That's why the agency adopted a proactive risk management strategy to provide a competitive edge, according to Dudley D. Wooley, president and chief operating officer.

“We provide solutions,” added Chief Financial Officer Vivian Farris. “We want to be a business partner more than an independent agent for them.”

Ross & Yerger's new slogan is “Know the Possibilities”–presenting a challenge to employees and its carrier partners to constantly look for ways to offer services beyond coverage and price.

For most of its history, Ross & Yerger was a small, family agency with three producers and two office administrators. It was not until Wirt Yerger Jr. took over the agency around 1960 that things changed.

Mr. Yerger–who at 79 is semi-retired and living in North Carolina–says that when he assumed control, he felt strongly that Ross & Yerger needed to grow to compete with the national brokerages and larger regional agencies. He said his plan involved increasing the pool of talent, and in turn, expanding the number of accounts.

As part of that building process, he felt education would be important, so he became the first agent in the state to secure both the CIC (Certified Insurance Counselors) and CPCU (Chartered Property and Casualty Underwriter) designations.

“I emphasized education,” he said. “I pushed the CPCU. I thought it was a good way to separate yourself from everyone else. It's been very successful. It's hard to put a dollar figure on that, but I think it means a whole lot.”

Education is viewed as a great differentiator, giving producers confidence that in an agency with “a lot of smart people,” they know there is someone back at the office with the expertise to answer a question or fill the client's risk management needs, noted Mr. Wooley.

“We don't have to call an expert,” he said. “We can do a lot of things ourselves.”

The next stage in the evolution of Ross & Yerger took place in 2001, when a group of managers formed an Employee Stock Ownership Plan and bought out Mr. Yerger. That was not only transformative in terms of ownership, but brought a whole new perspective to running the agency.

Eason Leake, chair and chief executive officer of Ross & Yerger, explained that the ESOP was “a big event that caused us to change to what we are today.”

Up until that time, the firm, while enjoying impressive growth, lacked a strategic plan and depended on opportunities arising. Except for one acquisition back in the 1980s, the firm relied–and continues to rely–on organic growth.

Management considered being acquired by others, said Mr. Wooley, but after meeting at least one suitor, a group of 11 executives realized that “we had more to offer them than they did to us.”

“We quickly learned that we did not want to report to a home office,” Ms. Farris remarked.

“And we were stupid enough to want to do it ourselves,” Mr. Wooley added.

Of course, buying the agency–which generated about $7 million in revenue back then–meant taking on debt, explained Mr. Leake. That debt inspired the firm to become more disciplined and initiate better planning and budgeting practices.

Once the debt was paid, Mr. Leake said the next step was to grow the firm. That brought about two strategic decisions. One was to perpetuate the agency internally, and the other was to bring in add-on services that would allow Ross & Yerger to not only attract new customers but to cross-sell products.

“We are doing more than our competition, but in an organized fashion that the client appreciates,” said Mr. Leake. “We are bringing to the table what others are not. And we continue to work at bringing in added resources to bring in more value. It remains a balancing act–how much can we spend while maintaining our profit margin?”

A major program aimed at perpetuating the agency and driving growth is the Future Partners Group–the brainchild of Greg Maloney, vice president and director of training and development.

He said he got the idea for the program around 2003, but the desire to come up with a better system for hiring people gestated over the 10 years he was with Ross & Yerger. A lot of people came and went through the years, and he felt it would be better to have some process in place that would weed out the ineffective producers, while mentoring and retaining the most promising ones.

After the ESOP, and thanks to a hard market that generated the cash to allow the new employee-owners to pay off their debt quickly, the group was faced with the question of what direction to take.

“The thought was that we wanted to remain private, but we had not discussed how to keep ourselves private for the long term,” he confessed. That challenge–and the desire to develop and retain top talent–led to the Future Partners Group.

The program hires, trains and mentors three new producers each year. The process allows the new producers to develop and find the niche that suits them. It also provides Mr. Maloney with the opportunity to “weed out the obstacles to success and minimize the probability of any obstacle that would lead to failure.”

Under the program, there are three months of internal training and then one-to-three months practice working on small accounts. After that, there is a period of field training–how much time that takes is dictated by the individual's background and grasp of the business.

These producers then go through a three-year validation program, with the aim of one day joining the firm as a partner. One of the conditions for moving into this select club is to develop a book of business of at least $300,000 in revenue.

By having new partners grow their own books, Mr. Maloney noted, the current ownership does not dilute the worth of its stock. It also permits the new partners to purchase their stock at a 15 percent discount.

In the years that the program has been in existence, four have become partners and six are on track. Only one has ever been terminated, while others have left because they discovered that their “heart was not in our business,” explained Mr. Maloney.

The program, Mr. Maloney noted, is tailored to each individual. “No producers have had the exact same training program and track to success,” he said.

The Future Partners Group has also produced a culture of friendly competition, where producers cajole one another to improve their business, while at the same time being there to help each other when the need arises.

The agency is not afraid to go outside the industry to recruit new talent. “We have seen a lot of good opportunities as people who otherwise might have gone into banking or financial services jobs now are willing to consider a job in the insurance industry,” the firm noted in its award essay.

To generate new sales, Ross & Yerger takes a team approach involving an account executive, account manager, claims representative and resource specialist aimed at promoting “a culture of reducing claims.”

Among the specialists, the resource specialist works to back up the producer and others to identify what they require to land the account–such as providing safety or other manuals a client's human resource department or risk manager may need.

The firm also provides value-added with an employment law helpline, human resources online support and other technology-based products. “In short, our clients can definitely answer the question, 'What are you getting from your insurance agent besides a policy and premium statement?'” the agency said in its essay.

Another factor emphasized by Ross & Yerger as a key reason for its success is its policy not to compete on price. Instead, it gets agent-of-record letters from 70 percent of its clients before courting insurers.

Mr. Wooley noted that in part, this was in response to the increased competition from large brokers. He said it was a paradigm shift for the firm from the bid-and-quote process, but by following that risk management-based system, it has become a better fit for the firm.

“When you go this way, you put more pressure on yourself to be a real partner and you have got to deliver,” said Mr. Wooley.

The firm is also a big believer in cross-selling, as represented by its commission volume–which consists of more than 50 percent commercial lines, and close to 35 percent group life and health.

Another resource for expert help and assistance is the Intersure Group. Its 45-member agencies in the United States, Canada and Mexico meet several times a year to share best practices, but do not compete with one another.

The firm believes in transparency, openly sharing its compensation arrangements with clients. Only about 5 percent of its clients have opted for fee arrangements, but Ms. Farris noted that there is a trend among the larger clients in that direction. Mr. Wooley noted that fees can sometimes be a tricky arrangement because if the need for services increases, so can the price–and that can lead to some touchy conversations.

In general, however, the firm added in its essay, “helping our clients maximize profitability is a service they are more than willing to pay for.”

For the future, Ross & Yerger plans to keep growing its business organically (to what Mr. Leake expects to be around $16 million in revenue by the end of 2009, up from $14.4 million last year despite a tough economy) and is not considering the merger and acquisition route.

“We're all about staying independent, and not many in our peer group can say that these days,” said Mr. Wooley.

“There is no one thing to being successful,” noted Mr. Leake. “The key is we have an incredibly good group of people who work hard, get along and make the company as good as it can be. I don't know of any magic bullet.”