Neil Friedman, CEO of Friedman Associates. Photo by Paul Chin, Jr.
By T.J. Prieur
When Neil Friedman decided to open his own insurance business, he wasn’t quite sure how he came to that decision. At the time, he was brokering a lot of business at Lincoln National Life. Starting a new business meant risks and new pressures, but he jumped in feet-first and has never looked back.
One thing Friedman is sure of, however, is being able to provide everything a small business owner will need for his or her business, all under one roof.
Friedman Associates opened in 1976 and now has 18 employees.
To shed light on what makes an insurance business successful, Neil Friedman shares a few things about his company.
On Employee Retention
“The processes in the office have all been developed by staff,” Friedman explains. “One thing I do well is give people responsibility and let them run with it. If you dictate to people, they may object to what you’re doing. If they have input, they will buy into it.”
Even his family members have been team players with the business.
His son, Ross, was brought in two years ago. With his undergrad focusing in accounting and a Master’s in international trade policies, his son’s background would help further the need to take the company to the next level. Ross’ controller skills brought in more corporate structure to the business.
Friedman’s wife Abby also played a major role in the success of the business. While she got her start with the business as the bookkeeper, she quickly became licensed in employee benefits and property/casualty.
“We learned very quickly our own areas of responsibility and didn’t cross it,” Friedman explains. “She’s all about details, and I’m a dreamer. It worked out well.”
One way Friedman keeps his expectations of his staff in check is realizing that everyone has different talents, and he capitalizes on the strongest talents of each individual.
“I realize that I am a great salesman, but I am not a great manager,” Friedman says. “I realize that you can’t keep control of everything in it, but if you let people have control and ownership, they will do a better job.”
And this isn’t just a great idea, but a philosophy Friedman lives by.
Each of the salespeople in his office are on full salary, and everyone refers to someone else if that other person is more knowledgeable in that particular area.
His reasoning is simple: A person can’t live off commission if he or she knows nothing about what they are selling.
“You can’t bring a young salesperson in on commission and expect them to survive,” Friedman states. “We know we have to invest in people and their careers, so we don’t bring in 10 people and throw them against the wall to see who survives.”
For Friedman, the payoff is worth it. Some of his sales staff have been with the company for 15 years, and the youngest salespeople have been there for two years.
On Determining Success
Because this is the softest insurance market in history, strategies must be in place to keep the business afloat. Pricing is as low as it’s been in a while, and Friedman is seeing products sold today at 50-60 percent lower than the unit cost basis three years ago.
“Less people are buying insurance, so this is a challenging time,” Friedman says. “With margin compression, property/casualty commissions are down. Percent premium basis is down.”
How does Friedman deal with the market? He makes up for revenue loss with new clients and continuously writes new business.
“We take things one step at a time and think five, 10 and 20 years out, so there isn’t one thing we can look at and say ‘Yeah, we made it,’” Friedman says.
After the company hit $1 million in commissions, they quickly focused on the next goal.
Friedman Associates now produces just under $2 million in commission a year, and is still growing.
On Customer Satisfaction
“Service is key,” Friedman says. “In any competitive market, price is important, but you have to provide more than that.”
The team at Friedman Associates is not comprised of “high pressure” people, according to Friedman. The sales team is trained to walk away from an account that either asks them to do something they don’t want to do, or something that is incorrect.
What the team does do is go the extra mile in providing everything a small business will need to be properly insured.
Instead of dialing an 800-number, clients call direct lines to speak with someone at Friedman Associates.
“You are never on your own,” Friedman says. “We really believe you have to bring more value than a price or insurance product.”
Friedman and his team demonstrate this by offering programs to help educate about lead paint, as well as providing OSHA training, with literature and information in both English and Spanish.
“The insurance business is a futures business — it’s an annuity contract, basically. You must reinvest in it,” Friedman explains.
By being totally honest with everyone from clients to underwriters, Neil Friedman has demonstrated just how successful this strategy can be.
“Knowledge brings confidence, confidence brings success,” Friedman explains. “People want to deal with people they have confidence in.”
