In the constantly changing health insurance business, the only way to stay ahead of the competition is to reinvest in your company, your employees and your technology. Thats what Sparks, Md.-based Kelly & Associates Insurance Group has been doing, including moving most of its nearly 500 staff into a new corporate headquarters in June. For CEO Frank Kelly III believes firms need to reinvest and it is part of the reason why his company which operates direct sales, administration services, marketing, and payroll spends up to $10 million a year on technology. What can smaller firms learn from Kelly and why is the continual reinvestment so important? Kelly, whose firm started in his parents basement and last month moved into a 102,000 sq. ft. headquarters building, shares what he has learned.
Why do you reinvest in your firm?
In 2016, we will celebrate 40 years in business and we have had to continually reinvent ourselves. The key for us has been investing and reinvesting in great people and cutting-edge technology. My parents started the business in the basement of our home. At the time, the primary health insurer, CareFirst or BlueCross BlueShield of Maryland, didnt pay agent or broker commissions. They said to my parents, If you get over 100 lives in one pool, we will look at is as one large group, but you have to go collect all the applications and all the premiums. Since 1976, we have been installing, enrolling, billing and collecting premiums even as a broker.
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Today, we have very sophisticated technology; we spent more than $100 million building it out. Our annual tech spend is between $8 million and $10 million a year so the way weve reinvented ourselves is to continue to invest in technology that allows us to bring value to our clients.
Why are you investing proactively?
We just moved into our seventh headquarters building. Our company grew from a basement office to nearly 500 employees. We feel we need to grow, we need to innovate or we will be extinct. We continue to invest in technology, people, and facilities to try to bring a greater value proposition and deliver more value to our clients.
Should other brokerages take these steps? How can they?
Brokers need to be proactively looking for integrated HR, payroll, ben admin solution. With the world changing, if you are not providing an integrated solution or solution that creates efficiencies with technology, I think you will get left behind.
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How did your staff respond to the changes?
About 450 moved into our new corporate headquarters. Our people have been great but change is difficult for everyone. As an industry weve all faced tremendous change with the implementation of the Affordable Care Act the last couple of years. At Kelly, during the last year weve been dealing with preparation for this move. We bought the old FILA headquarters building, then fixed it and renovated it. We took an 85,000 square foot building and turned into 102,000 square feet and bought additional acreage. Because of the move, it was an opportunity to clean up some branding so weve had a rebranding.
