Business: Musical chairs for North Fork insurance brokers

08/05/2011 3:56 AM |

KATHARINE SCHROEDER PHOTO | Southold Town Supervisor Scott Russell, center, does the honors at a ribbon cutting ceremony for the new NSA Insurance Agency in Southold on Tuesday.

In an increasing consolidation of local insurance services, the Neefus-Stype Insurance Agency has acquired the Peconic Bay Insurance Brokerage in Southold, and has opened its own Southold office next door to the firehouse on Route 25.

The move follows Neefus-Stype’s merger with the Joseph L. Townsend Insurance Agency last year. At that time, Mr. Townsend and agent Lee Fitting continued to work out of Mr. Townsend’s Greenport office, but after that office closed last month Mr. Townsend and Mr. Fitting have been working out of the new Southold office of Neefus-Stype, which has since been rebranded NSA Insurance and Financial Services.

Peconic Bay Insurance Brokerage agents David Fujita, Jason Luhrs and Jason Wahl will join Mr. Townsend and his staff in the new Southold office, in the former location of East End Insurance Services, which recently moved to a new office in Feather Hill in Southold.

In the small world of East End insurance agencies, NSA’s new office also happens to be the office that Peconic Bay Insurance Brokerage occupied when it first opened its doors.

“We were a smaller agency and we were at a crossroads as far as growth. We were thinking, ‘do we continue on our own or look for a merger?’” Mr. Luhrs said. “There was also a market compatibility. They had markets we didn’t have. They basically are where we wanted to be in five to 10 years. It didn’t make sense for us to re-create the wheel. They gave us the ability to write basically any account that crossed our desk.”

Mr. Townsend began his affiliation with the Neefus-Stype Agency well before the two companies merged last year, when he realized that economies of scale are becoming ever more important in an increasingly competitive insurance market.

“The initial idea was to expand my Greenport office, but we started looking at other options,” said Mr. Townsend this week. “NSA has a lot of eastern clients and Southold looked to be a good option.”

The Neefus-Stype Agency itself was the product of a merger in 1999 that combined the See Neefus and Val Stype and Sons agencies, both venerable North Fork insurance companies that had been in existence for the better part of the 20th century.

But their business is changing rapidly, and NSA senior partner Peter Sabat said this week that his agency’s move to acquire other agencies was necessary to survive in a competitive insurance market.

Mr. Sabat said NSA’s customers will be able to receive service at the company’s Southold, Aquebogue and Port Jefferson offices, regardless of where they had initially obtained their policy.

“We’re always looking for new ideas,” said Mr. Sabat, who pointed out that, in addition to insurance, his office offers referrals for everything from discounted natural gas services to payroll companies to estate planning from companies on which they have done their own due-diligence investigations.

“Business today is 24-7,” he said. “A lot of my peers bury their heads in the sand, but we have a pretty youthful organization. We want to do this for another 100 years. It’s all about competition today. Not everybody has billions of dollars for advertising like GEICO. But they’re not about what you need. They’re about saving you 15 percent. That works until you have a claim. When you need it, it’s gotta be right.”

Mr. Sabat said local insurance companies have an advantage in the homeowner’s insurance marketplace, because they can work with a number of different underwriters to get the coverage homeowners need, whereas companies like Allstate have been “more stingy about writing policies on Long Island due to the hurricane potential here.”

“You’ve gotta change. If you don’t stay ahead of the game, you’ll be gobbled up,” he said.

Mr. Sabat’s peers in the industry agree that becoming bigger is one way to stay ahead of the game, but Christine Debona, who recently took over the management reins at East End Insurance in Southold, which used to occupy the new NSA office, said it’s not the only way.

“It’s all about local service. We believe that we have a great staff. They do a great job and they pay attention to their clients. That’s how you get business and keep business,” she said.

“We have been in a very soft market in the insurance business for a long time,” she added. “On the brokerage side, the easiest way to grow is to buy other businesses. It’s been at least 10 years that the market has been soft. Even if you hold on to your existing business, your revenue shrinks because premiums go down and it’s a commission based.”

Ms. Debona’s office is in the former headquarters of Southold’s Allstate agency, owned by Chris Manfredi, which moved to Route 48 last year after 13 years in Feather Hill.

“My partner had sold me his side of the business, and we wanted a fresh start in a new place,” said Mr. Manfredi this week. He declined to comment at length on the state of the industry, stating that he was proud to offer the Allstate brand but that Allstate’s corporate offices handle their media inquiries.

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