Canadian Underwriter

The Atlantic Approach

October 15, 2013   by Regan Reid

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The way David Huestis tells it, there’s nothing extraordinary about his firm’s success. “I’ve been blessed to have opportunities come my way,” says Huestis, the owner of The Huestis Insurance Group, a Saint John, New Brunswick-based brokerage with 40 offices across the Maritimes. But those who have worked with Huestis know that there’s more to the story than that. He’s described as an astute businessman, an incredibly hard worker, and, above all, client-focused. Since he incorporated the brokerage in 1966, Huestis has applied a distinctly Atlantic-Canadian approach to his business—by putting the client and community first, he’s seen his business soar.

Acquiring in the Atlantic 

After completing a degree in mathematics and pre-medicine at Acadia, and completing one year of medical school, Huestis switched into the business program at Dalhousie University in Halifax. Upon graduating, he returned home to Saint John to make sure a certain nurse he had his eye on didn’t slip away. While home, his uncle, who was operating a small brokerage out of his house, invited Huestis to work with him. After just a year and a half in the business, Huestis purchased his first two brokerages—and the company has not stopped growing since. Now one of the largest brokerages in Atlantic Canada, The Huestis Insurance Group employs 231 staff in 40 offices throughout New Brunswick, Nova Scotia and Prince Edward Island. “We went around, knocked on doors, met agencies and talked to them. And when some of these agencies were right, we bought some of them,” Huestis says casually. “It seemed to work out pretty well.”

Though modest about his company’s growth, Huestis has always been very strategic in his acquisitions. He has a group of advisors that helps him in his business decisions, he works with a respected insurance consultant, and the company has a list of 40 to 50 financial and operational criteria that each new brokerage must meet. The price of buying a brokerage is, of course, a top concern. “Price today is well over three times [book value]. When we first started buying it was one-and-a-half or one-and-three-quarters. So, obviously, you have to be very careful that when you buy it, it fits.” To ensure a brokerage “fits,” Huestis needs answers to some key questions. “What are the loss ratios? What’s the commission per employee? What’s the CPC [contingent profit commission] five-year average? What [are] the ten largest commercial accounts?” And, of course, “What is the relationship with the customers? That’s the key,” he says. The customer relationship is the cornerstone of Huestis’s business plan and the brokerage’s key to success. “We believe that it’s very important to be close to the customers. Thus, we’re in smaller communities and that works great for us,” he says. Though The Huestis Insurance Group does have offices in larger cities, such as Halifax and Fredericton, the majority of its offices are in smaller communities. “Most of these agencies we’ve bought, they have been the largest or the next largest agency in that community and they’ve been around a long time. They have a good reputation and have a good relationship with the people in the community.”

Purchasing brokerages in smaller communities, in Atlantic Canada in particular, is not without its challenges. The region’s economy has been largely stagnant in recent years and unemployment in the Atlantic provinces is much higher than the Canadian average (In August 2013, for example, the Canadian unemployment rate sat at 7.1%, but was 10.7% in New Brunswick.) “A number of communities who used to be very vibrant and thriving, they’re now running at 25% to 30% unemployment. We’ve had a lot of our youth move out west. These communities have significantly reduced their sizes,” he says. “So whether you’re living in a large, growing metropolis area or whether you’re living in a small rural community like Lower Rubber Boot in Atlantic Canada, you must always serve your clients. As we lose about 10% of our clients each year, we have to write 10% new business to at least break even. So our agency size is directly dependent upon the scope of the geographical area we have chosen to serve.” In order to ensure continued profitability in all offices, Huestis has had to downsize brokerages and adopt the latest technological advances.

“We’ve done a number of things to still be efficient and effective and yet cope with the reality of the location in which we’re located.”

Location, Location, Location 

On the flip side, precisely where Huestis’s brokerages are located has a lot to do with why the company has been so successful. As Huestis (and most Atlantic Canadians) will tell you, business is done differently in the Maritimes. “We have, on average, probably 600 to 700 people who visit our offices every day,” he says. “So the tradition of wanting to talk to someone, wanting to have a conversation—in person—is still very much alive, despite all that people say. Now, in the larger metropolitan areas I don’t believe you would have the same number of customers visiting as we do in the Maritimes.”

Louis Gagnon, who is a close friend of Huestis, has travelled across Canada in his role as president and COO of Intact Financial Corporation, and he too believes that there seems to be a different way of delivering insurance in Atlantic Canada. “I think in Atlantic Canada, the people are very close to their community—not just the financial aspect, but the social impact they have on their community,” he says. “Brokers see their role as larger than just providing insurance. [It’s about] being there to support the community.”

Huestis being inducted into the Regal Circle of the World Scout Foundation

Huestis in particular, he says, has been a great supporter of his community. “For David it’s bigger than [the business]. There’s family, the employees, his role in society, his role in making a difference. That, I think, makes him successful, but also respected,” says Gagnon. Huestis has volunteered with Scouts Canada for more than 40 years and has been a member of the World Scout Foundation for 10 years (he was recently awarded the Bronze Wolf, World Scouting’s highest award, by the King of Sweden). Huestis’s brokerages also participate in more than 40 community activities, all offices give an annual bursary to their local high schools, and the company is a major supporter of the IWK Health Centre. As a broker, Huestis says, “You’ve got an opportunity to help your fellow citizen.”

For Huestis, this means showing up when the clients need you the most—in the event of a loss. “I really want all of us to deliver a good-sized claims cheque,” he says. These are not just words to Huestis; it’s clear he really lives it. He gives the example of the one Christmas Eve when he learned a client’s house had burned to the ground. He was out doing his Christmas shopping (“Like many husbands, I leave it until the last day”) when he got the call. “I’d gone to the bank; I had several thousand dollars in my pocket. Well, you know I didn’t get much for the family that year. We did fine, but I went out and I spent that day just helping that family get settled,” he says. “I bought them all a whole load of lobster. They were Newfoundlanders and they thought it was great.”

Moving Forward 

The Huestis Insurance Group is primarily in small towns, the majority of its business is in personal lines, and the brokerage puts considerable value on face-to-face interactions, so one could be forgiven for assuming that the brokerage is in some way falling behind the times. But in truth, Huestis’s brokerages have adopted the latest technologies and work with the major markets, they’re simply very good at maintaining their broker-on-the-corner appeal. “They’re able to take the efficiencies of using technology—whether it’s through transactions, through uploads or through the various portals—but yet not lose sight of having the face-to-face contact with the individual customers,” says Gordon Murray, Aviva Canada’s vice-president of business development for Atlantic Canada. He adds that Huestis gives the same level attention to a quarter-million-dollar commercial account as he gives “the individual with the single-family home or the retiree living on the fixed pension. He’s always been very open to the customer and he’s got a wealth of experience behind him over a stretch of more than a few years.”

With those decades of experience behind him, Huestis is slowly transitioning control of the business to a team of executives. “I’m not one who is going to just stop,” says Huestis. “When you own your own business and you’ve built it as I have, you have a real interest in not only the business as it is but as it’s going to be.” So although he is still involved in many aspects of the brokerage, Troy Bowen, chief operating officer at The Huestis Insurance Group, is “more and more” taking on responsibility of the daily operations of the brokerage offices. Going forward, Bowen says, the company is committing to more of the same. “David’s really worked tirelessly to build The Heustis Insurance Group into the strong performing, client-driven organization that it is. And the team coming behind him today, we’re just as dedicated to moving the company forward in the same fashion,” he says. “But we do understand that past success doesn’t necessarily guarantee future success and that you can’t stand still. That’s not an option.” The Huestis Insurance Group is looking to technology to help improve its operations and it is investing heavily in the education of its people. Most importantly, it’s focusing on its clients. “No matter what we do going forward,” says Bowen, “we have to make sure clients are the focus because, really, they’re the reason why we’re here.”


Copyright 2013 Rogers Publishing Ltd. This article first appeared in the September 2013 edition of Canadian Insurance Top Broker magazine

This story was originally published by Canadian Insurance Top Broker.