Shepherd Insurance and Financial Services has enjoyed a flurry of expansion over the past couple of years, and chief executive Dave Shepherd believes the Columbus area is poised to be one of his fastest-growing outposts the rest of this decade.
“Columbus is going to be very similar to our Evansville operation. We started there eight or nine years ago with three employees, and now we have 23 people,” Shepherd said. “We want to expand in areas that are experiencing good economic growth and stability, and that’s exactly how we see Columbus.”
Shepherd Insurance has been adding to its Columbus business for the past two-and-a-half years, making this area more important for the 110-employee
In 2010, Shepherd bought Dirk James and Associates in Columbus and followed that by acquiring Drew Denny and Associates about six months later. Both of those deals brought new clients into the fold for both small-business insurance and employee benefits offerings.
More recently, the company pumped $150,000 into renovating office space at Eighth and Washington streets, and Shepherd said he expects the Columbus operations to grow quickly from its current six employees.
“This year, I expect that we’ll add at least two or three more employees there,” Shepherd said.
Shepherd’s insurance and financial products have become more diversified as the company has acquired a string of competitors in recent years.
Its business lines are split about equally with one-third of premiums in commercial lines of insurance, one-third in personal auto and home insurance and one-third in health insurance or employee benefits packages.
Clients say Shepherd has managed to hold on to its small-town roots as it has grown to more than $225 million in insurance premiums.
Charlie Weber, chief financial officer with Decatur Mold Tool and Engineering in North Vernon, said his 120-employee small business expanded its dealings with Shepherd after getting to know the company via its purchase of John Moore insurance agency in 2007 and the Drew Denny acquisition more recently.
Decatur Mold used to have its small-business insurance with the Moore agency, and it was using Drew Denny’s shop for its employee benefits package, Weber said.
More recently, Decatur arranged to offer health insurance to its employees through Shepherd. Its current plan includes a health savings account option recommended by Shepherd.
“It’s an economical solution for many of our employees, and it gives them more control,” Weber said. Premiums are less expensive than traditional insurance, although the employee must pay a bigger share of expenses out of their HSA account when buying medicine or making visits to the doctor.
The company’s biggest deal occurred last December when Shepherd acquired AscendUSA, an Indianapolis-based health benefits brokerage. Shepherd said consolidation in the insurance industry is being driven by many factors, including family-owned businesses selling when the founders realize no one else in the family intends to take the reins.
Shepherd said more deals may be in the offing. He doesn’t necessarily want to be the biggest agency in the state, just one of the best.
“Already, we’re one of the largest writers of insurance for Anthem health plans. We have clients in 47 states. We see ourselves as a one-stop shop, offering everything from health insurance to setting up 401(k) plans for small business owners,” Shepherd said.
“Our clients come in all sizes — from businesses with five or 10 employees to the thousands.”
Shepherd said health savings accounts are becoming more common as his agency sells health insurance plans to new clients or renews policies.
“We also have a successful insurance business with hundreds of truck dealers around the country. We insure the physical locations and provide workers’ compensation insurance,” Shepherd said.
Shepherd said the evolving landscape of health insurance remains a niche where his agency and others must work closely with clients to find lower-cost options.
“Health savings accounts are big,” Shepherd said. “You’re going to see larger deductibles and more cost-shifting from employers to employees. The wellness trend is also going to continue.”
Employees who lose weight or stop smoking will see lower insurance costs, and those who don’t stop bad habits may face penalties under certain insurance packages, Shepherd said.