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Once “just an accountant,” DeCarlo has built the
second-largest wholesale insurance broker.
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He learned the basics of business—and life—caddying
at a New Jersey country club
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Weathering Any Storm
Give him any situation and insurance
wholesaler Steve DeCarlo will figure out how to make it work.
He has the scars to prove it.
By
Louise Lague
There’s no clutter in Steve DeCarlo’s office in
Charlotte, N.C. It has the glass-walled acreage worthy of the
CEO of AmWINS, the nation’s second-largest insurance
wholesaler, but it is curiously under-furnished. A desk, a few
chairs, a laptop. And over on the bookcase, a small statue of a
caddy to remind him of his origins. That would be
“helping rich people play golf” back in South
Plainfield, N.J.
“I’m from the wrong side of the tracks,”
he says. “Put me with the caddies, telling stories,
telling lies.”
Such modesty is appealing, but it does have a side
effect—that feeling of being a kid who’s in over
his head. “I’ve been in insurance for over 25
years, and I’ve never underwritten an account, brokered
an account, or handled a claim,” he says.
“I’m just a finance guy.” But then, he adds,
“Impostor syndrome is common in guys who run
hard.”
If M. Steven DeCarlo does have impostor syndrome, nobody
else can see it. Loquacious and affable, he calls himself
“just an accountant” who gets a kick out of
building businesses. This is his second such invention. When he
took over as CEO of Americana Financial, an insurance
distribution firm, in late 2000, the company, with 110
employees and a usual revenue of $20 million, had just lost $13
million in one year. Two years later, he turned it into
American Wholesale Insurance Group—AmWINS, for
short—and continued to snap up the 16 specialty
wholesalers that comprise the company today. By 2008, AmWINS
had 1,000 employees and 35 offices nationwide, with combined
premiums of more than $3.3 billion.
“I’m not surprised by how fast and how big Steve
has grown that company,” says Kathy Aberson, senior vice
president at Royal Special Underwriting, Inc. (RSUI), who
worked for DeCarlo for 10 years. “He’s a builder,
and it can’t be something small. It’s got to be
big, and he’ll do it very well.”
The process was painful. When he was first hired at
Americana, he says, the company was “doing a lot of
things not very well.” In 2001—“the year from
hell,” as he calls it—DeCarlo basically gutted the
organization, dropped the retail and MGA functions, dismissed
all but three employees, and relocated headquarters from New
York City to Charlotte. He still feels pain over two former
Americana employees in New York who left the company as it
failed. They joined Aon and perished in the World Trade Center
attack. “If this had been a better company,” he
says, “they’d be alive today.”
One of the three employees re-starting the company was Scott
Purviance, now CFO. “Steve is probably one of the
smartest, pure businesspeople I’ve ever met,” he
says. “Some people have risen strictly through sales or
marketing, and they don’t necessarily grasp the
soup-to-nuts of what happens in a business. This, he clearly
does.”
Meatballs and Grits
DeCarlo’s fast talk stands out in Charlotte, but his
style was the norm back in South Plainfield, where DeCarlo was
an altar boy and “the classic kid who pretended he was
good but got away with murder.” His Italian father was
the guidance director at his high school, and his mother was
from the hills of Tennessee. “I grew up with meatballs
and grits,” he says.
South Plainfield was also, notoriously, a golf school. Hard
by the Plainfield Country Club, it was the kind of place where
“you could get out of high school if the caddymaster
called because we needed the money. I could cut a class and
make $16.” But it was definitely an underdog job. His
sense of the backstairs life was so strong that “the one
time I got to play at Plainfield Country Club as an adult, I
felt so out of place. I kept wondering if I would get caught
and thrown out of the clubhouse.”
Though his sister had been a statewide champion Latin
scholar, DeCarlo’s dad discouraged dead languages for
Steve. “After two years of Latin, he said to me:
‘I’m thinking…accounting.’”
DeCarlo studied accounting at East Tennessee State
University, where his parents had met and which had
“great golf programs.” Though he was “barely
on the golf team—I was more of a
‘wannabe,’” he says. (Flash forward: At ETSU
he met classmate and golf-pro-to-be Mike Hulford, for whom he
caddied on the PGA tour in 1985, taking time off from his
insurance job. “That was fun,” he says.
“I’d do that again anytime.”)
After college, DeCarlo returned to New Jersey and got a job
as an internal auditor for Crum & Forster. “I got to
travel and meet all these insurance executives from Monday to
Thursday,” he recalls. “Then on Friday, I told them
what they were doing wrong.”
[Page 2 of 4]
In 1984, DeCarlo was offered a job as an assistant vice
president at The London Agency, Crum & Forster’s
specialty underwriting operation in Atlanta. (The London Agency
eventually became part of what is now ACE Westchester.) There
he came under the guidance of CEO Steven Smith, who became his
boss for 13 years and promoted him to CFO. “He took me
places I didn’t think I’d go,” says DeCarlo.
“He taught me how to think about the business side of an
insurance organization and how each unit, from the support
staff to the underwriter to the broker, played an important
role in a successful organization.”
Smith, now retired, says he saw in DeCarlo “a guy who
could do a lot more than finance. He’s very bright,
he’s very organized, and he has an outgoing personality
that’s rare in an accountant. We had him doing all kinds
of things, including marketing and human resources. He was good
with clients as well.”
In 1988, DeCarlo followed along as CFO when Smith and his
business partner, Jim Dixon, left to start RSUI, an excess and
surplus lines firm that would be 51% owned by the British-owned
Royal Insurance, which had U.S. headquarters in Charlotte and
in a later merger became Royal & Sun Alliance. In this job,
DeCarlo got to interact with the customers, who were all
wholesalers, adding quite a few experience arrows to his
wholesale quiver. The job also brought him to Charlotte.
Aggressive, Opinionated, Hard-Headed
“I was an aggressive, fast-talking, opinionated
hard-headed kid when I became CFO of RSUI,” DeCarlo
recalls. (“That’s about right,” says
Smith.)
Smith and Dixon, “took me under their wing and guided
me,” DeCarlo says. “They allowed me to build a
technology platform that supported the entire organization. We
are trying to duplicate that model again here at
AmWINS.”
When seven years later the team sold their share of the
business to Royal & Sun Alliance, DeCarlo stayed on with
RSUI as senior vice president for business insurance until
2000.
That was the year that Americana Financial, in terrible
trouble, was looking for someone to lead the firm back into the
black. “I was interested,” says DeCarlo,
“because it was wholesale and technology combined with
the need for finance skills. It sounded right up my
alley.”
At the time, the company was a combination of what DeCarlo
calls “three great wholesale distribution firms and
several retail brokerage firms.” But it also had “a
bloated corporate structure that was severely hurting the
profitability of the firm.” Besides that, “the
technology they built was not effective and we never utilized
any of it,” he says. “The firm was initially
capitalized by a private equity firm and at the time I joined,
that private equity firm owned over 95% of it.”
DeCarlo joined Americana Financial as both board member and
CEO in December 2000, took a breather over the holidays, and
then spent 2001 purging the company of people, real estate and
its brokerage firms. By the end, the company consisted of
DeCarlo and two employees.
Rebuilding began at DeCarlo’s home library in
Charlotte, where he interviewed and hired help until an office
could be rented. In 2002, poised as a wholesale insurer bearing
the name AmWINS, the company began an aggressive acquisition
program to swallow up wholesalers in brokerage, benefits and
underwriting. One insurance publication at the time compared
the buying streak to “a race car driver zooming from zero
to 100 miles per hour in first gear.”
“There wasn’t a lot of competition for
acquisitions at the time,” says DeCarlo, “because
most of the wholesalers out there were still family businesses
and didn’t have the capital to expand. The larger
wholesalers were all owned by large retail firms and
weren’t focused on growing their wholesale
operations.”
Once the companies are in the stable, says DeCarlo,
“we value the entrepreneurs in these organizations. When
we acquire a company, the entrepreneurs don’t leave. We
want them to continue running the business, and we support them
with technology and other services. We have a very
decentralized business model.”
[Page 3 of 4]
As the divisions keep selling, the Charlotte office
“can provide support services on a bigger scale and more
economically. So we let the principals keep doing what they do
so well. We don’t sell from the center. Basically, the seventh floor in Charlotte
is all coneheads who don’t make money—we just spend
money.”
Wholesale, Plain and Simple
In aggregate, AmWINS’s specialties now include
maritime employers, woodworkers, beer and wine wholesalers,
underground storage tanks, solid waste haulers, physicians,
private schools, child care centers, fire sprinkler contractors
and an armored car cash-in-transit program. One AmWINS division
has also long been the wholesaler for Domino’s Pizza, a
company with a high exposure because of its use of privately
owned delivery cars.
One important selling point for AmWINS is its independence.
Most wholesalers are owned by retail brokers or a bank that
owns a retail brokerage. This one is an independent wholesaler
that doesn’t compete on the retail side.
“We’re not trying to be all things to all
people: an insurer, a retailer, a reinsurer, an M&A
firm,” says DeCarlo. “We’re totally focused
on what we do: being a wholesaler for retailers.”
Collecting companies—each with its own philosophy,
culture, products and regional markets—and putting them
all into the same corporate pot is no easy task. “When
you bring 40 or 60 people into a culture,” DeCarlo says,
“you have to impose unity so they’re not always
talking about the old firm.” At producer events, DeCarlo
uses especially impish ways to get people together. “Last
year I gave them all poker chips and told them to keep them on
their persons at all times because that was important. They
assumed there would be prizes. Nothing.”
That same night, DeCarlo had 16 “leader”
volunteers come up on stage. The next day, during a
team-building exercise in the desert, the 16 competed in a fear
factor contest that involved eating strange things, jellied
pigs’ feet among them. “At the end, we gave them
all a big hip hip hooray, but…no prizes,” says
DeCarlo. “I’m known for ‘ya never
know.’”
The point of such random puckishness, he says, is “to
get them to spend time with each other, know each other, and
learn to like each other. I’m giving them common
experiences to talk about. It promotes unity.”
He admits, “Part of my shtick is to make fun of
myself.” At RSUI, he ran the client golf tournament at
Pebble Beach, and “everybody knew me as an honest guy, a
fun guy, a lively guy. And it matters! It’s a people
business!”
Aberson agrees. “Steve is probably one of the
brightest human beings I’ve ever met,” she says.
“He’s got the intellect, a great gut instinct,
great people skills, and he creates a lot of
loyalty.”
And that education he attributes to caddying. “I
learned a lot of life lessons carrying those two bags for eight
years,” he says. “How to treat folks, and how not
to, and what it means to work hard.”
Lague is West Coast Bureau Chief Louise.Lague@LeadersEdgeMagazine.com
TheDeCarlo File
[Page 4 of 4]
Steve DeCarlo
Home: Charlotte, N.C.,
“a fantastic place to raise a family.”
Married: For 22 years to Lee
Ann, whom he “met and married in 90 days.”
Children: Jenna, 21, Reid, 17,
and Nick, 16
Ride: 2008 Toyota Tundra and
“no toys!”
Teams: Carolina Panthers;
Charlotte Bobcats
Do-Gooding: Urban Ministry,
Charlotte Soup Kitchen
Business Memberships: The
Council Board of Directors, American Institute of Certified
Public Accountants, Charlotte Chamber of Commerce
Big Brag: “Making the
cut at this year’s Pebble Beach Pro-Am. Only 20 make
it.
There will be 80 celebrities, 99 important CEOs and one
insurance accountant.”
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Full Leader's Edge Archive. Previously published articles, listed by subject below.
Industry Leaders
Wholesalers
Legal Issues
Regulatory Issues
International Risk
Human Resources
Industry News
Regulatory News
Market News
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