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From the Front Lines: Construction

“Long-lifecycle customer relationships are how agencies can drive profit,” says independent agent Ross E. Johnson. “Those are built on strong service relationships from knowledgeable people for long periods of time.”
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From the Front Lines: ConstructionRoss E. Johnson


Mountain State Insurance Agency

Charleston, West Virginia

How did you get started at your agency? 

After college, I worked in a small agency for a couple of years before moving to a construction-oriented agency. I stayed for 12 years. In that agency, I was fortunate to learn the surety bond business, as well as construction insurance, and attended several International Risk Management Institute (IRMI) construction risk conferences. The agency was acquired by BB&T shortly after the Financial Services Modernization Act made that possible. Soon after the acquisition, I purchased the Mountain State Insurance Agency, a very small agency that had some critical agency appointments. Since 2000, I have grown my agency from a 2.5 full-time-employee firm to a 25-person firm.

Why construction insurance?

My agency first focused on construction insurance and surety but then added an oil and gas niche about the time the Appalachian Basin Marcellus gas play came into being 20 years ago. The construction market was a natural building block based on my 12 years of experience at the prior agency. The oil and gas niche was an obvious addition to my construction agency because of the overlap with commercial contractors supporting natural gas exploration.

Challenges in the construction market?

On the surety side of the construction market, the primary changes have been related to credit-based underwriting and making it easier for emerging contractors to obtain surety credit. The biggest change on the insurance side came in 2005 when West Virginia privatized workers compensation and made a monopolistic market competitive. This change allowed our agency to hone our skills and grow significantly. From a hard market perspective, the social inflation impact on auto rates and excess casualty access and capacity has been most significant.

Advice for a fellow agent?

Our No. 1 differentiator is knowledge. We place a very high priority on every customer-facing employee obtaining multiple professional designations. The employee makes themselves more valuable to the agency if they make themselves more valuable to the client. Long-lifecycle customer relationships are how agencies can drive profit. Those are built on strong service relationships from knowledgeable people for long periods of time.

Olivia Overman is IA content editor.

Monday, December 18, 2023
Commercial Lines
Big I Markets