By Nigel Gordijk.
Josslin Insurance article for Exchange Magazine.
Scott Wagler, of Josslin Insurance, is waxing philosophical about the company’s attitude to business: “It’s part of our moral fabric. What we’ve learned from our life – and our background – is humility”.
The New Hamburg-headquartered brokerage, which is celebrating its 130th anniversary in 2010, is owned by the Wagler family. Scott, along with his father, Don, mother, Rose, and younger brother, Steve, are Josslin’s only shareholders. The two sons run the day-to-day operations.
Of course, morality and humility aren’t attributes that everyone would apply to the insurance industry, but Scott thinks it’s central to the continued success of the firm.
According to both Don and Steve, there are other factors that contribute to the fabric of the company: family, naturally, and responsibility. The Josslin definition of “family” isn’t limited to relatives, but also employees, clients, suppliers (insurance policy providers) and the community at large.
Scott says: “What we think makes us unique is, given the fact we’re a family business, we really don’t look at the people we work with as people we work with. Families are all about help and support, and that’s what we do.”
He adds, “We’re connected as individuals, and we’re connected to the community that we live in. That’s why we have the locations that we do: we want to stay connected to the communities that we live in.”
That sense of connection came to the fore in late December, 2008, when New Hamburg suffered devastating floods that caused severe damage to many residents’ homes. Josslin Insurance was instrumental in galvanising support for the local flood relief fund, which raised over $60,000 in donations. The money was distributed amongst flood victims to help pay for essential items that had been destroyed, such as furnaces and boilers. Steve Wagler sat on the fund’s committee, alongside a representative from a local competitor, and also helped to raise donations from the brokerage’s suppliers. Their combined efforts alone contributed $20,000.
Brother Steve adds, “We do good works with our partners, charitable works. More often than not, they’re happy and willing to help out.”
Don explains a flood isn’t something that is easily insurable because they mostly happen in flood plains, but the losses are real. “It’s not something we could cover with insurance, but we felt a responsibility to the community.”
Charity may begin at home, but, in the minds of Josslin’s principals, it continues far beyond our borders. In September the company wrote a substantial cheque for the Mennonite Central Committee’s flood relief efforts in Pakistan . Earlier this year it also donated financial assistance to Haiti , following the deadly earthquake in January. In that case – and many others – Josslin matched the donations raised by its employees.
According to Scott, on a local level the company can offer direct financial help; for a global reach, Josslin works with MEDA (Mennonite Economic Development Associates), a faith-based organization of compassionate businessmen and women who invest in people living in poverty around the world.
The School of Experience
Don Wagler is a self-made man. Raised in new Hamburg , he reluctantly dropped out of high school after one day in Grade11 at Waterloo-Oxford to work in his father’s agriculture vehicle and implement business. “When I arrived home… I was told that if I wanted to go to school, he would sell everything. After five years, he realized that there was only so far he could go. He tried his hand at boat-building, but that didn’t take, either. So, when he was offered a job by The Prudential Insurance Company of America , he accepted. Don made progress at the company during his 10-year career, but then came a turning point. To go further he would have to move around the country, which didn’t appeal to him.
Wanting to remain in New Hamburg, Don began negotiations with J.B. Josslin to buy his local insurance company. “J.B. Josslin was a respected individual in the General Insurance industry, having been a former executive of the Shaw & Begg group and having grown up with the CEOs of his time.”
Josslin Insurance Brokers was founded in 1880 in New Hamburg, Ontario by Louis Peine, who operated the business until his death. It had several owners until 1953, when John (J.B.) Josslin acquired a partnership interest, becoming sole owner a year later.
J.B. Josslin was a student of the insurance business and is regarded by some as having been the best in the industry because he was so well respected and knowledgeable. He was a colourful character who had a reputation as a dapper dresser and bon vivant. According to Don, he liked to “socialize” after a game of golf, often closing the New Hamburg Legion with “one more final-final.” However, if you needed J.B.’s help, he gave you his undivided attention.
“He was a tough nut. After lengthy negotiations, I presented our final offer - take it or leave it. And he took it.”
The deal was finally completed in late ’74, and Don took over the company on January 1, 1975 . It has operated as a family business ever since. Don’s wife, Rose, joined the business as a licensed insurance broker in 1977.
The Scott and Steve both joined Josslin in 1991, at separate times. Steve joined straight from university, while Scott became part of the company after gaining experience elsewhere in the industry. Both of them earned their current positions by working their around and up the company so that they could determine their individual strengths. “No-one was parachuted into their positions,” proclaims Don, proudly.
As with any family, there can sometimes be tensions. Don describes the mixture of family and business as “living life in a goldfish bowl”, but Scott doesn’t see that as a bad thing. “What can be difficult – not just for us – is the dynamic of family. We’re a close family. We work together and we often vacation together.” Steve jokingly interjects that at family Thanksgiving and Christmas dinners there are no buns flying. All of the children and grandchildren love each other and enjoy spending time together. That family bond is unique because, continues Scott, “it can tear businesses apart.”
When the company has changed hands over the years, the name has changed, too. So why didn’t Josslin Insurance become eponymous? The aforementioned humility is one reason. When Don bought the company in 1975, he felt that “In my opinion, I had an okay reputation. (J.B. Josslin) had an excellent reputation and was known in the industry. What was to be gained?” Also, J.B. stayed with the bought-out company for another five years, so changing its name didn’t feel right.
After a company changes proprietors, some clients can feel connected to the previous owner, but not the new one. So there’s a more pragmatic reason for keeping the old name, too. When bought Josslin Insurance from J.B., it was a 100% cash deal. “We couldn’t afford to lose any business,” says Don. When people think of Josslin Insurance – both then and now – they hold the brokerage in high regard, recognizing that the firm will be there when people need them. “That’s a reputation (J.B.) earned.”
Besides, adds Scott, “it’s the people that are behind (Josslin Insurance) that actually matters.”
Retaining the name of the old company is also a way for the Waglers to separate family and business. Steve observes: “You can make decisions that are business decisions, and not always family decisions.”
Don says he’s tried to make Josslin Insurance a place where people look forward to coming to work, rather than resenting it. “We treat employees like family members. We’re not strong on titles or positions.”
The Personal Touch
“We don’t use voicemail,” says Don. “I resent being on the phone for 20 minutes, being told how important I am when there’s nobody to talk to. And when I do, I find they’ve connected me to the wrong person.”
The main reason why there’s no voicemail at Josslin is because when someone calls the office, they need help right away, an issue they need to resolve. Josslin has two receptionists in New Hamburg who answer all the calls and then dispatch them appropriately.
New Hamburg is Josslin’s communication hub. When someone phones the company, the New Hamburg office routes their call via a live answering service. “Customers speak to a real person, 24/7,” says Don, who once received a forwarded call while sitting on a boat in the middle of the Atlantic . “No voice-jail here!” jokes Steve.
Scott adds: “The statement that ‘We’re focussed on customer service’, and then treat a (customer) that way, is oxymoronic.”
The cost of doing business in a multi-location environment is not without drawbacks. With offices in New Hamburg, Elmira , Tavistock, Wellesley and Kitchener , “our overhead is huge,” says Steve, “but there’s a good reason for it.”
Scott elaborates: “We’re connected as individuals, and we’re connected to the communities we live in. That’s why we have the locations that we do. We want to stay connected to the communities that support us.”
When looking for new hires, Josslin always searches for talent that is local to where the employee will be working. This allows the company to maintain its connection to the community, which Scott refers to as following its mission of “foundation of protection.”
Why continue to expand? Don resorts to an analogy: “Business is like riding a bicycle: If you stand still, you’ll fall over. Keep moving and keep your balance.” In other words, says Scott, “As an organization and as individuals, we’re not complacent. We don’t sit still well. We either move forward, or we die.”
However, says Steve, “Our goal is not to be big; it’s to be the best”. Acquisitions are a calculated way of enabling Josslin to build its expertise in niche areas. For example, Elmira is known for farming and agri-business, while the Kitchener office has plenty of commercial experience. “We simply can’t be experts at everything,” points out Scott, “so we acquired the necessary local specialists.”
The main reason for this “knowledge acquisition” approach to growth is also pragmatic. By increasing the company’s areas of expertise, neither customers nor insurance partners need to go to Toronto for the services they require. Josslin’s expansion methods allow it to offer products that support local industries.
Josslin Insurance is likely to continue growing in an organic way. Steve observes, “It’s not growth at all costs; it’s controlled growth, it’s understood growth, it’s strategic.”
All this expansion has not gone unnoticed, making Josslin attractive to others in the industry. At least once a week the company receives an offer to buy it. “There’s certainly no shortage of potential purchasers,” says Don, “but we’re not for sale. We don’t even entertain the conversation.”
If you want to get the Waglers animated, ask them what they think about banks and supermarkets selling insurance. “I don’t mind competition and we don’t care who they are, as long as they’re qualified and we have a level playing field,” Don states firmly, with a steely glare. He complains that banks have so much money that it can skew the market by limiting choice.
Many of the financial products that supermarkets and department stores in Canada sell are “white label” services provided by banks, a technique copied from the United Kingdom . Don points out that several have failed, leaving customers high and dry. This is because, Steve elaborates, the supermarkets’ financial products don’t take a long-term view, adding, “ Canada ’s unique in so many ways. You can’t simply transplant ideas from other countries and expect them to work here.”
Built-In Succession Plan
So, what about Josslin’s future? Does the company have a succession plan? Don says: “Scott and Steve are the succession plan, along with the rest of the team.” That team includes people who have been with the company for over 20 years.
While a more defined plan is not yet in place, the topic is clearly on the minds of those who will be most affected. “It’s a very big issue right now,” says Steve. “We’ve been asked to present (our views) to a panel about family successions. We see a lot of companies that have sold out to insurance companies” because they didn’t plan ahead. He adds: “It’s better to start earlier than later because many companies find there isn’t a plan in place, so they end up selling out.”
That’s not a route Don wants to follow, relishing Josslin’s independence. When brokerages are in a partnership with an insurance company, there are often strings attached. If they’re approached by a potential client, “They’ll say, ‘Okay, you have to give us first crack at the business.’”
It’s all about integrity in the marketplace, says Steve. “We want to make sure there are many independent competitors out there because it’s better for the customer.”
He explains that there are two ways brokerages in Ontario have grown. One is the way Don pursued when he bought an existing operation. He had a background in life insurance, which enabled him to hone his skills as a good manager of people, teaching them to look after their clients. The second way, which was prevalent in the 1970s, involved salesmen hanging out their shingle and growing their businesses from the ground up. They were good at sales, but poor at managing people. “They would reach a certain size and then implode because they didn’t have any management skills,” says Steve. “We’re good at getting the best out of our people so they can give their best to our customers.”