IBA: Heffernan Insurance Brokers traces its roots back to a small insurance agency in Walnut Creek, California. What made you decide to purchase that agency?
Mike Heffernan: After gaining experience with both independent and public brokers, I decided I wanted to run my own independent brokerage. I knew I needed a base so that I had some insurance carrier relationships, and I wanted to have majority ownership. I found a small agency in Walnut Creek that was in a bit of a tricky financial situation. I was able to negotiate a majority ownership on day one, which meant I could direct the firm’s transformation.
IBA: What immediate changes did you make to turn the agency around?
MH: To start off, I renegotiated everything from the computer system contract to the lease agreement for the office building to every kind of vendor contract we were involved in. I established a strong sales culture from day one. I made every salesperson more accountable for their actions in order to turn the firm into a sales organization – and it worked.
A couple of employees really engaged with the culture and became more successful than they had ever been in the past. For example, I promoted an account manager, Melani Conti, who I thought could be a top salesperson. Melani is still with Heffernan Insurance Brokers today, and she is one of our more successful salespeople.
IBA: Fast-forward to 2019, and Heffernan Insurance Brokers is one of the largest independent insurance brokerages in the US. What’s the secret to your success?
MH: It’s all to do with our people and our culture. Many of the key employees in our organization have been with us for over 20 years. That has allowed us to keep moving forward and never look back. I think that stability is key to our success.
It also comes down to our strong sales culture. Our job is to sell insurance and do a good job for our clients. Everybody in our organization knows that, believes in that and helps us to succeed.
IBA: Are there any challenges to remaining independent?
MH: No, not at all. We have strong competitors who are public, who are private-equityowned and who are independent. I think we compete well against all of them.
We believe we’re a strong independent brokerage, and we want to stay that way. As long as we’re comfortable with our strategy going forward, and our balance sheet is strong enough to take care of shareholders moving down the road, we should be fine.
IBA: Heffernan Insurance Brokers donates more than 10% of its profits to charity each year. How did that come about?
MH: We believe that giving back to the community is an essential part of running a business. Over the years, we’ve donated over $11 million. It really is part of our DNA. It’s something that has allowed us to celebrate the communities we operate in by helping others who are less fortunate than us achieve what they want to achieve.
The one thing that’s interesting to me is that in 30 years of giving back, not one of our shareholders – and we have over 130 – has ever asked: “Why don’t I get a dividend when we’re giving money back?” That’s a testament to the kind of people we have working here, and it shows it’s important to them that we give back to the community. That’s probably the thing I’m most proud of.
