Q&A with Nathan Breece, Trevor Gettmann & Steve Sarkisian

In 1978 Steve Sarkisian opened America Insurance Agency in Philadelphia, PA. In 2007, he turned over agency operations to his son-in-law Trevor Gettmann, who ran the business until his move out of state in 2023. This year Steve’s grandson, Nathan Breece, purchased the agency which now has locations in Newtown and Langhorne, PA.

Q. Steve, tell us about America Insurance Agency’s beginnings. And what was it like starting an agency from scratch in the late ‘70s?

A. Steve: I finished college in 1971 and worked as a real estate agent until 1976, when I started my own real estate company. By 1978 we had six offices and 150 agents. That success gave a wonderful influx of leads to start a personal lines insurance agency. Getting an appointment with an insurance company was difficult, but when they saw the real estate company’s success, they were willing to give me a shot. With thousands of home sales from my real estate company, the homeowners’ market grew rapidly. Expanding into auto and life was an easy transition.

Q. Steve and Trevor, what have been the biggest changes to the independent agency system over the years?

A. Steve: Some insurance companies have tried to make personal lines products a commodity that can be bought off the shelf by answering a few questions online. It used to be understood that having a professional insurance agent review the options and discuss your budget versus risk was the way to go. In the past companies considered the independent agent a frontline underwriter, but technology has reduced the scope of the agent’s underwriting role. While I am not optimistic that personal lines can be independent agents’ main focus in the future, I am confident that independent agents will continue to thrive in the commercial lines market. There will always be a need for an agent to visit the business and advise on their various insurance needs.

A. Trevor: There are two major differences that really stick out in my mind. The first thing is technology. When I started, everything was in a filing cabinet, and there was a typewriter at pretty much every desk. We had at least five companies where we had to manually rate. The computer certainly helped speed up the process to quote and service our clients.

As a direct result of this, the second thing that changed is our relationship with company underwriters. Because of our ability to leave detailed notes, we now have a team, instead of that one assigned underwriter whose children’s names you knew. I miss the relationships, and I’m glad we still have one company (Hanover Fire and Casualty) that gives us one underwriter so Nathan gets to experience that.

Q. Trevor, tell us about the technological and operational changes you implemented during that critical time period you ran the agency (2007-2023).

A. Trevor: The very first thing I did was to go paperless. It was October 2007, and Charlie Spencer, another agent in the Philadelphia area, graciously allowed me to see how he was using TAM in his agency. Once my IT company and I saw what it could do, we moved full speed ahead. I also combined our home and auto insurance departments. I wanted anyone who called in to get immediate assistance. This was not necessarily well received by staff at first, but it was exciting to see the employees rise to the challenge.

Beyond that, I always tried not to micromanage. I wanted each employee to have the framework of how to sell and service clients in the insurance industry and then let them use their unique gifts, talents, and abilities to meet our clients' needs.

Q. Nathan, you went to work at the agency right out of high school. What was it that intrigued you about the industry?

A. Nathan: Like most agents who join the family business, I had no interest in learning about the industry! In high school I worked a couple sales jobs and really enjoyed them, but my ultimate plan was to go to school for music. It was in 2016 that Steve and I had a heart to heart about coming to work for him and establishing myself in a more stable industry than music. I will never forget mentioning the idea to my Uncle Trevor, and he set up a job interview later that week.

Q. Nathan, you really hit the ground running with your career. What advice would you give to other young agents just entering the industry?

A. Nathan: The best thing I did was pursue my CISR designation in the first year or two. Learning everything you can about coverage, exclusions, and definitions through a designation program gives you the confidence to speak with clients. (I am not being paid by IA&B to say that!)

My other advice is don’t be scared to try things differently than other people – whether that is your marketing, your processes for customer experience, or the type of business you write. If you do what the average agent does, you will end up with average agent results!

Q. How did the idea for Nathan to purchase the agency come about, and how did the plan evolve?

A. Steve: Nathan was becoming more and more experienced at running the sales department, and I knew it was time to make a commitment to him. To be a real success requires a great sacrifice of time, money, and energy, and Nathan deserved to know his efforts would go into building something for himself.

A. Nathan: The original buy/sell was in place between Steve and my Uncle Trevor. When Trevor decided to move to Ohio and work remotely, he graciously offered that Steve and I could produce our own buy/sell that would supersede his. Within the agreement between Steve and me, we allowed for a sale of the agency before his death which led to us exploring all the different options to make the deal work.

Q. What type of outside help did you enlist to streamline the transition? And what was most beneficial?

A. Nathan: We worked with Kelly Drouillard, a consultant specializing in M&A with insurance agencies. The important points she established for us were:

1. A feasibility report to conclude how much expense the cash flow of the agency/I could carry in terms of loan amount,

2. How much cash flow would be freed up with Steve no longer the owner, and

3. A review of the various outside financing options and the pros and cons of seller financing.

We used our CPA firm to advise Steve of the various tax implications of selling the agency, including:

1. Capital gains consideration

2. Federal and state income tax

3. How it would fit into future tax planning

4. Setting an interest rate (We learned that you cannot have a 0% interest loan, so the government releases a required minimum interest rate each month that we needed to use.)

Once we knew we wanted to move forward, we found an attorney who was very experienced with the sale of insurance agencies. With the attorney, we worked on establishing the loan terms, life insurance as collateral, legal protection of the stock in the event of default, and limitations on purposefully devaluing the stock.

Q. Overall, what advice would you give to others who plan to perpetuate a family agency?

A. Steve: Start with a professional consultant who is good at evaluating an insurance agency’s value and has been involved with the sale of many insurance agencies. An experienced person is quite valuable in advising you what you can afford to do and explaining options on how to do it. Next, review that consultant’s plan with your accountant. After we had a few meetings with the consultant and knew what we wanted to do, we had a lengthy zoom meeting with the consultant, the accountant, and the attorney so we were all on the same page. This helped the attorney understand what needed to be included in the legal documents to match the financial considerations and terms we all agreed on.

A. Nathan: When it comes to family perpetuation, my biggest advice is that all parties are completely transparent and that expectations are set up front. Because Steve and I knew what each other needed to make it happen, instead of negotiating against each other, we were negotiating with each other. This also allowed us to present to the professionals the outcomes we need and then let them figure out the best way to do it.

Q. Nathan, you’ve recently added staff and opened a second office. What goals have you set for yourself and the agency?

A. Nathan: We are definitely in growth mode! As an agency, our new business is up over 350% since I took over sales in 2019, and I personally wrote about $800,000 in new business in 2023. America Insurance was historically a personal lines agency, and we added commercial lines a few years ago, which helped diversify our book and open more opportunities for new business. We also brought on a full-time life producer to make sure we can offer as many products to our existing clients as possible.

My goal is to continue establishing a company culture for my producers and customers. Over the next five years, I will nurture my existing producers into manager roles where they have their own team of producers working for them. I want my agents to have a long career in the industry, be rewarded for hard work, and feel valued, but it takes building a desirable culture to fulfill this.

Q. Steve, congratulations on your retirement! What have you been up to?

A. Steve: I am Vice President of Paul Tripp Ministries which is a nonprofit ministry with 16 employees working from various states and even internationally. In addition, my wife and I enjoy spending time with our three children and their spouses, 10 grandchildren, and two great grandchildren -- with a third coming for Christmas. We spend eight months a year at our beachfront condo in Fort Lauderdale and four months in a 7,500-square-foot family compound near New Hope, PA with Nathan and his wife Rachel, and our daughter Laura and her husband Michael. Having family dinners together with nine people including a 16-month-old and a 4-week-old is too good to be true.