ARMI - The beginning

Associated Risk Managers, "ARM" as it became known, began as the brainchild of Wayne Hoffman in mid-1970. Wayne had left Marsh & McLennan in Minneapolis and formed his agency in Marion, Indiana. During the Independent Insurance Agents of Indiana state convention that year, Wayne invited principals from 10 of the state's largest agencies to a special meeting. As Wayne shared with the group some of the problems that he was experiencing in his agency he discovered, as he had suspected, that these problems were common to all the other agents also.

Wayne told the original group there were many things that he believed could be accomplished collectively (due to the combined volume of the group), but he truly had no idea where it might lead. Things that individually, none could accomplish. In those days, it was quite common to inter-broker between agencies for the sake of capacity. This was true on large fire lines and also bonds.

When Hoffman left Marsh & McLennan and formed his own agency, he had taken with him from MarshMac one account, Huber, Hunt & Nichols. This construction firm built Methodist Hospital in Indianapolis, Riverfront Stadium in Cincinnati, Three Rivers Stadium in Pittsburgh, and the Superdome in New Orleans. Hoffman needed $160 million in bonds on the Superdome and had run out of capacity. This helped give birth to the idea of ARM. (While some help did go into filling out the Superdome bond line, among the original member agencies, it never became a true ARM function.)

The original incorporators of ARM were (to the best of my memory) these eight Indiana agencies, two of those originally invited having declined to participate.

Johnson-Hoffman Agency,

Marion

Citizens Insurance, Inc.,

Evansville

John Kiley & Sons, Inc.,

Kokomo

Robbins Matherly Dils, Inc.,

Richmond

Kirkpatrick-Searcy, Inc.,

Muncie

Mayerstein-Burnell, Inc.,

Lafayette

Yaste, Zent & Rye, Inc.,

Ft. Wayne

Associated Insurance,

South Bend

Almost immediately, Mike Bill's agency (M-J United Insurance, Indianapolis) was added, as was First Bank Agency in Elkhart/Mishawaha/ Goshen.

It was at the second or third meeting after the original formation that the group was incorporated, with Wayne Hoffman as its first president. Various committees were assigned, not the least of which was a search committee to find an executive director.

I was interviewed and hired almost on the spot on January 1, 1971. Initially, we had one small room, with a desk, file cabinet and telephone, in the offices of the Indianapolis member agency. Almost immediately, we added member agencies in Michigan City, Terre Haute, and Bedford, bringing the membership to 15.

In February 1971, Paul Porter of Kirkpatrick-Searcy, Inc. agreed to sell to ARM of Indiana the franchise for the entire state for American Insurance Marketing Corporation (AIM). Our entire ARM Board went to St. Louis and met the AIM officers, the result of which was approval being granted for the sale. Immediately, we saw ourselves as a natural for statewide marketing for programs. AIM gave us approximately 10 national programs for Indiana.

Our first program effort on our own was the Dairy Queen account throughout Indiana. It was a great success, as our premium volume soared to over $150,000--big numbers in those days.

My instructions upon taking the job were vague, to say the least. No one had ever done what I was doing, so no one could give me any idea what to do. Initially, the carriers were quite concerned that this would somehow border on "restraint of trade." After all, they had just come through an all-out war to direct bill personal lines! And these were the largest Indiana agencies.

The local companies, especially, and even some of the nationals, were well aware of how many ARM member agencies they were in and the total volume that represented. Initially, American States, Meridian, and USF&G were most skeptical. Aetna also paid me a visit to "understand" ARM.

We picked up overwrite contracts the very first year on substandard auto, E&S lines, commercial building appraisals, and collectively began our own premium finance company.

TransAmerica/Wolverine (then out of Michigan) came to us to establish our network as their agency plant in Indiana, since they had no presence at the time. Specialty markets for various niches came to us as a natural outlet for statewide distribution. Actually, by late 1971 things were rolling and we moved into our own new offices on the north side of Indianapolis in January 1972.

The National Underwriter heard about us and printed a story, which helped the initial efforts of ARM International.

Michigan had a group which had come together under another name, but liked what they saw in Indiana. We had a couple of combined meetings. At the second one, we invited guests from Illinois and Ohio. This took place at the Ft. Wayne Marriott--a new hotel then, and it had a Win Schuler's Restaurant in it. In those days you couldn't do better than that. That meeting was written up in the national trade publications, and we got inquiries from Vermont, Texas, Wisconsin, Tennessee, Kentucky, and one from California. I spent a great deal of time the latter half of 1972 and the early part of 1973 answering inquiries, traveling to tell about ARM of Indiana and ARM International.

When I resigned in September 1973 to join AIM in St. Louis, many ARM of Indiana principals were critical of my efforts, i.e., spending so much time on non-Indiana business, so much so that when my successor, Larry O'Brien, was hired, he was directed to downplay ARM International and concentrate solely on ARM of Indiana business. It took a while before efforts outside Indiana were given a great deal of consideration. Fortunately, by that point, however, other states were up and running, and a good idea's time had come.

After leaving ARM and joining AIM, I began working with other ARM states. I stayed at AIM until 1976, when I joined Poe in Tampa, Florida. There, too, I worked with ARM groups in California, New York, Michigan, Wisconsin, Oregon and Washington, Kentucky and Ohio. Then, upon coming to Virginia in 1985 and acquiring my own agency, I immediately became a member agency of ARM of Virginia. Shortly thereafter, I was elected to the ARM International Board and served six years. It was nice to be back in the family.

The author

Richard L. Simmons is executive director of ARM of Virginia and president of the Suter, Haycraft & Simmons Agency in Falls Church, Virginia.

Copyright Rough Notes Co., Inc. Apr 1995
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