Atlas Insurance News
This Atlas Has Not Shrugged
09/03/2008 - Bridget McCrea
Sarasota ’s Atlas Insurance has weathered hurricanes,9/11, roiling rates, angry customers, whimsical insurers and a consolidating industry. After five decades, the family is still speaking.
ODD AS IT MAY SEEM, being in the insurance business can be as suspenseful as a John MacDonald thriller. Death-defying action, bite of fate, twists of fortune all can be as fodder for actuarials as for mystery novels. Certainly, the current market is not for the faint of heart. Agencies are getting hit from customers up in arms over increases and coverage reductions, and they are being squeezed by insurance providers pummeled by a volatile stock market, toxic mold claims, hurricane threats and world events like 9/11.
The Browns of Sarasota’s Atlas Insurance agency know well the comparison with a MacDonald mystery, for the late author of the Travis McGee novels was a longtime family friend and client. The family knew that anything told MacDonald was “fair game” for his stories, says Robert W. Brown, a third-generation member of the family firm. In one of his novels, for example, his sister Beth appears as a green-eyed blonde vet student, and MacDonald’s book Condominium was dedicated to Mary Lawrence Brown, his grandmother.
Condominium was particularly relevant, says Brown, since the book was based on a fictitious place known as “Sand Key” where condos were built on skimpy budgets in unsafe beach zones, and ended up washed out by a storm. “John was writing about Siesta Key, where he lived at the time,” says Brown, who recalls that the author relocated to the northern, more stable part of the island, closer to the bridge.
So it is with insurance: You manage the risks. “It’s the things you can’t control in this business that tend to be the most challenging,” says Brown, managing partner and vice president of the agency. “We’re bound to the insurance companies on one side, so if they change their whim about which clients they want to write policies for, we largely have to go along with it.”
In business for 51 years, Atlas has weathered many of the industry’s ups and downs. Persistence and flexibility have paid off handsomely for the firm, which has posted 15- to 20-percent annual revenue growth, maintained a stable base of commercial and consumer customers, and expanded its workforce over the last five decades.
Still, Brown says being at the beck and call of a changing industry while trying to keep clients satisfied is like walking a tightrope. “When insurers change their focus they typically don’t consult with us first, so it takes time for us to realign and change our own focus,” says Brown. “We’re tied to this market that we serve, so we don’t have the luxury of being able to just bail out, like the insurance providers can.”
To deal with the industry’s uncertain nature, Brown says the firm works with reputable insurers like Cincinnati Insurance Co., FCCI Insurance Group of Sarasota and The Zenith Insurance Co. in Sarasota, all of which are committed to the Florida market.
By cultivating these relationships, Brown says, Atlas has managed to keep customers fully covered and satisfied. “There’s nothing worse than having to transition a client to a new company year after year, but the hard fact is that we can’t change how the reinsurers look at Florida,” says Brown. “No one likes being the tail getting wagged.”
When Atlas Insurance opened its doors in 1953, I Love Lucy was the most popular TV program, a gallon of gas cost 22 cents and Sarasota was a booming Florida town. Frequent visitors to the area, Lee Brown (Robert W.’s grandfather) and his wife Mary Lawrence retired to the area after selling a business in Louisville, KY. Seeing an opportunity in the insurance industry, he and partner John S. McCulley opened Atlas Mortgage and Insurance Co. The pair wrote just a few mortgages before realizing the real opportunity wason the insurance side of the business.
“The demand for insurance was tremendous,” says Robert P. Brown, company president and Robert W.’s father. Today, Atlas offers most lines of insurance, but specializes in personal (auto, boat and home) and commercial insurance. With 30 employees, the company brought in $20 million in revenues last year and expects to grow by another 15 to 20 percent in 2004. The company also offers life and health insurance, estate planning, employee benefits and retirement planning through Atlas Financial Services.
In the 1990s, Atlas boosted its client base and revenues by grabbing a number of business opportunities. It started in 1995 when the firm merged with what Robert W. calls “a friendly competitor.” Through the marriage, Atlas Insurance not only gained new business, but also found a gem of a partner in Darren B. Howard, who serves as a partner and vice president.
Shortly after integrating Howard into the family business, Atlas hired Tom Kochis as an outside salesperson. This year, Brown says Kochis will move into a partnership position, based on the production, values and ethics he’s brought to the company. “We’ve learned that when you find good people, you share the business with them by giving them an ownership stake that truly ties them to the business,” says Brown, “instead of just having them out there working for a paycheck.”
Doing so has been a big pill to swallow for some family members, particularly Lee Brown, who has handed the reins of his company over to the second and third generations. “I don’t know that my grandfather is over that yet,” says Brown, referring to the merger with Howard’s firm. Still, Brown says looking outside the family circle for key employees has been crucial to Atlas’ growth over the last decade.
Growing Up
Brown has been working for his family’s business since 1986, when the company had just five employees. He started typing up insurance policies and inspecting properties, and assumed his current position in 1998. A Sarasota native, Brown remembers the area being dependent on farming and fishing. An economic shift occurred when tourism took hold, he says.
As the Sarasota region evolved, so too did Atlas Insurance. Whereas the firm now has a client base composed of 56 percent commercial customers and 44 percent individuals, the scales once were reversed. “The personal side is still a significant piece of our business,” says Brown, adding that the company prefers to work in a “package” fashion with those individual customers, rather than act as a low-cost leader on, say, auto or homeowners insurance. “Working that way represents a higher transaction cost and smaller numbers, so we have to be careful.”
That cautiousness combined with solid industry knowledge and a five-decade reputation has kept Atlas growing for as far back as Ray Suplee can remember. As chairman of accounting firm Suplee and Shea CPAs in Sarasota, Suplee says his firm has indirectly handled the insurance agency’s finances since its inception, when Lee Brown named John Shea CPA of record for the firm (Shea later merged his practice with Suplee’s).
From a financial standpoint, Suplee (who has personally handled Atlas’ finances for 30 years) says Lee Brown’s fiscal responsibility and work ethic have been handed down from generation to generation. “They’ve always added to the pile, so the net worth of the company continues to go up year over year, and has never diminished,” says Suplee. “That’s highly unusual in today’s business climate.”
The fact that Lee Brown sat on the board of directors of Sarasota Bank and Trust, Robert P. Brown was a founding director and stockholder of West Coast Bank and Robert W. Brown is current director of Landmark Bank is proof of Atlas Insurance’s financial integrity and track record, according to Suplee. The Brown family has never distributed “all of the profits,” he adds, and instead has plowed the money into technology and operational investments.
“They’ve consistently reinvested in the company and have always carried large cash balances in the bank,” says Suplee. “They save for rainy days, or for the year that they don’t get their reserve from their insurers.”
With pressure coming from all sides, Brown says Atlas plans to stick to its founding principles while seeking out any new opportunities. On the commercial side, that means signing up more large property-value clients like beach- front property and condominium associations, which are facing limited choices and sky-high insurance prices. It could also mean cultivating a new generation of Browns to take over the reins, though Brown’s 9- and 6-year-old offspring aren’t quite ready to commit yet.
“If they want to, wonderful, but I’ll never tell them that they must take over the business,” says Brown. What Atlas Insurance is hanging onto is a philosophy that Lee Brown laid down 50 years ago: “Make no excuses and always tell the truth.”
“That was Granddad’s philosophy and it has guided Atlas Insurance through 50 years and three generations,” says Brown. Keeping that philosophy intact is important to the Browns, who – when asked their greatest accomplishments over the last 50 years in business– all say, “We all still speak.”