Photo: Daniel Dinsmore
Mankatoan and outgoing president of national association representing 23,000 independent insurance agencies has contemplative side.
Mankatoan Mike Donohoe has found his anam cara in the writings of the late Irish priest John O’Donohue, author of the popular book Anam Cara: Spiritual Wisdom from the Celtic World.
Anam cara is Gaelic for “soul friend.” Author O’Donohue believed people become soul friends when their souls are knitted together in a trusting, mutually appreciative, and transparent environment. You can reveal anything to an anam cara and he or she will always accept you for you.
The tome reached best-seller status in 1997, which was the year Mike Donohoe began his annual reflective pilgrimages to the Jesuit Retreat House Demontreville, near Lake Elmo, Minnesota, where he has said absolutely nothing for four consecutive days each year for 16 years. While many of his acquaintances believe the stony silence a significant stretch given Donohoe’s regular rapid repartee, all his true anam caras know those zipped lips have purpose.
Author O’Donohue stressed the constant need for contemplation in the chaotic Western world. Given his workload, disciple Donohoe needs contemplation.
From 2011-12, Donohoe served as president of the Independent Insurance Agents & Brokers of America (IIABA), also called Big “I”, which represents 23,000 independent insurance agencies and their 300,000 U.S. employees. It’s a big deal. Along with brother-in-law Jay Weir, Donohoe owns the James R. Weir Insurance Agency, which has offices in Mankato and Edina.
Independent insurance agencies represent many insurance companies that offer home, business, life, healthcare, and auto insurance, and employee-benefit and retirement products. Big “I” began in 1896 and has been a voluntary federation of associations active in all 50 states.
Being president of Big “I” was a big job for a big man trying to solve big problems. He has performed his piece only after finding inner peace.
I’ve heard you lived in Cincinnati for four years, from second through sixth grade, literally across the street from arguably the country’s best high school football program, Moeller. They have won four “mythical” national high school championships over the years. You’re a big guy. Did you ever wish you could have stayed in Cincinnati to play for Gerry Faust, who later went on to coach at Notre Dame?
My dad was a professional football player for the Chicago Cardinals, which was before the Bears. When I was growing up in Cincinnati, and if you loved football, Moeller was the place to be. I played there for the Hague Jets, a team sponsored by a car dealership. I was a fullback and big. From second grade through sixth, during football season, I had two-a-day practices. My dad would take me to the athletic club to sweat me down before the weekly weigh in.
Did Gerry Faust recruit you?
Yes. My sister was taking summer school typing classes from Faust. He found out about me and sat on my porch one day and recruited me—as a sixth grader—to play high school football for Moeller. He was a legend there.
Also growing up, I was really good friends with Buddy Bell, who went on to Moeller and would play third base for the Cleveland Indians and Cincinnati Reds. He was our sixth grade football team quarterback. I ran into him once when he was playing professional baseball and asked why he hadn’t played football for Faust. He said Faust wanted him to quit baseball. He wouldn’t. So Faust cut him.
Why leave Cincinnati?
My dad worked for an insurance company. In those days, in order to move up, you spent about four years in each spot on your career path. I was born in Milwaukee, and went to Chicago, Cincinnati, and back to Chicago. After going back to Chicago the second time, my dad didn’t want to move anymore. He was born and had played professional football there.
What did you learn from him?
My dad was hardworking, competitive, and driven to succeed. My mother took care of us. She was a stay-at-home mom, and the disciplinarian, unless things got really bad. I learned from my dad hard work, but more so from him that there were people less fortunate in the world. One cool story about him: on the day he retired at age 56, his company gave him a big bash. Years later, the only thing he remembered about that party was dancing with Mary, the file clerk. He said she had done that job every day for years and no one had paid any attention to her. She had worked harder than all the men making big bucks. My dad said to never forget there are people others ignore, and that my job in life was to pay attention to those people. Looking back, most of the people making the most difference in my life have not been high flyers.
You went on to college.
I went to St. Mary’s in Winona to play basketball. I’m 6’4”. My dad had coached a guy in high school who ended up being an All-American at Northwestern. That guy became a basketball coach at St. Mary’s. It was a perfect match. I played a lot over four years, received a good education, and had a blast.
What was your major?
I earned a psychology degree, which fits into what I do and even more into my work with the Association. The study of people and what makes them tick—that’s what makes us (insurance) people good in our business.
Recently, I watched a TV show about David Kelley, who started in the ‘70s a company called IDEO. He does design work. His company studies human behavior and how people interact with a product and the company makes adjustments to the product based on that interaction. He gets teams together that can include a lawyer, doctor, a computer guy, and a design engineer, for example, and asks them to evaluate new inventions. They figure out what they like and don’t like about a product and suggest design changes. It’s all based on empathy. What an awesome way to go about designing a product. (His company designed the first computer mouse, for example.) I like what he does in terms of collaborative problem solving using people from different professional perspectives.
That’s what working with the Association has done for me. I was exposed to the Association on a national level at age 31 in 1983. I was president of the Minnesota Association. It introduced me to people way different and way smarter than I was. They came from all 50 states. What a little shell we live in here in protected southern Minnesota or even Chicago, where I mostly grew up. From the Association, I learned the Midwest was different from the South, West and Northeast. It was so cool having all these people in the same room for everyone’s betterment.
When I walked into the national meeting the first time, the chairs were arranged in a horseshoe shape with each state representative having their own microphone. The gentleman leading the Association then was from a giant, international insurance agency in Boston. They were talking about things I had never heard.
For one, agents need insurance companies. An independent insurance agent represents more than one insurance company. Depending on where you live, an independent agent can have difficulty getting contracts to represent insurance companies. Midwest agents typically don’t have many problems because the Midwest has been a profitable place to do business. But there are parts of the country where the economy hasn’t gone well.
In 1983, I met an insurance agent from West Virginia who had been doing business from her front porch and making about $40,000 in commissions, which wasn’t much to run her business. Because of her geographic location and the amount of business she could offer a company, it was hard for her to attract any company willing to represent her. So she had to write all of her business through the West Virginia Insurance Pool, which normally is a dumping ground for unprofitable-type risks. I met her at the (national) Association meeting and we started talking about her market.
I knew the Association should have the clout to give a dues-paying member—just like I was—some insurance companies so she could compete. The Association ended up setting up an agency for her to run her business through. She owned it. This gave her access to companies she never had. When I saw her two years later, she began crying. She said she couldn’t thank me enough for helping.
That’s the power of agents forming an association.
When traveling around giving my stump speech as president of Big I, I often mention the first time I went lobbying by myself. I had an appointment with my congressman. Beforehand, I had gone to all the briefing sessions and knew my talking points. But when I went there, I saw 40 postal union members outside the congressman’s door and the congressman was there with TV lights on. I walked around them all and told an aide I had an appointment in five minutes. The aide said the congressman was tied up and I had to meet with another aide, who didn’t know anything about our organization. I left and today remember how terrible the whole experience felt. I felt I couldn’t make a difference being there—as if it were a joke even trying.
Now, a couple times each year, Association members storm the Capitol. We see everyone in Congress and I see Minnesota politicians. We still get the aides, but I understand the process now. If talking about flood or crop insurance or Obamacare, I know everyone else is talking about the same thing. I know we can influence legislation.
How do you differentiate yourself and your cause to make yourself memorable to members of Congress? You’re only a part-time volunteer lobbyist.
It’s easy because I live in Mankato and I’m a small businessman. I’m not a professional lobbyist. They listen to me. If I come in saying what will happen if they don’t pass flood insurance and the rivers rise, and I want to sell coverage but can’t because the program is closed—they listen. What we (Association members) do often makes a bigger difference than our paid lobbyist—way more.
Let’s talk about other issues. First, joint and several liability. Supposedly, the Minnesota Legislature cleaned that up in 2003, but there is still the issue of the reallocation of uncollectible amounts. That is a big issue for business.
Right. Unfortunately, you can’t say for everybody it’s a good or bad thing. I can say for my own customers, I’m not a big fan of it. I don’t buy into it.
Joint and several liability law enjoins me with the actions of someone else who I may not have had anything to do with or had a small connection. For example, imagine you are in a car accident. The car three ahead of you hits someone, and eventually you are the last car in a chain reaction. Now we have three or four people involved. Really, I had nothing to do with the initial accident. Everybody stopped in front of me. But the way insurance is done, if you rear-end someone, you are probably at fault. So there’s a big lawsuit and I’m included. I really had nothing to do with the accident in the first place. It was the first driver who screwed up. But because I have liability limits that are higher than maybe the other drivers, I get sucked in.
But what happens if all the other drivers in front of you don’t have insurance?
Then I’m the guy taking the hit. It’s not right. Those are things we counsel our customers on. My job as an independent agent is to tell you about joint and several liability law and protect you—to explain how this (reallocation of uncollectible amounts) could affect you. You can’t get that level of personal service and advice by buying the cheapest policy online.
About 20 years ago, Walmart began cutting out the brokers that act as middlemen for food manufacturers. Walmart wanted to cut their pricing by the five percent the brokers were earning. So they pressured manufacturers to deal directly with them. Do you feel or fear the insurance companies you represent could eventually cut you out by going completely online or by going through master brokers?
They could—and it happens. But I represent companies who don’t want that. I don’t work for any company. Nobody tells Mike whom to represent. I have a company we represent coming in to Mankato next week because they believe we aren’t giving them enough volume. I am going to tell them they can go somewhere else for representation. I am able to control whom we do business with. We have a hands-on approach with customers running contrary to what people looking online want.
There’s a quality you can’t quantify in a good independent insurance agent. They are the ones doing everything in the community. They are on the church board, supporting nonprofits, volunteering at schools, and selling hotdogs at high school games. People come to us for reasons you can’t quantify. They trust us. They often come to us with all their problems—not just insurance problems, but everything, including thing going on at home.
What I hear you saying is that insurance, at its core, is a trust industry. When buying insurance, people want to be able to trust the agent selling it.
That’s the crucial distinction between an independent insurance agent and buying online. I wrote an article once about an insurance agent in Elysian. You should have seen his obituary in the newspaper. He wasn’t just an insurance agent—he was integral to just about everything that happened in town. Independent insurance agents have a special quality. They are awesome.
Another issue with the Association has been the medical loss ratio for health insurance. Explain what it is and how it will affect your customers?
The medical loss ratio came out of Obamacare. What it basically says is 80 percent of the premium you pay or the benefits you receive have to go towards coverage. Twenty percent is left for the agent to run the company and pay commissions. Obviously, when you’re in the insurance business and selling health insurance, you want to make money. So the big fear with medical loss ratios is we’re going to get cut out of being able to sell health insurance because we won’t be able to make money doing it.
In Minnesota, it isn’t that big of a problem. We’re still getting paid a commission. Our insurance companies have decided they can work within Obamacare parameters. But if you go to Oklahoma or Mississippi, the agencies that wrote a lot of health insurance are now out of business. Some insurance companies used medical loss ratio as an opportunity to cut out agents. Everyone in the industry has the same concern with the health exchanges being set up under Obamacare. No one knows how agents will fit into the exchange, particularly with health insurance.
An independent agent told me recently if the medical loss ratio changes, he would have to lay off employees.
Absolutely—or get out of the health insurance business altogether. For example, we don’t do Medicare supplements anymore because you had to do a lot of certification work to keep your licenses and we earned only $36 a year flat commission for each customer. Well, you can’t do that for $36 a year unless you have a huge volume. So when that change came, we sold our book. We got out of it because there was not enough commission in the product for us to offer it. I am concerned when our customers, who rely on us for help, end up having to buy products like this online without an informed and emotionally connected person to help them make the right decision.
It’s the same with crop insurance. Our commissions are always at risk when we’re dealing with a government program that can make cuts. We sold our crop insurance book six years ago.
Take me through your career path after St. Mary’s.
In 1974, I got out of school and started selling life insurance to college kids. I hated it right away. My dad always said I was too nice of a guy and didn’t have the killer instinct. I went to the training, thought this particular program was a scam, and said I wasn’t going to do it.
I decided I wanted to sell property/casualty insurance, like my dad. I called on every insurance company in Minneapolis and couldn’t get a job because I didn’t have the experience. My father-in-law wouldn’t hire me for the same reason.
Through connections, I finally accepted a position as a property underwriter with an insurance company contingent on their hiring me for a career training position—when such a position opened. In a career training position, I would spend six months each in four different areas and then pick one of the four for a career.
I sat at that desk for a year, waiting. Then one day, a guy came up and introduced himself as the new trainee in the career training program. He would be working with me for six months, he said. They had given that position to someone else. So I went to my boss and told him that if he would lie to me once, he would lie again. I quit without having another job. That’s when my wife and I came to Mankato. I joined what eventually became the James R. Weir Agency, where I’m at today.
You became involved with the Minnesota Association of Independent Insurance Agents in 1981, and became president in 1983, when you were 31. Most people that age would think more of spending time building a business rather than an association.
You sound like my dad. (Laughter.) At the time, I don’t know why I did it except I was smitten by my experience meeting people in the Association.
How big is James R. Weir Insurance now?
Our revenue is about $1.5 million. When I came to Mankato, our revenues were a quarter of that and we employed more people. Technology has changed our business. The only specialty you could say we have is in servicing many social service and nonprofit clients. My partner Jay has a niche with Catholic convents. With that, we’re licensed in 41 states. He goes once a year to a convention attended by 500 nuns. That fits into our culture well.
What I really like about my job is the variety. Yesterday, in the morning, I was at a robotics plant. In the afternoon, I met with a manufacturer. Earlier today, I was with a painter. Tomorrow, I’m with a municipality. Every day is different. I never get bored. In order to insure a robotics plant, I have to understand robotics. In order to insure a governmental entity, I have to understand how a governmental entity operates. In order to understand a painter, I have to know what kind of paint she uses. Every day, I’m challenged in a different direction. It is fascinating.
You mentioned that working with convents fits your culture. Exactly how?
We stress a high moral and ethical way of doing business. Ethics permeates our culture. I have a sister with a PhD in ethics. If you stay ethical, you don’t have to worry about your business. I’m not here to make a quick buck, but here to take care of customers. If I take care of them, they will pay me a commission for my work.
Through your work with the Association, you have met many well-known people inside the DC beltway. Have you been to the White House?
Yes, and it was awesome. I went there as a regular tourist—meaning I didn’t have lunch with Barack. But one fascinating thing for me—and politically I’m somewhere in the middle—has been getting to know our Minnesota politicians, such as Walz, Klobuchar, and Paulsen. We have some really good politicians.
But go to the South—and it’s different. In my job, I had to do fundraisers. Down South you might see an 80-year-old politician who has been there forever with his hand out asking for contributions. Personally, I’m a huge believer in term limits because the machine forces you to change. Some politicians go with the right intent, but it’s hard to do the right thing if you’re always bucking the tide.
You have been heavily involved in trying to attract the next generation of leaders to your industry.
That’s my hot button issue. The average age of our members is 53. Those people aren’t going to be there forever. Who will take over when they retire? The younger generation doesn’t yet understand what an independent insurance agent does.
What do you mean?
Here’s an example. During the course of my travels I have opportunities to talk to economics clubs at colleges. I usually speak with representatives from brokerage houses and big accounting firms. I always ask to go last. These other guys say if you go with them, you will work in a firm of 250, live in New York, have fun, and earn $85,000 your first year.
Then I speak. I tell students I probably make more money than the other speakers. I have never missed any of my kids’ games. I’ve never missed a school play. I can do my job with a telephone and a laptop anywhere in the world. Why not go back to your hometown where things are more comfortable and less expensive and where you aren’t going to kill yourself with stress and bumper-to-bumper traffic?
Many kids don’t understand what we do. You can be in the insurance business and be an accountant, in IT, in marketing, sales or an underwriter at a desk. There are all kinds of advancement possibilities because 60 percent of insurance company employees are over age 45.
We have two openings here I’m trying to fill with younger people. I have had job descriptions posted at all the universities near here and haven’t heard from anyone.
My job leading the Association was to come up with a plan for the industry. Insurance companies are very involved getting the word out. If we don’t get the younger generation involved, what will happen is the independent agents in smaller towns around Mankato, for example, will retire and no one will take their place. Big city companies will do all their business, and that will affect smaller towns.
Shifting buying habits have forced changes in your industry.
Almost 75 percent of people buying insurance for cars and homes shop on the Internet. What we as Association members have to do is increase our search engine optimization and explain what makes us different from online companies. People make the world go around. I believe eventually all this technology will backfire. We were put on the earth to take care of each other and interact.
But you have a whole generation of people growing up that didn’t grow up with your philosophy. Will your industry even exist in 30 years?
My son came to listen to my speech once. I talked to the audience about being active in the community. My son said I had a helluva speech, but it was a bunch of baloney. He said his generation buys insurance online. I told him I knew that.
What I do will exist in 30 years because enough people will realize they need personal help from people they trust. All it will take for many of these younger people is buying the cheapest health insurance online and finding out they still have a huge hospital bill. It may take my son having a bad accident before he figures out he should have listened to his old man about the higher limits. He’ll come back because he needs someone he trusts to talk about it. A consultative—not a sales approach—helps people trust you.
Our Association has 23,000 agencies and 300,000 members. We have developed something called the Consumer Agent Portal (CAP), which uses the number of our agents to raise us up in search engines. So if every independent agent optimizes their websites to point to one spot, a person searching for car insurance, for example, will find the local independent agent right up there with the direct writer agents.
I was told once Mankato was one of the most insured cities in the nation.
It is. The other interesting thing is business here doesn’t change hands easily. People are loyal to their agents. You have to really screw up bad to lose business.
It’s been a fun run. Who thought I would end up in Mankato? It’s a great place. People say I’m 60 and will be retiring. But what am I going to do? When talking with a friend recently considering retirement, he said he was going to learn how to hunt. I don’t want to hunt and I don’t play golf. My work is my hobby. Why quit when I’m doing what I love, can still make a pretty good buck and take care of people, and have such variety?
CONNECT: You say you have a need for reflection.
DONOHOE: It’s important for me to get away to be in my own head. Every year for the last 16, I take four days and go where I can’t talk to anyone—to a Jesuit retreat house north of the Cities. You can’t talk there. A speaker gives you something to think about, and you walk around thinking about what has been said.
I also try scheduling time in my day when I can get away from distractions to reflect on what has happened. That really helps me grow as a person—and that’s what we’re all here for.
CONNECT: Do you have a favorite book?
DONOHOE: Anam Cara is a book of Celtic wisdom. It’s part poetry, philosophy, and psychology. It’s a tough read. It talks about soul friends and how you run into these people during the course of your life.
Getting to know you: Mike Donohoe
Born: Whitefish Bay, Wisconsin, August 20, 1952.
Education: Lake Forest (Ill.) High School, 1970; St. Mary’s University, 1974.
Family: wife, Mary; children, Katy, Gina, Meghan, and Patrick.
THE ESSENTIALS: James R. Weir Insurance Agency
Owners: Mike Donohoe and Jay Weir
Address: 208 North Broad, Mankato, MN 56001