VOL. 126 | NO. 240 | Friday, December 09, 2011
Memphis Standout Profile
Dewald’s Insurance Brokerage Undergoes Industry Changes
By Andy Meek
Jack Dewald went to work for his father in 1982 at Agency Services Inc., a full-service life and health brokerage agency his father started in 1962.
(Photo: Lance Murphey)
Flying home a few days ago from Washington, where Dewald was attending the meeting of a trade association board, he found himself reminiscing on everything that’s changed about his industry – from lots of new regulation to the technological innovation of recent years to the normal ups and downs of running a small business.
Coupled with that is the specialized niche he and his team fill. Dewald’s company is an insurance wholesaler, akin to a manufacturer’s rep.
Dewald says the traditional insurance agent, in general, is now close to 60 years old, so Agency Services is diligently trying to work with and develop new financial advisers. Also over the last several years, Dewald has been forced to do what many small-business owners around the country have found themselves confronted with – the task of re-engineering their operations as circumstances around them change.
“You really have to be adaptable,” said Dewald, who was the 2010 board chair of the LIFE Foundation, a national group that educates people on how life insurance works and why they need it.
The mission of that group complements one of the biggest parts of Dewald’s work now, which is heavily focused on life insurance. In addition to the LIFE Foundation, Dewald has been involved for years with NAILBA, the National Association of Independent Life Brokerage Agencies.
“With the economy, the way it’s struggled over the last three or four years, with depressed yields and alternative investments, life insurance has become a very effective tool for wealth accumulation,” Dewald said. “It’s become an effective tool as an asset class, and it’s become an effective hedge against people’s depressed portfolios.”
Dewald’s staff today is essentially comprised of people focused on helping insurance and financial advisers meet their clients’ needs. The staff is also a lot smaller than it used to be because of a big adjustment that had to be made.
Agency Services Inc. had a long heritage of being involved in the health insurance business, but Dewald sold the better part of the company’s health insurance operation in 2003 to a company that eventually was sold to Aetna Inc.
The company had almost 90 employees prior to the sale. The day after, it was down to 15. Even so, Dewald was proactively responding to market conditions.
“With the economy, the way it’s struggled over the last three or four years, with depressed yields and alternative investments, life insurance has become a very effective tool for wealth accumulation.”
Agency Services Inc.
“It was well before health care reform started to brew, but it was already becoming a political hot button in 2002 and 2003,” he said. “I came to the business conclusion that we couldn’t organically grow that business through our existing distribution model, because there was such consolidation going on in the business.”
Dewald attributes some of his success to the strong business foundation he got early – both after graduating from the University of Arkansas with a degree in finance and insurance as well as during the years he worked under his father, a job he began three weeks after graduation.
“I bought him out in 1994,” Dewald said. “I was 35 when I bought him out, and he was 60. He’s now almost 78 and in great health, and he’s still very involved in volunteer work here in town.
“I’ve been going to D.C. for over 15 years for two national trade association boards, and I’ve served as chairman of both of them. Over those 15 years, there’s been a lot of water under the bridge, just thinking back on all that’s changed law-wise and in our industry. And last Thursday was my very last board meeting of those two organizations. It’s been a fun ride but bittersweet to step out of that work I’ve been doing so long.”