Knowledge Center

Knowledge Center Items Podcast Episode 57

Why You Never Know How Your Greater Purpose Will Appear

Published on

Most of us rarely plan to get into this industry, let alone stumble on a deeper mission.

One thing is for sure, you'll never find it if you don't have the guts to step out on your own.

Because there's only so much you can plan for and sometimes it takes a happy accident to change your agency.

Then all of a sudden you could be opened up to a whole new world of insurance you didn't know existed.

David Cayemitte, President of The Cayemitte Group, talks about his journey through the industry and the chance he had to find his purpose.

For more Change Insurance episodes, click here.

Full Episode Transcript

Joey Giangola: Mr. David Cayemitte. How you doing today, sir?

David Cayemitte: I'm great. I'm great. You?

Joey Giangola: David, I'm doing all right. I'm doing all right. I kind of want to know this before we get into anything too serious, but what's like the last thing that you did that you were generally interested in that made you feel old?

David Cayemitte: I used to play soccer, big part of my life. And now that I'm 57 going on 58, I just had major knee replacement, major knee surgery, full knee replacement. So I'm feeling a little bit old now.

Joey Giangola: All right. Well, so for me, David, I was just, I found myself reading about road construction in my town and feeling generally interested in it. And I'm like, man, if 13 year old me looked at myself reading about road construction and being generally interested in what was happening in my local area. I just, it was one of those things, it's like where you kind of catch yourself doing that thing. You're like, man, I've turned into my parents and you're not sure what to do about that. So I want to shift that over to insurance a little bit more, David. And again, it seems like your first day in the business, it's generally just an old industry. It's had the old perception, right? What was that like for you, I guess? What is that thing that you kind of feel is that old vibe? Why do we have that sort of mentality around the industry?

David Cayemitte: Yeah. It's one of the oldest industries ever around. Right. For me when I joined in 1987, I joined AIG. Most people fall into the insurance business. They don't pursue it. But for me, it really meshed everything that I really wanted to do. Not knowing about it. Not understanding it to begin with. Studying finance since in school. And I love economics and insurance has a lot of those components to it. Right. And the fact that you're always evaluating stuff. So since the day of London opened the market, it's always been that aspect of it. Right. If you like to analyze things, if you like to figure things out, which is the risk management component of it, if you like to understand the world and everything that works in it, all those things make up the industry. I guess, gives it that old vibe. And it will always be around. Right.

Joey Giangola: You're studying economics and finance, was insurance on the radar at that time? Or was it something that was introduced later after the fact?

David Cayemitte: Absolutely not. Not on the radar at all. Again, I fell into it. My first job out of college was at an OTC firm doing back office grunt stuff. And I just happened to be playing soccer with somebody and we were talking and next thing you know, he was at AIG and he told me about insurance. And I said, Hm, that's interesting. I went back to my finance professor and he says, that's a great industry. And here I am however many years later. That's how I fell into it. Networking.

Joey Giangola: So, I mean, I guess you weren't even out of college yet before it kind of came your way like, you were sort of-

David Cayemitte: It was a year after graduated. So I graduated 85 and I started in June of 87. So it took a minute to find myself. Yeah.

Joey Giangola: So, was there that moment that you maybe had that you bumped up to and said insurance, like, ah, I'm a finance guy. I want to be doing something a little bit more flashy. Was that somewhere in the front of your mind?

David Cayemitte: Absolutely. When my friend first told me about it, we played soccer and then we were just talking in the parking lot and he was like insurance. I'm like, that's terribly boring, but I needed a job. And there was safety involved in it. And next thing you know, my interview, and the guy had hired me pretty much on the spot. And I've loved it ever since. I've not contemplated going to another industry since then, frankly. And I would say that a lot of people just don't understand the industry. There's so many, many aspects of the industry. It's a great industry and it's a safe industry.

Joey Giangola: Yeah. That's definitely true. So you've been around like you said, around the industry for a while. So what do you think maybe we're facing today, right, in terms of people trying to come in. You have your own agency. What do you look at when you're talking to people trying to bring them into the industry? Is it something that they are still sort of struggling with themselves? What is that process like for you guys when you are looking to expand and sort of approach new talent?

David Cayemitte: Yeah, it's a great question. And that really depends on the position. We do consulting related work as well underneath our umbrella. So when we bring people in for administrative or non brokerage type of thing, that tends to be the most complicated. Most people think about it from the vantage point, oh, it's auto insurance or it's home insurance. They don't understand the complexity of it. And when they here about a month or two, they're like, wow, this is very involved, very encompassing. We tend to get people then on the administrative side, more interested on the brokerage side of the house. If you currently are in the industry as a CSR account manager and so forth, you're coming in, you understand the industry. But for those that don't know anything about it, it takes a moment for them to be really introduced to the concept that this is not a boring industry. It's actually very fascinating because it has all the components that you could think of really.

Joey Giangola: It is. It is. It's a slow burn. Right. It just takes a little bit of time to sort of warm up to. So I'm curious if you have a moment where you sort of said to yourself, man, this is something that, going back to the idea of like, everybody has this perception of what it's like or whatever. Is there something that you sort of discovered when you maybe went on your own in your own agency you said, I'm going to do it this way. This is something new that I want to try that I haven't really seen operate before. Is there something that you feel like you kind of uncovered that's sort of maybe a little secret to your success?

David Cayemitte: Well, for me leaving, I was at Travelers before I opened the Cayemitte group in 2005. And it's interesting because very good company, safe environment. In that stage of my life, I had two young kids, two young children under three years old. So you could imagine the decision making process going along with it. Right. Leaving what I call, leaving a nice cruise ship and jumping off into the Indian ocean, not having run an agency before, not knowing how to do anything. And here we are 16 years later. But what I would say is that what was fascinating to me when I got into the business is there's a finance element in insurance that I love. I was trained under the, what we call the professional liability book. Everything that exists in the Wall Street Journal. Right. The front page of the New York Times. Everyone getting sued is an issue, et cetera, et cetera.

That's the space I grew up in. And to that end, I've always, for me, it ties in all the components that I love, finance, economics, what's happening in the world. And it became very easy for me to then say, okay, how can I take my training at AIG, my training at Travelers, and compete with what I would say is the small to medium-sized brokers? And that's what we did. So our strategy was to go after small stock midsize companies and our first few accounts we were successful. And then we've since migrated to who we are today. So it was an interesting transition.

Joey Giangola: I definitely want to get back to sort of how you view yourself today versus kind of where you started. But what do you think, I guess maybe gave you a leg up there in that initial sort of jumping off point, right? You said, I've got the sort of maybe specialized experience along the professional liability front. What were you coming across that was really turning heads with those initial clients like you said, that maybe other brokers weren't talking about? Was there something that sort of stood out to you during this conversation, like, oh, this is obvious to me, but it was maybe being glossed over by everybody else?

David Cayemitte: So the market space, particularly in the professional liability world is very compartmentalized. You have the very large brokers, you have a lot of specialty agents that know the business very well. And then you have the generalist. I wanted to compete against the generalist and not the specialized or the establish. And that's the space where we targeted. And our first few accounts where it's just that. How we won was providing the training that I'd gotten at AIG and Travelers and to help the CEO, or the treasurer, or the small company understand the exposure. And they're like, oh, my generalist guy is not that deep.

So the value that I brought to the table was my training. And we continue to do that today. Even competing on the larger accounts or with the larger firms, that knowledge base is still there. So we're specialists in some degrees, right, in some of our practices, or some of the products knowledge, and where we compete against generalists. And that's the value that we bring. Plus the servicing. From an underwriter standpoint, I saw many opportunities where the account could've been handled better. And so I saw there was a gap there that we fill today.

Joey Giangola: All right. So I got to ask real quick then, what are some of those areas that you thought were vulnerable for the service front that you could attack?

David Cayemitte: A lot of brokers want to touch things once and leave it until the next renewal. We do a lot of handholding here. And even though we have a small book of business compared to the big boys, our retention ratio is very high and that's one of the measureables of a broker, right, is how much business you retain. So you can live, if you will. Right. We're always in a 92 to 96% retention ratio outside of COVID-19. Unfortunately, we lost some clients because they went out of business, some small businesses. But we never wanted to be super large for personal reasons. That allows us that servicing where we know the client personally. They can pick up the phone anytime, any day where one of us will provide that service and they love that.

Joey Giangola: So what was that evolution process like then from sort of identifying that first sort of area, right, that target? Like, hey, we're going to go against these generalists because we have some specific knowledge that they're just not going to be able to touch. And now to maybe where you're at today, what's the thing that's working? What's that new approach?

David Cayemitte: Well, I'm not certain there's a new approach relative to the professional liability book. We still target and conduct ourselve that way. What we have done though, is migrate to both a major consulting operation, as well as particularly in the, what I would call in the minority space. Because of Katrina, when we first started, we got involved with the Katrina event, which was a national event, obviously. And at the time they were people scrambling away from New Orleans, away from Mississippi. And we had the opportunity to help a lot of people come back into the city, particularly those that were contracting firms. Because they needed to get back up and running and they need an insurance. They needed bonding.

And that effort or initiative has led us to who we are today, partly who we are today. And that we service a lot of women owned, minority owned firms with getting them insurance, getting them bonding, getting them prepared to do work on large construction or public related projects. So we've migrated from being a specialist in a professional world to a larger initiative, and that we help minority and women owned businesses get prepared to receive contracts. And we're so proud of that effort.

Joey Giangola: Where did that pop up? I would imagine there had to been an account or two outside of there that said, boy, there's an opportunity here. Again, much like that knowledge gap from the generalist to the agent. An underserved market probably would be the easiest thing to say. And what was that sort of moment where you sort of said, hey, this is something that we just kind of have to do?

David Cayemitte: Well, again, it was the Katrina event. There was a prospect, Arnold Baker of Baker Ready Mix. I was chasing. He introduced me to at the time, the people that was dealing with the mayor of New Orleans, which was HUD. Right. HUD wanted to help the mayor rebuild. The mayor wanted to put out an edict to hire minority firms as an incentive to bring people back to the city. The opportunity was, well, a lot of these folks that the city of New Orleans won a contract with directly needed to be bonded because you're talking about taxpayers' money. That opportunity right there gave me an opportunity to share with at a high level, with the mayor's office, sitting down with them like, this is what you need to do. And what I came to learn is that a lot of people didn't understand what the process was in order to do that, what I would call economic development.

And that's where it tied into to my background in finance and economics. Right. Having been trained as an underwriter, I'm like, wait a second. This is a national crisis. In that conversations, I got to meet with the then president of a national federal agency called MBDA, Minority Business Development Agency. And he reached out to me, I'll never forget. I was at a hotel. He reached out to me and said, hey, I'd like to talk to you. I met him downstairs for a cocktail. And we sat and he said, well, can you help us all over the country? I said, sure, if you're going to provide opportunities, right?

So they became a natural producer for us and that we were solving a problem for them. Right. And they were solving a problem, not a problem, an opportunity for us, which is they would send in submissions. They would invite us to help XYZ person in Arizona, or in Utah, and Mexico, and so on and so forth. We further learn that this was a national endemic issue. And that is a lot of minority firms that are struggling to participate. And that's why we became and are licensed in so many States as part of that initiative to help people.

Joey Giangola: Did you think that this was going to be part of the plan when you, again, set out to leave that job, that comfortable job? Was this something that was even on your radar?

David Cayemitte: Absolutely not. I actually had no clue about this space of what we would call minority set asides, the minority spins. I was trained under the professional liability book and learning to deal with CEOs, CFOs, treasurers, senior people at fortune 500 companies. That's what I was trained to do. I knew nothing about this economic development space that we're in.

Joey Giangola: So I love to ask this question, David. So there's tons of people I would imagine across the industry that are in a similar position now. Right. That are in a comfortable job, that are underwriting, they're doing something else, but they have their eye on that, maybe I could do that sort of thing. What would you say to them if they're there now, and again, knowing that you didn't have it all figured out, but you found something that is probably more fulfilling, rewarding than you could have ever anticipated. What would that be?

David Cayemitte: Yeah. I mean, like starting any business and we consult new business owners as well as established business owners, you got to have a plan. I wrote a business plan. I literally went out and raised capital. Right. It's a business. Thankfully enough, I found a banker pretty quickly. So I utilized my network to get my advisors. I had a lawyer at the time, I had a CPA, I had a banker, I had a business plan. I actually took the business plan out to numerous universities, including Temple, just to say, hey, take a look at this. So I had a lot of arrows thrown at it. I had friends in the business, take a look at it. From that vantage point, I went from draft to final. And every year we go out and update the plan because things change, right?

No one knew what COVID was going to happen, as an example. So you have to always stay with the changing tides. It's never, ever, ever the same. I've had some buddies who say to me, man, I've thought about this. How did you do it? And the other thing is, you really have to have some guts to step out. Because it's easy to be at a place where you're getting the paycheck, you're doing your work, you're getting your paycheck. And now you have to produce each and every day. So instead of waking up at seven, now I'm up at four in the morning. You got to go make the donuts.

Joey Giangola: That's very true, David. That is very true indeed. I've got three more questions for you,

David Cayemitte: Sure.

Joey Giangola: Sir. And the first one is very simply, what is one thing that you hope you never forget?

David Cayemitte: Great question. From a business perspective and particularly running the agency and our businesses, that our employees are critical to our growth and survival. And taking care of them is an invaluable resource for us. So choosing the right people, the right team members is something that you stay with you because there's so many things happening. And at the end of the day, you can't fulfill your vision. You can't execute without the right team behind you. And so whatever business plan you lay out, whatever vision that you have, you always need great support.

Joey Giangola: All right, David, on the other side of that, what's one thing you still have yet to learn?

David Cayemitte: I would say probably the same thing with regards to the employees, right, is to get it right, to hire correctly, to develop continually, and to make sure that you're looking at immediate short and long-term views of the needs of the staff. There's so many things now. There's so many competing interests and sort of, you got to keep your eye on the growth of the company, the revenue. But also you've got to be mindful of all of the individual staff members and their respective needs, whatever level that they're at. So to us at, to me, rather at the end of the day, you really can't survive in what we're doing, what we're trying to do, and what we want to do without the right staff. Everything else is product. Right. The product is there. You could learn the product. But to execute, you need the right staff. You need working capital. Obviously, you need the money, but you need the right staff to execute. So for me, for running a business, the most important thing is the right team.

Joey Giangola: All right. David, last question to you sir. If I were to hand you a magic wand of sorts to basically reshape, change, alter, speed up, really any area of insurance, what is that thing? Where's it going? And what's it doing?

David Cayemitte: One of the areas of focus for us is the surety area. And that's probably also one of the most, I would say respectfully dated areas. It's one of the only products besides life insurance, that has the human element in it. Right. All of the other products for the most part, are commodity. How much is this risk? What is this? And you could pretty much put a premium to it. But with regards to the surety product that has a qualification and starts with at least in what we do, the sector that we do that focuses on personal credit scores of the owners and their spouse, focuses on a lot of behavior issues. That area I think, has not change with the times. And I've love to see the industry figuring out as the United States is also changing from majority to minority, at the end of the day, things have to change accordingly with that.

So there's a lot of social economic issues associated with being qualified, past history of various groups, whether it's women, whether it's black, whether it's this. All of those things needs to be taken into account as it relates to underwriting. And a lot of the sureties do a good job at it. But for the most part, it's not as black and white because there's a human element into the product. So I'd like to see a little bit more of that coming across the industry, not just a few of the sureties. It's a little bit stodgy, if you will. And I want to be respectful. They're very, very good people. Very, very good analytical minds there, but there's a human element that's threaded in the business that I don't see that is totally weaved into the underwriting process.

It's not underwriting order. An order is, what is the call? How much is it worth? And who's the driver? For the most part. Versus the surety area, particularly for the market space that we're in, which is largely zero to 25 million, it's a lot of personal underwriting, underwriting of the personnel of the company and the owners. And to that end, part of the issue is the underwriting process is black and white, but should it be all black and white? And that's the challenge I'm pushing the industry and we're changing a number of ways we look at things as well. And that is, we're hoping to have influence and change in the industry by the process and how we are approaching it. And I think that's the most important thing. Everything will and must change over time.

Joey Giangola: David this has been fantastic. So I'm going to leave it right there.

David Cayemitte: Thank you for your time. I appreciate you.

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