There are few places better to learn the business of employee benefits than at one of the best - and biggest. Cottingham & Butler, based in Dubuque, Iowa, boasts more than 360 employees in a dozen offices scattered across the country. The firm sits squarely in the top 50 brokerages in the country - ranked 47th at last tally - serving more than 3,000 clients in 46 states. It’s no wonder. This is a firm that does it all, a literal one-stop-shop, including commercial lines, a growing benefits business and not one, but two, in-house third-party administrators. Brad Plummer took the reins of the employee benefits business a little more than a year ago at Cottingham & Butler. Seemed to work out, since the division saw a net gain of 53 percent in new business, in addition to new product launches.
Benefits Selling: How did you get into the business?
Brad Plummer: I started with the Great American Insurance Co. just after undergraduate school. They had a strong classroom-based training program, which was a great introduction to several facets of the industry.
BS: You went to Northwestern studying pre-med?
BP: Well, I actually added pre-medical studies to my economics major just before my senior year. My father was a doctor and it was something I realized I wanted to pursue. I saw what kind of an effect a good doctor can have on people and it’s always been a meaningful pursuit. I applied to medical school but really, fortunately, I was introduced to the insurance industry and discovered another way to have a positive effect on people’s lives, which I hope I’ve done over the past 20 years or so. I think I am having more fun today for it.
BS: You also got your MBA from Iowa?
BP: I went at night while working in the industry.
BS: You’ve had a lot of varied experiences and positions within the industry on both an administrative and marketing side.
BP: Yeah, I have. I’ve done underwriting and marketing with a large national carrier then became a wholesale [property and casualty] broker - that’s where I really learned the mechanics of the industry; it gave me a great fundamental training. About 11 years ago, I got to know Cottingham and Butler and soon thereafter became part of the team.
Here I started working with stop-loss insurance, our TPA, core and voluntary benefits. I’ve been involved with sales, marketing and administrative functions, which has been interesting. I’ve been lucky to try many different things, and I enjoy the variety and helping our benefit business evolve.
BS: You use the word evolve, that’s also true of Cottingham and Butler?
BP: Oh absolutely. We’ve been around since 1887 and we’ve had to evolve and innovate, not only just to survive for that long but to really thrive. Our chairman and CEO, John Butler, is really the architect of where we are today. He worked with his father in small shop in Dubuque [Iowa] in the 1950s and led us to a company that employs more than 360 across the country and has clients in 48 states.
BS: So you’ve seen phenomenal growth?
BP: Yes, especially over the past 20 years or so. We’ve grown from around $4 million in revenue to more than $60 million. We were the 47th largest brokerage in the country (in 2008) and will be even bigger this year.
BS: How’ve you been able to achieve that kind of growth?
BP: As a firm, we have very high expectations. This starts with Butler and our president, David Becker, and permeates throughout our entire organization. To meet these expectations, we first have to have a strong team of people who share that commitment to excellence. We teach our people to try to sit on the same side of the table with their clients and to try to walk in their shoes. We leverage our background and resources to dig deeper into the specifics of policies and programs to identify our clients’ needs. Most of the growth, since Dixon Cottingham founded the company, has been organic. We’ve built it internally.
For example, once we were simply a P&C shop before adding TPA services for clients in core medical. We’ve evolved into a company that helps clients with traditional major medical and other employee benefits, whereas a dozen years ago we simply worked with our proprietary TPA. Today we offer an organically developed wellness program, voluntary benefits and a complete suite of services to wrap around the medical component, despite whoever that provider might be.
Recently we partnered with a major medical carrier to provide services that wrap around their medical re-price component. They do the medical and we do a variety of things like the FSA administration, COBRA administration, biometric based HRA, health coaching, utilization review and large case management. We are truly a one stop shop for our clients.
BS: You also just completed an acquisition?
BP: It’s one of the first times we’ve grown through an acquisition. It gives us additional offices in Madison, Appleton and Wausau, Wisc., and positions us to do business with several tribal nations and also expands our employee benefits opportunities. [See sidebar.]
BS: You’ve said that part of your success was innovation. What are some of the recent innovations?
BP: If you’re not finding more ways to bring value to your client you’re failing your client. Finding or developing new products and services is a primary way for us to bring that value. Our roots are in [property and casualty] and administration both of which remain a key part of our firm, and we won’t abandon that core. But by expanding our offerings (as we discussed) into employee benefits, voluntary, etc is one way, but we’ve also created an excellent suite of products that gives us a competitive advantage. We’ve created a biometric-based wellness program - called Health Check 360 - that provides accountability.
We have our HealthCorp program, which uses our team of medical professionals to help plan participants use the health care system wisely and aids participants in times of need. HealthCorp provided more than $14 million in hard savings in 2008. We have Safety Management Services Co., which helps clients prevent injuries at work.
These are some of the innovations that I think really set us apart from our competitors.
Moving from a P&C operation to employee benefits and then into voluntary benefits is what many carriers look for in a broker.
BS: With all you do, how important are your carrier relations?
BP: They are critically important. We have a strong partnership with many carriers. Certainly with the way we evolved, we have a long history of managing and cultivating our P&C carriers, and now we’re having success working with major medical carriers and we want to continue to develop those relationships.
BS: What kind of groups make up your client base?
BP: All types. Certainly because we are based in Dubuque, Iowa, we have to spread out and travel. Sure we have many clients in Iowa, but much of our growth has been across the United States. We’ve worked with a number of industries, including transportation, manufacturing, and white-collar clients with a majority of those groups being mid-level companies. We also have a growing number of larger corporations taking advantage of what we offer.
BS: You have a large staff of licensed agents on staff, how do you handle the CE credit for a large group of agents?
BP: It really isn’t as difficult as you might think. We have resources dedicated and a centralized tracking process monitored by our licensing staff. For the last handful of years it has really been a non-issue. We promote heavily the CEBS designation and do the testing in our facility. We also hold internal symposiums, for example, where we create the curriculum, file with the state and have our certified teammates lead the course so we are able to pick up some credits here.
BS: What do you see happening with the industry in the future and how will it affect you?
BP: There is a lot of potential change. There is no doubt that the future will require adaptation. Our history gives us the experience in how to adapt. Because of this, and our broad range of services, I feel that we are uniquely capable of continuing our success.