Roscoe Bolton - Alexander & Bolton Insurance Company
Roscoe Bolton
Words of Wisdom
- I think the most important thing for anybody going into business is to enjoy and like what you are doing. If you don’t like it, stay out of it. You have to like it, or if you find out you’ve started down that road and you don’t want to do it, you better change.
- Accounting is one of the most important parts of your business; you’ve got to be sure where you stand. You want to be sure to set up a good set of books and have a financial statement at the end of every month to see how you are doing, and then, of course, the end of the year statement. That way you can compare from year to year, month to month. That’s very important.
- Try to find good people to begin with. Your employees mean more than anything in the world to you, because if you didn’t have them, you couldn’t handle everything all by yourself.
- To nurture a business, you have to have good employees, and the only way you have them is if you take on the responsibility for making them a good employee. Train them well. They’ve got to be capable, with good personalities.
- Develop a good reputation so people will rely on and trust you. Service means everything.
Entrepreneurial League System
Mentor Interview
ELS Mentor Interview: Roscoe Bolton – CEO and Chairman of the Board of Alexander and Bolton Insurance
Date: September 16, 2009
Location: Alexandria, LA
Interviewers: Felix Mathews and Greg Lichtenstein
Felix: “Mr. Bolton, tell us about your background, where were you born, where were you raised, etc.”
“I was born in Alexandria, spent all my life here. My Grandfather was George W. Bolton and my father was Roscoe Conklin Bolton. My name is Roscoe Alexander Bolton. My middle name is after J. W. Alexander, a very prominent man in Alexandria, who everybody called Colonel Wallace. I went to West End Grammar School and Bolton High School. In those days, we had eleven grades, so I was pretty young when I finished high school.
“After graduation, my father wanted me to go to Louisiana College, so I went there for a year, and then went on to Wharton School of Finance, University of Pennsylvania in Philadelphia, PA where they accepted all my courses except Bible. I finished in 1933, which was about the beginning of the end of the 1930’s depression, but things were still pretty bad.
“Before I finished at Wharton in 1933, Roosevelt had been elected, defeating Herbert Hoover. He was inaugurated in March of 1933, and in about a week or two, he declared a week-long bank holiday. Every bank in the nation had to close, which stopped the runs on them. The nation was having horrible runs on banks.
“My dad sent me a postal money order when the banks were closed and said, ‘Son, make it last as long as you can, because I don’t know when I will be able to send you any more money.’
“To give you some idea of how low the prices were, you could buy ten packages of cigarettes for a dollar. That was a carton, which today would cost much more. A room at a fine hotel would cost $3.50 a night. When I finished at Wharton, I came back home and worked for Alexander and Bolton, which was an old firm. Mr. J. W. Alexander started the J. W. Alexander Insurance Agency on January 10th of 1890, and this year we observed our one hundred and eighteenth year in business.
“Mr. Alexander served two or three terms in the State Legislature, and had a lot to do with the writing of our worker’s compensation law. In 1911, my father started in the insurance business with a man named Richmond Lewis, forming Bolton & Lewis Ins. Agency. In 1912, Mr. Alexander realized it would be a good idea to merge with the Bolton and Lewis Agency, which had connections with the Rapides Bank. Thus, the Alexander, Bolton and Lewis Agency was formed.
“In 1926, Lewis resigned and the name became Alexander and Bolton, Inc. I graduated from Wharton in 1933 during the depression and joined Alexander and Bolton. That was the beginning of my insurance career. After about a year, I went to work for the USF&G home office in Baltimore, Maryland for about eight months to get Home Office experience.
“They were our leading company. We placed practically all of our business with them, particularly the liability business and worker’s compensation. We were very heavy into worker’s comp. The first setback I remember came not long after I began with Alexander and Bolton. We got a telegram from the President of the company, around 1934, telling us to cancel all of our worker’s compensation business immediately.”
Felix: “That was from USF&G?”
“Mr. Alexander wired him back and asked for a meeting, which they granted. My father, Mr. Alexander and I went up there and spent a couple of days with them. I never will forget the Board of Director’s room where we met with several of their people. We were on one side of the table and they were all on the other.
“They listened to Mr. Alexander’s story. Mr. Davis was then President of USF&G. Mr. Alexander said, ‘Mr. Davis, I’ll make you a proposition. You continue with us on worker’s compensation business, and for every point our loss ratio goes over 60%, you can take a point out of our commission.’
“Mr. Davis answered that right quick. He said, ‘Well I can see you’re a sporting gentleman. I can’t help but accept your offer.’ We were very happy over that and were profitable from then on.”
Felix: “Most of your insurance was in worker’s comp. That would have been detrimental to your agency without the agreement.”
“Yes, it sure would have.”
Felix: “What was your job when you first went to work for the agency?”
“My initial job was handling payroll reports on worker’s compensation policies.”
Felix: “So you just jumped right on in.”
“Yes. I handled that, plus some sales. Of course, I didn’t know enough about insurance to be too much of a salesman; I had to learn as I went along.”
Felix: “So you all were still profitable at that point, even with the worker’s comp agreement?”
“Yes! For example, we wrote the Long Bell Lumber Company account out of Kansas City. They had saw mills all over the South, and we wrote all their workers’ compensation insurance.”
Greg: “When you joined the firm, was there a plan for you to eventually take over and learn everything?”
“Yes, Mr. Alexander took a liking to me, so I think it was in the plan that I would eventually take over. In between that time, it would be my father. My father was a technical man. Mr. Alexander was the public relations man, meeting with people and that sort of thing. He had had quite a lot of experience and a well-known background.
“He moved here from Virginia, married a local lady, Miss Cora Luckett, and they had a very nice home on Jackson Street. As I said, that was my first experience with some difficulties. Of course, we had other things. We had some people with us who, had unfortunately stolen, and that had to be taken care of by my father. It was pretty rough.”
Felix: “When did you become more involved in management?”
“After Mr. Alexander died in 1938, my father began to depend more upon me and pushed me in order to prepare me to take over. He was about 84 years old when he died, and by that time, he’d pretty well pushed and trained me. I majored in insurance at Wharton and liked the business. I still like it.”
Felix: “I have twelve entrepreneurs on my team and I encourage them to establish a close relationship with a bank or banker. The other thing I tell them is to build a close relationship with their accountant so they have an effective accounting system and know where they stand financially. What has been your experience in that regard? Do you have any advice on that?”
“I think that is certainly true. Accounting is one of the most important parts of your business; you’ve got to be sure where you stand. We’ve always stressed that. We’ve had a separate accounting department and always had good people handling it for us. We have an excellent person now. She’s with Brown and Brown now, and she’s assisting with the accounting for four offices: Lockport, Lafayette and two in Alexandria. The Insurance One Agency was also bought about the same time. They’re going to be joining us on December 1st of this year.”
Greg: “How did you grow the business? What kind of thinking was involved?”
“It’s a sales job. You have to go out and convince people that you have the know-how to handle their insurance account, all phases of it. Eventually, when they’re convinced of that, we usually get the account.”
Greg: “Did you end up adding various product lines over the course of the years?”
“Well, there have been different lines, but essentially they’re all either property insurance or liability insurance. We also have what’s called ‘Inland Marine’, which I think is a misnomer. It has to do with jewelry insurance and furs, property that moves around a lot. Then there’s workers compensation, which comes in on the liability end of it.
“I think the most important thing for anybody going into business is to enjoy and like what you are doing. If you don’t like it stay out of it. You have to like it, or if you find out you’ve started down that road and you don’t want to do it, you better change.”
Felix: “The other thing I advise my clients is to manage their employees. Some of my clients say, ‘I can’t attract qualified employees or I can’t keep my good employees.’ I’m so impressed when I look around this office and see people who have been with you for many years. It has to reflect on your management skills.”
“We treat our people fine and, of course, now that they are with a big corporation like Brown and Brown, it’s quite a change for them. We’ve been good to our employees, paid them well, and took care of them. We used to have big parties at the Hotel Bentley when Mr. Alexander was living. Similar to what Rapides Bank did for its annual party.”
Felix: “I look at Donald Coco, Red Thompson and other people here. How many years have they been with you?”
“Red’s been with us since 1960, and Donald’s been with us between thirty and forty years.”
Felix: “You must be doing something right. I always tell my entrepreneurs they have to communicate with their employees, hold staff meetings so employees are aware of company goals.”
“We try to find good people to begin with. Your employees mean more than anything in the world to you, because if you didn’t have them, you couldn’t handle everything all by yourself.”
Greg: “How has the business changed since you got into it and what have you had to do to respond to changes?”
“I think the biggest thing has been the change with computers. We do all of our correspondence on computers, and I don’t even know how to turn a computer on.”
Felix: “Your business has grown tremendously over the years, even with competition in the area. At one time, you didn’t have any competition.”
“Yes, we’ve got a lot of competition now.”
Greg: “Did you grow by capturing more of the marketplace, or did you extend your geographical territory?”
“We’re still primarily right here in Central Louisiana. We don’t have any other offices or sub-offices. We’ve never done that. I suppose we probably should have, but the closest we came to it was when we had brokers out of town, like down at LeCompte, and up around Boyce. Wade Jones was a broker for us, and he did very well.”
Felix: “What approach have you used to advertise, now and in the past?”
“Actually, we haven’t advertised in recent years. In fact, we really don’t advertise, nor do any of the other local agents or companies located here. We used to do it. We had signs on the city busses, road signs, and that sort of thing. We even put ads in a TV program at one time. That was years ago.”
Greg: “Was there anything unique about doing business here, as you went to trade association meetings around the country and met with your peers in the insurance industry? Was it different, or how is it different in this marketplace?”
“I don’t know that it’s really different. It’s all the same for agents or brokers. We’re known as brokers now. We represent a number of companies and you have to get all the market you can. It’s a very competitive business.”
Felix: “Accounting gets down to real basics. Entrepreneurs need to know if they are making any money or not.”
“This company has always had a separate accounting department that had nothing to do with the rest of the office. That’s all they did. The principals of the company have always highly recommended that to everyone going into business. You want to be sure to set up a good set of books and have a financial statement at the end of every month to see how you are doing, and then, of course, the end of the year statement. That way you can compare from year to year, month to month. That’s very important.”
Greg: “How did the economy in Alexandria change from when you got started to now?”
“Alexandria has always had a pretty steady economy. We are not heavily industrialized, so we don’t have a client with a thousand or more employees. If any big industries close, it hits the town pretty hard. We’ve never had much of that.”
Greg: “Over the years since you started, have you seen a lot of entrepreneurs starting new businesses? What’s your judgment of how good they have been? Have you seen businesses get smarter and better?”
“I think people now are better able to start a business because they are better educated, but I’ve always come back to, “If you don’t enjoy and like what you are doing, then get out of it.”
Greg: “Where did you get your advice over the years?”
“I guess my father was really my mentor. He was the technician in the firm. Mr. Alexander was the ‘glad hander.’ He had a wonderful outgoing personality. My father did too, but he was more serious. Mr. Alexander wasn’t interested in the financial side of the agency. I think when my father went with them back in 1912 that changed it all, because Mr. Alexander didn’t worry about money.”
Greg: “But someone was there to control him so he didn’t get out of hand.”
“The president of one company told me, ‘You’ve got the perfect setup between Mr. Alexander and your father. Mr. Alexander is the ‘glad hander’ and Mr. Bolton is the one who’s settled, who really knows financial statements and all that.’”
Greg: “Everybody has a different opinion about partners, so we’d be interested in yours.”
“Mr. Alexander was several years older than my father, so my father always respected him. My father would question things about the business and Mr. Alexander depended very much on him. He’d always give the dirty work to my father. We’ve had embezzlement, more than our share, I suppose. So he would let my father have those. I remember going with my father once to New Orleans.
“We owned a New Orleans insurance agency, which was a brokerage firm, and they were what we call a general agent. If you are familiar with a general agent, they would represent different companies and farm the business out to different agencies. The agent goes through the general agent and the general agent goes to the company. We had a general agency down there named New Orleans Underwriters. The president of that organization went south, so I went with my father down there to confront him. It was a tough thing to do.”
Felix: “After Mr. Alexander and your father were gone, did you have anybody else to advise you, or did you make decisions on your own?”
“I was on my own then. I always used to have close relationships with our competitors, but that’s all changed now. It’s all pretty much a cold business now. We used to go up to visit the home office in Baltimore, and then go over to New York and visit the home insurance companies. We’d know the presidents on down, and had that good a relationship with those companies. They all knew us well.”
Felix: “That’s all changed.”
“That’s right. It’s a cold world out there.”
Felix: “If you had the opportunity to go back in your business life, would you make any major changes?”
“I think we’d probably establish some offices around in the State. We sell more of the larger accounts today than we did before, and Brown and Brown certainly does that. They have a different method of paying producers, and that forces them to get out and produce. But we’ve doing well; we’re ahead of last year.”
Greg: “Was Wharton good preparation for your eventual career?”
“Yes, I majored in insurance.”
Felix: “We talked about some challenges that you faced and overcame. Do you have any other success stories?”
“We’ve been really successful and developed a good reputation. People rely on us and trust us. Service means everything in this business.”
Greg: “Do you have any advice for entrepreneurs? A lot of them feel really isolated.”
“I can understand that, because it’s a real big undertaking. You want to do it right, of course, and I think that means your accounting is all-important. You need some advertising to get going, to expand. I think that’s very, very important.”
Felix: “What about managing your people, setting goals for them, holding them accountable and training them? A lot of people give employees positions, but they don’t train them.”
“You have to train them. Handling employees can be a tough thing.”
Greg: “You said Mr. Alexander was one of the people who started the company, and he was also was instrumental in getting workers comp insurance established in the State?”
“Yes, that’s right. All of the states didn’t have workers compensation originally. It was all liability. Employees who were injured would sue their employer, so they found out fast that they had to have something, so they developed workers compensation. We were one of the early states to approve and adopt it.”
Greg: “Mr. Alexander was part of that?”
“Yes. I think he served three terms, so that’s twelve years in the Legislature.”
Greg: “So he helped shape the legislation that actually created a business opportunity.”
“Yes, with the assistance of Mr. Howard Gist, who was a prominent local attorney.”
Greg: “It’s always interesting, you know, when a lot of people see a business, they think that if it comes in their lifetime, it was always here, but at some point it wasn’t here. Somebody created it, somebody was the entrepreneur that said, ‘I think if I do this I could make some money’, so it’s always interesting to hear where it came from originally.”
“We started off representing Equitable Life Insurance Company. This is when it was J. W. Alexander, LTD and he was quite a fellow. He’d didn’t concentrate on the accounting, and that gave him some problems, I think. He was well known, so he started off in the life insurance business, and then a year later, he made the connection with the Hartford Insurance Company. Then, a year later, he also took on the Royal Liverpool group of companies. Those were British companies that had United State’s offices. Those were the two companies he used, but we still represent the Hartford.”
Greg: “A lot of people deal with their competition by avoiding them, but Mr. Alexander dealt with his competition by joining forces, which took away the threat.”
“Absolutely! I think it was a very wise move for him, and for them, too. They were a fairly new agency, Bolton and Lewis.”
Greg: “Can you notice a difference in people that have commercial insurance? Do they have the energy, the knowledge, the drive and the motivation to be successful?”
“That’s the main thing.”
Greg: “You can see it when you are talking to them.”
“There are a lot of fellows who, after they work for a company for a while, leave and go on their own in the same business. That’s, I think, a very wise move, because then you are out of the umbrella for a company that’s been in business for a while.”
Greg: “They do things their way and you might want to do something different. Have you had many spinoffs, people that have left and formed their own business?”
“Well, we’ve had a few. The last one we had was Dewayne Moore. He left and went to work for an agency on MacArthur Drive. Then he left there and worked with someone else, and then went with another company, where he is now. It’s an agency out of Baton Rouge, and they’ve been bought by a bank.”
Greg: “Did you have any children that you were able to convince to work with you?”
“My son came with us for a while, but he really never was too interested in it, so now he lives up on Cane River and has his home up there. He has a nice personality, and would have made a good man, but he wasn’t interested in it. That’s why I say, if you are not interested don’t get in it.
“To nurture a business, you have to have good employees, and the only way you have them is if you take on the responsibility for making them a good employee. Train them well. They’ve got to be capable, with good personalities, particularly in this business. They’ve got to have a lot of contact with our customers, and with the public over the phone. When people come in, our customer service representatives (CSRs) usually see those people.”
“We’ve had some good people. We believe in educating them. That’s very important in the line of business that we’re in, and we have several of them that have gotten CIC designation, which is excellent and requires a lot of work. There are five examinations that you have to take to get that designation.”
Felix: “And they’ve been involved in civic activities, so they get outside. People can identify them with Alexander and Bolton. When they have an insurance question or need the coverage, that’s who they are going to call.”
“You’re right! They need to make a lot of connections.”
Felix: “Do you have any other advice you can offer?”
“Another thing in this business that’s very important is seeing that the losses are handled properly and promptly. If you don’t do that and the company messes up, or the adjuster has a poor personality or something like that, and the customer’s dissatisfied, you will hear from them.”
Felix: “Yes, when customers have a claim, they want a fast response.”
“We had a unique position. One thing that tied us to USF&G was that we had a claim department. We were what they called a direct reporting agent, and there were three of them in the United States. Well, they weren’t in the United States. One was here in Alexandria, one in Nova Scotia and one in the Panama Canal.”
Greg: “What did you have to do?”
“We were direct reporting, had our own claim department, and handled all the claims here to a conclusion for their business. That’s why most of that business was in USF&G, because they gave us that unique setup. We were one of only three in existence.
“They had some general agents that they were with, but other companies were represented by that general agent as well. As I mentioned before, the general agent is between the local agent that’s making the sale. They’re like the wholesaler, and then there’s the company, which is the manufacturer.”
Greg: “Was it that way from the beginning?”
“Pretty much. Companies have always realized that. State Farm and AllState go direct, and they started that, but they haven’t always been in business. So that was a very distinct advantage for us. For example, we had losses with banks, or robberies at banks. I remember Rapides Bank had one at a branch and we were able to go right in.
“John Switzer was our adjuster. He was quite a character. He’d move right in on the case, handle it, and we’d get the check to them that day. That’s the kind of authority we had. We would draw the check here.”
Greg: “Were there other things that made you agency unique?”
“I think probably knowing the insurance company’s president and others. That’s always a big help, because for most of the companies we represented, we dealt through a general agent. However, with USF&G, we handled their claims and adjustment for all losses. It was a nice setup, but got discontinued around 1969.”
Felix: “Do you have any other comments?”
“I think the most important thing to tell an entrepreneur is that you want to have good people working for you. You want to be sure you’ve have good accounting and know how to read a financial statement. If you are doing badly, you better do something about it, otherwise you’ll be out of business pretty quick, and that’s hard to do. You have to work, and that means after five o’clock. Sometimes you don’t sleep at night.”
Felix: “I know Greg joins with me in saying we appreciate this interview and you agreeing to be a participant in our Mentor group. Thank you.”
“I thank you for selecting me to interview.”