetna Casualty & Surety Co. in Charlotte that was one of the nation’s largest and among the most admired.

Upon returning to the office, the younger Carpenter and Cammack remember staring at each other and saying out loud, “Let’s give it a shot.” That was 1992.

Now Carpenter Cammack & Associates (CC&A) is a four-office, full-service commercial insurance agency specializing in insurance and risk management for medium-sized and large companies, mostly in North Carolina. Headquarters is in 6,000 square feet in Charlotte’s SouthPark area.

Cammack is president and Carpenter is chief operating officer. The pair owns the vast majority of the privately held company.

Carpenter, now 49, and Cammack, now 56, already were seasoned veterans in the commercial insurance industry. Cammack had worked for a time for Carpenter’s dad, after earning an economics degree at N.C. State University where he was also a two-time All American baseball player and ACC player of the year. Carpenter, who received his business degree from The University of North Carolina, never worked for his father, but grew up around the business and had been with the Aetna in Denver, and with an agency in Charlotte for seven years.

Still, forming Carpenter, Cammack from scratch was no lark.

“Nobody does what we were trying to do,” Cammack says. As in banking, the routine way to crack the commercial insurance industry is to buy into it. “We had people telling us, ‘You guys are crazy,’” Cammack adds.

Carpenter resigned from Cameron M. Harris & Co. in Charlotte and Cammack walked away from a commercial agency in his hometown of Fayetteville. Both were saddled with non-compete clauses, so they didn’t bring any business with them.

But they’d known each other for years and found comfort in remembering another defining moment. It was nearly a year earlier when, after dinner at Belle Acres, the venerable Charlotte membership spot, they’d decided they wanted their own business while watching the start of the Gulf War on television.

“We really thought we could build a better mousetrap,” says Cammack. For eight months they tried to buy an agency in Pinehurst, N.C., and thought they had it. But at the 11th hour, the owner sold to BB&T instead.

That led to the kitchen session at the beach and the subsequent decision to move forward.

Armed with the knowledge that they liked working with each other, Carpenter and Cammack hired an administrative assistant and opened an office in Matthews. Cammack also operated out of his Fayetteville home.


Cold Calls Yield Benefits

They bought two Toyota Camry company cars and met for breakfast once a week. After coffee, they’d pile in one of the compacts and make cold calls.

“Honestly, we’d look for buildings with a lot of cars in the parking lot and we’d walk in,” Cammack says, then chuckles. “That’s not the way to do target marketing. It’s more like desperation marketing.”

In another defining moment, they paid a cold call on the chief executive of a manufacturing company near Albemarle. He was using a national broker for commercial insurance.

“He just liked our story and he liked us,” Carpenter says. “He said, ‘I’m going to let you bid. One thing I need is two or three customer references.’ We said, ‘We don’t have any customers yet, but we’d love for you to be one of our first.’ And he was.”

It took four months for Carpenter and Cammack to generate their first dollar in revenue. “But we planned for that,” Carpenter says. “Once you get going, you have a high retention rate if you do a good job.”

They particularly liked talking to owners of middle-sized companies, those with 50 to 500 employees.

“A business owner respects what we’ve done,” Carpenter says. “We had better luck selling to chief executives than to chief financial officers. A CFO works for somebody else. It’s a lot easier for him to say, ‘Here’s the biggest broker, here’s their laundry list of clients, let’s go with them despite what these new guys bring to the table.’”

With dogged determination, a personal touch and a penchant for innovation, Carpenter and Cammack gradually built the business.

“We started in 1992 and our revenue was zero,” Carpenter says. “Our revenue in 1993 was $99,000. The way we funded the business was by not taking salaries. But every time we made a nickel, we’d hire somebody. We’ve always taken every opportunity to bring on high quality people.”

And that strategy has paid off. Revenue for 2005 will exceed $5 million, Carpenter says. The firm has 34 employees, including 18 in its Charlotte headquarters, seven in Fayetteville, seven in Raleigh and two in Greensboro. Of the company’s 500 clients, 95 percent are in North Carolina, although the agency is licensed in 42 states.

Although the typical CC&A customer employs between 50 and 200, Carpenter says the company currently serves three of the 50 largest privately held Tar Heel businesses.

Often, CC&A competes against the insurance arms of banks BB&T and Wachovia, as well as national brokers.

Although consolidation is rife in the commercial insurance business, Carpenter and Cammack still have never bought another agency, and don’t foresee that happening. In North Carolina, they estimate there are 250 to 500 independent commercial agencies, but they count only about a dozen or so that they consider to be peers.


Pride in Innovation

The partners take pride in what they call their client management imaging, a software system that keeps their agency virtually paperless. “We’ve tried to be on the leading edge of agency technology,” Carpenter says.

A CC&A brochure lists dozens of commercial insurance products, but the co-owners say they focus on commercial insurance and workers compensation, property casualty services, general liability and risk management.

“We’ve got a guy, Scott Parrish, who joined us in 1999 with a background in workers compensation loss control from Key Risk Insurance Company,” Carpenter says. “Scott designs a safety program specifically for your operation and we keep him busy all over the state. We add his services as part of our package.” This approach is a huge point of differentiation for the agency.

Carpenter and Cammack believe their real point of sale is with the insurance company, or carrier. Once they negotiate the programs with the carriers that they want to offer, the partners have seen that these packages sell themselves to clients and prospects. CC&A simply outlines the benefits. To get that far, CC&A does what it takes to learn the prospect’s business and operating mode. CC&A can negotiate a better price on products, Cammack says, if it can give a carrier an accurate picture of the prospective client and the business to be served.

Jamie McLawhorn, president of Marsh Associates in Charlotte, says he respects the integrity of CC&A as well as its knowledge of the commercial insurance business. He recalls a situation when CC&A helped Marsh put together the facts about a specific claim. “They stood by us,” McLawhorn says. “I highly recommend them.”

Evidence that the CC&A approach is working came earlier this year, when the company was named by regional property and casualty insurance group Amerisure to its Partners for Success program. The program recognizes profitable results, earned premium volume and mutually beneficial performance. Cammack says that’s a big deal for CC&A as well as Amerisure.

CC&A also is a VIP agency with Hartford and a Keystone Agency for Penn National. It is represented on agents advisory councils with AIG, Berkley, Hartford, and Penn National. CC&A is also one of the core Carolinas agencies for major insurance corporations such as St. Paul Travelers and Chubb.

Besides quality products, Cammack says, the best way to get business is through customer referrals. “What you’re trying to win from a client is their trust and confidence,” he explains.


Character of Employees Is Critical

That puts a premium on the character of persons CC&A hires. “We look for somebody who’s competitive,” says Cammack. “You’ve got to be analytical and have empathy – understand the client’s situation.”

They’ve done well at finding the right people, says Howard Pitt, 74, a consultant with CC&A who has worked in commercial insurance in Charlotte since 1956.

“Tom and Chris are outstanding leaders and caring people,” Pitt says. “This office in Charlotte is as professional and enjoys as much esprit de corps as any company I’ve known. They don’t put any time clock on you. They tell you the goals they expect you to meet and let you do it in a way you know best.”

The company has had a penchant for adding the right person at the right time, Cammack says. He believes continuing with that approach will pay dividends.

Asked to envision CC&A in five years, Carpenter says the firm will be bigger and better. The 12-person sales staff – the “producers” – probably will increase by 50 percent, he says, and they will concentrate more on specific industries. CC&A will likely develop a couple of new niche specialties along the way, he adds. “I’d like to say we’d double our annual revenue in five years,” Carpenter smiles.

CC&A is active in business associations such as Associated Builders and Contractors, the North Carolina Association of Staffing Professionals, and other industry specific groups.

Meanwhile, the partners admit they enjoy seeing the company make reality out of their vision from more than a decade ago.

“Our reward now,” Cammack says, “is watching our employees start to blossom. We’re in our 14th year, and there has been a lot of turmoil in our industry with mergers and acquisitions. This has been a good place to be. We’ve built a good, stable, growing and positive environment for people.”


Ellison Clary is a Charlotte-based freelance writer.
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