Value Creation with Curt Vondrasek of ISU Insurance Agency Network

Welcome to the Agent Leader podcast. My name is Brent Kelly, your host. Thanks so much for joining me on this episode. Excited to have you with me and with us because I'm going to have a very special guest for you today. In fact, this is a type of guest I was telling him in our before we hit record here that he's kind of a very special guest because he's the first kind of guest that we've had like, like this in the sense that I've got someone who knew who is involved in in a number of insurance agencies across the country and I'll let him talk more about that, but has just a great knowledge of the industry and can really see from an outside perspective and a bit inside as well of what's really working and not working for insurance agencies. So I'm going to leave it at that. A little tease and then I'll do a full introduction just in a minute here. But as always, the purpose of the Agent Leader podcast is to help you, the agency leader, gain clarity, to build consistency and make a commitment to become your best version possible. Which by the way happens to be the name of our brand new book which if you're watching on video it's right behind me. If not, you can check it out at sitkins.com bvp@sitkins.com bvp for best version possible. Also want to make sure we make note of our very special sponsor, Rough Notes and Rough Notes is the publishers of the insurance industry's leading magazine and technical insurance content Roughness Magazine profile successful agencies plus keen insights from respected experts on a host of must know topics. And that includes Rough Notes Advantage plus which provides the tools to help your agency grow, providing authoritative information on complex coverage issues. So always happen to have Rough Notes as part of our Agent Leader podcast. Go to roughnotes.com to learn more. So I teased the intro here. A little bit of our special guest. Our podcast guest, I have Kurt Von Dracic of ISU Network here and Kurt, make sure I get this right. I'm gonna let you do your full intro here but EVP of Member Leadership Engagement of the ISU Network. Did I get that right?

You did. It's a very good made up title and I'm going with it. Thank you.

That's a tongue twister but it's an important title because what you do is really, really important. Just a little background, you can go deeper in this. But ISU Network, if you don't know they work with 225 agencies in 40 different states average agency, Kurt, you were telling me before, is three and a half million in revenue. So some really nice agencies. And in fact, I think the claim to fame here is that as a network, you are the second largest. Is that correct?

According to Insurance Journal. Yep. Second largest in the country.

Great. Well, again, Kurt, so glad to have you as part of the podcast. And again, I know listeners are going to gain a lot of just great value from you being on here today. So I gave you a little bit of an intro, but if you could tell the audience, Kurt, just about your background, how you got here, and a little bit what you do at ISU Network. Sure.

So I've been lucky enough to be in the insurance industry for about 25 years now. As with a lot of us didn't plan on it just kind of happened. With my first role, I took a producer role at aon. That's how I got my start. I liked it, pretty good at it. But my passion was always sales, management and executive leadership. My father was a business owner, and growing up, I watched him as kind of that entrepreneur running things. And that was always my passion. I wanted to get into that. So I've had a pretty diverse career. I've worked for a broker, I've worked for a carrier, I've worked for a consulting company, and now I work for an agency network. So it's been a great and diverse background and really happy to be able to help out our members with what I learned over the years.

Fantastic. Well, yeah, I think you got, again, because of that wide background, a lot of different ways that you've. You've seen the industry and of course, lessons learned along the way. I have to share, though. So we just recently and ISU Network was very kind and allowed the Sitkins Group and myself, Roger Sitkins, to come in and speak at one of your recent events, beautiful resort, Ritz Carlton there in Amelia Island. And I have to say this, though, one of the cool things about this. I'll just tell the story. So we were in preparation for getting ready for the event and having some conversations with your group. And what was we were told very clearly is that there was a pirate theme for this party. And in fact, this isn't just a pirate theme. Like, this is a deal, like you need to dress up like a pirate. So the last time that I saw Kurt. Well, I think I saw you maybe a little bit the last day. But the last time I really remember talking to you and seeing you, Kurt, we were both dressed in pirate costumes. So it's good to See you without the pirate costume. But hopefully sometime we can maybe, I don't know, I will have a different theme or something. So, Kurt, anything you want to say about the pirate costume before we get into really important stuff?

You know, when I came to work for isu, I heard ISU work hard, play hard, takes its conference themes very seriously. So, yes, we had a pirate theme here most recently. And, you know, I think I thought I was the best dressed until I saw your outfit, Brent. You won the prize, buddy.

Well, I borrowed it from a work associate, as I told you. You guys did. It was a great, great event and a great party and all that together, and people had a wonderful time. So, again, congratulations on that. So I want to get into. I guess we'll talk about real stuff now. That's all right. Yeah. You know, obviously with your background, one of the things that I'm always interested in hearing and all the agencies that you're connected with and part of, and this is a loaded question, but I'd love to get your thoughts on it. What do you believe is the number one challenge that independent insurance agencies are dealing with right now?

So I'm not sure how popular of an answer this is going to be, Brent. All right, my answer is complacency. And, you know, people used to always ask me, what are your favorite agencies to work with? And I would say the ones that want to grow. And it's easy to say want to grow. Sure, we all want to grow, but it's easier said than done. And, you know, one of the challenges in our industry is renewable income. We used to joke around and say, you know, the worst agency in America still has 85% of its customers come back every year. I mean, in our industry, you don't have to sign up a lot of new business to still be successful and have a great industry, because that renewable income just keeps coming and coming and coming. So it gives you this, I don't want to say false sense of security, because it is a real security, but it makes you not have to work as hard as maybe some other people in different industries. And then the second challenge is just the M and A environment. I used to ask agency owners, are you getting any calls from buyers? Now I ask them, how many calls are you getting from buyers? And they all laugh. I mean, some say monthly, some say weekly, some say daily. So I always related to, you know, what if you were, as a homeowner, your house isn't for sale, but what if somebody calls you every week and asks you if you Want to buy at some point, even if you don't want to sell, you think, well, maybe I don't have to fix that leaky faucet, or I don't have to update my basement or fix this or update that. So I don't mean complacency in a bad way. I mean that just because we're in such a great industry and there's so much M and A activity and so much renewable income, sometimes you can have a really good life just staying the course and not really having to do a whole lot different or better.

Yeah, I mean, it's interesting. And we didn't rehearse this beforehand. We just hopped on here. But just a few weeks ago, on a recent one, I mean, I have done keynote speeches that was titled the number or the Most Toxic Word in Insurance. And the word is complacency. So we're on the same page there. And I actually did a podcast around that. And it's like, you're right. I mean, we joke, too, Kurt. It's like sometimes just look up the sky and say thank you for this industry, because you can do almost nothing in some cases, and people may take offense to it, but really, you could do very little. And 85 to 90% of your clients keep paying you money. By the way, business model M and A stuff. I love how you said that, Kurt, because I never. I mean, I think about that, and I talk to our members, too. They're like, yeah, tell me how many calls I didn't get this week. Right? I mean, they're just. You get flooded with calls. But that's a great point. Like, at some point, even if you were like, we would never sell. I don't want to sell. It's not our course. At some point, you're like, am I? Maybe I. Am I supposed to do this? Like, is this what I should do? And here's the interesting thing. I'm going to add one thought to this, and we talk about this in our group all the time, is like, because it's so good, you can become complacent. But imagine if you were great. Like, imagine if you just improved a few things. And you always talk about, you know, every $100,000 in profit. I mean, it's like well over a million dollars now, depending on your moles, right? 113-15-15. Heck, no. The numbers are getting ridiculous. Right? Have been like, gosh, what if you got to there? So any additional thoughts on that, Curt, you agree?

Well, it's interesting, and I promise to the audience we did not rehearse this. But, you know, when I was thinking about what's the solution to complacency, I was thinking about mindset. And the mindset is not necessarily on revenue or ebitda, but on value creation, because. And we'll use a simple. I know you used ebitda. I think revenue is even simpler. So, you know, you hear about people getting 2, 3, 4, even 5 times revenue when they sell. So, you know, whether you're going to sell externally or internally, you got to get your money out someday. And so for every dollar that you put to the top line right now, that's two to five times value creation when you sell. So when you think about that, what a fantastic industry. What industry could be like that? So I think the component to try and solve complacency is getting the mindset of thinking about value creation and how much you're improving the value of your agency. And you know what you're going to retire on someday.

Yeah, I love that. All of a sudden, it hit me as you said that it's like a. It's like a pledge drive or whatever, where it's like this hour, we're going to 4x your money or we're going to like. And that's like, you know, it's like, oh, maybe I should put a little more in so that it's worth more. Right. And that's really what you're saying. And it is that value creation is just, it's critical. And you know, one thing that obviously we both know Roger Sitkins and the namesake of our company, and he says something all the time, and it's so true. It's like you're going to leave your business at some point anyway. Like you're. I mean, we're all, we're all going to leave our business. I mean, whether you sell or pass away from this earth at some point. So what's the value creation you're going to leave? So I love that. Kurt, let's go on. And maybe this is part of your answer before, but on the flip of it, of what's the biggest challenge? You mentioned a couple there. What do you believe are some of the greatest opportunities for agency today that you see?

I think there is an ongoing opportunity for each agency to their best ability. What I would call differentiate themselves. The challenge in our industry, it is hard to differentiate yourself when you ask people, why should I do business with you? Well, we've been in business a long time. We got great people. We got access to a lot of carriers. While those are all true, most every agency in America can say that. So if you're all saying the same thing, you're not differentiating yourself. And I was reflecting on a time once I did what we called the website game. So we had 10 agency owners in a room, and beforehand I knew they were all going to be in the room. So I went to their websites and I went to the about us section. And admittedly I copied and pasted, you know, the sections I wanted to copy and paste. But then I printed them all out and, and I handed them to each agency owner in the room and I said, one of these is yours. You have 10 minutes to figure out which one is yours. And they all laughed because they read them and they're all, yeah, they all look the same. So the challenge is if. If your. If your customers and your prospects think you're the same as every other agent, what do they go to then? Price. And people that buy on price leave you on price. So I think the biggest opportunity as well as can be a challenge as well, is how do you differentiate yourself from other agencies? When someone asks you, why should I do business with you? What's your 30 second elevator speech?

Yeah, yeah, it's obviously 100% agree, just that we work with agencies all the time around and it is fun. And that website game is classic. I love that because it's like sometimes you have to kind of live through it a little bit to really feel it. Right. You can say, hey, you need to be different. Yeah, yeah, yeah, I know. Now you should be different. Yeah, yeah, I know. And all of a sudden you're like, hey, let me show you something. And you're like, oh, my gosh, I can even tell who's us. And it reminds me, I saw was that this was. This was pre Covid, I believe. Yeah, I think it was pre Covid. I was at a conference and I was speaking at an event, and I was talking to a very successful insurance agency leader. And it was funny. And I try to ask questions where I can learn things all the time. And I said, hey, what's been. Would you believe probably your number one thing that you've done for success that helped you be successful? And he said, oh, that's pretty easy. I said, oh, okay, that's. Well, what is it? And he said, well, I just basically look and watch what 95% of insurance agencies do, and I just make sure I do the exact opposite. And we just kind of. We laughed about it. Now, again, it was a bit tongue in cheek. But the point of it is, and you said it, Kurt, it's like we all talk the same thing, we all walk the same thing. And it's like, you know, good service and all this, but what does that really mean? And are we willing to go deeper into that? So I appreciate that and sharing that. So here's a question I want to ask you from a, I guess more of a personal level. You've been a professional in this industry for a long time and obviously interaction with agencies, but I just believe, you know, I believe in this. And I got this from Jim Rohn, who said, you work hard on your business, you'll make a living. You work harder on yourself, you can make a fortune. And so I'm just a big believer in personal professional growth. And so whenever I have anybody that I have on this podcast, I always ask this question. And here's the question, Curt for you. If you were having a conversation with the younger version of you, you can determine how far back you want to.

Go, by the way.

But say as you were starting your career, right, and that younger version of you was looking up at you today and said, hey, Kurt, can you give me one piece of advice? And if so, what would it be? What would you tell them?

Yeah, this is a great question. If I had to reflect back, I go back to probably when I was graduating college and starting my career, the advice I would give to myself is get serious faster. And so what I mean by that is I got off to a very slow start in my career because unfortunately, I was interested in more and, you know, hanging out with my friends and staying out late and partying. And, you know, I had no problem staying out very late at night with my friends and then going to work the next morning, and probably was just not my best version possible, as your book says. So I would have gotten my business priorities more in line at a younger age. And while, you know, my career didn't take off probably till my late 20s, you know, if I could have sped that up five, six, seven, eight years, that's the advice I would have gave to myself. You know, get. Read more books, get more mentors. I was probably a little stubborn, you know, oh, I can do this myself, you know, probably wouldn't. More centers of influence, maybe even hired a personal coach early in life. So just take my career a lot more serious at a young age.

Yeah, that's fantastic. And by the way, you're probably the only person, Kurt, that early in their career, just like their 20s, that they maybe lost a little focus and was more focused on fun. You're the only person that's ever dealt with that. But, you know, I, I obviously can resonate what you're saying, and that's great advice. And it's just, it's, it's. And obviously I'm all for having fun and all those things, but it is one of those things where, you know, I think as we do get older, you do appreciate the time that we have on this earth. And feels like in your 20s, you have forever and then all of a sudden you're like, wait, what happened? And just the amount of momentum that you can gain earlier is incredible. Right. The sooner you can do that. So I think that's fantastic, fantastic advice I would like you to share, Kurt. And I didn't prep you for any of this, but like, one of the things, I'm just really impressed with what you all do in your organization, isu. And so just if you could just for the audience, share a little bit about what it is, you know, how you work with agencies, some of the value creation that you have for agencies. Why would an agency be interested in talking to you guys? I want to make sure you have an opportunity to share some of that.

Yeah, well, thank you for that. So for those of you not familiar with the agency network, it is a group of members that join together and basically we, we pool the premiums and we use the size of the network and the power to negotiate better contracts with the carriers. And ISU specifically concentrates on profit sharing agreements. So when I asked the agency owners, do you remember why you joined ISU and how's it going? Almost all of them say, yes, I joined because I could make more money with you than I could on my own. And it's going great. There are a lot of agency networks that focus on newer startups. And so the. How should I say this? They have a lot more leverage with the agencies. You know, with our average member being three and a half million in revenue, agencies don't need us to survive. They don't have to do business with isu. They join ISU because they can make additional money and we get a lot of positive thumbs up. And you saw it at the conference on the community and the collaboration and just the networking amongst the members. So, you know, we help our members make more money. And my specific role, which is a little different than a lot of other networks, is I'm like a coach or a consultant, specifically working with the agency owners and I talk to them about everything from perpetuation to organic growth. To, you know, how can they work with companies like yourself to make themselves better?

Yeah, it's. And I will say again, you guys obviously had a great event, but it was really interesting for me just to watch that. I mean, the things that I think back at hit speed, you start to see members of your network that have been members for a long time and you know, just, you know, like you said, they're not there because they have to be there because they want to be. They get great value what you do and you're not a fit for everybody. And I appreciate that. You know, the fact. And you were very careful and rewarding there and I understand that too. Right. Like, you want to be with the right agencies for the right reasons that matter. You're very selective in that. So, hey, congratulations to you and the organization on your success. And obviously, if any agency listening is interested, more about that, you know, reach out to Kurt, reach out to the team, reach out to us. We'll connect you because it's a great organization. Before I wrap up, Kurt, anything else? I wanted to make sure I respected your time. You're a busy guy with a lot on your plate, always making things happen. Anything else you want to add just in general before we depart?

No, I mean, I think it's a wonderful business that we're in. You know, I joke around and say, you know, besides the liquor business and the funeral business, I think we're in the most recession proof business in America. It's. It's awesome. Embrace it. You know, there's a lot of people from the outside that don't give the insurance industry all the respect that it deserves. But I think it's an awesome business and you know, wish everybody the best of luck in whatever role they're in.

Awesome. Well, thank you, Kurt, again. I appreciate your time and again, just some great thoughts around the industry that I know. It's a little bit unique from what we've heard from other guests and I love that. Just to get a different perspective. I know it's a lot of value there. So thanks for all the listeners and by the way, if this podcast, whether this episode, prior episodes, if you're enjoying it and I'm getting some great feedback, I certainly appreciate that. Please give it a review, a rating review and a share. We're trying to get more agencies to listen in and certainly want to fulfill our mission to help with clients clarity, consistency and commitment for that best version possible. So thank you again, Kurt. Thank you for the listeners. We'll be back again soon and wish you all the best. And your success?