Joseph W. McCartin Insurance, Inc., a family-owned independent insurance agency based in Beltsville, Maryland, recently acquired Statland& Katz, a Silver Spring-based insurance agency with seven employees, creating a new operation featuring approximately twenty-five full-time professionals. We recently spoke to the company’s President, Mike McCartin, to learn the compelling reasons behind this transaction, the advantages of working with an independent insurance agency and the current climate of the insurance industry. Founded in 1967, the agency also operates a satellite office in Centreville, Maryland.Joseph W. McCartin offers a comprehensive range of insurance products suited for automobile, home, life and business coverage, including liability and workers compensation.

Q. Please describe the current insurance climate, as compared with five or ten years ago.

A. This business changes constantly based on a variety of factors, specifically on the commercial side which alternates between a hard market and a soft market, as dictated by competition and overall economic conditions. Like many other industries, we were hit hard in the 2008 to 2009 timeframe, but we are in a much better position currently. On the personal side, the insurance business continues to evolve as our independent group competes with mega-insurance entities. It is incumbent for our team to demonstrate the customer-service and quality-oriented advantages that we provide over these big insurance groups.

Q. Describe the key reasons for the recent acquisition of Statland& Katz.

A. Most importantly, when insurance agencies grow to a certain size, it is challenging to expand organically based on the number of employees and ability to service additional accounts. One solution is to hire many new employees, but that course of action has its inherent risks. To achieve sustained growth, it is significantly easier to purchase an existing entity. Statland& Katz served as a respected competitor for many years, and this pooling of clients and resources forms the foundation of a powerful regional company that is better positioned to service the insurance needs of businesses and individuals. Internally, this action provides tremendous opportunities to our existing staff to move up or around the organization, which is something you always want to offer. From our clients’ perspective, we achieve economies of scale and the ability to offer additional services.

Q. What advantages do local, independent agencies have over the national entities?

A. For starters, we understand the market, are involved in the community and are accessible. And, without exclusive ties to one particular insurance group, we are not beholden to the products, pricing or practices of any one company. Rather, we remain in the preferred position to shop quotes and coverage policies for our clients, to better satisfy their requirements.

Q. What are the primary challenges you face daily?

A. We are not unlike most other businesses in that excellent and loyal employees mean everything. Situations change. People retire, express the desire to exit the industry or move on based on a myriad of reasons. Absolutely, people. In many cases, we compete with the federal government for great employees.

Q. Compare the strength of this marketplace with others around the country.

A. Our proximity to Washington, D.C. keeps us fairly insulated from adverse economic conditions based on the tremendous driver in the federal government. Companies want to be in this area based on the availability of government contracts. While we felt the negative effects of 2007 and 2008 in this market, the slowdown was tremendously milder than what was occurring in markets throughout the country. Most people in this region either work for or with the government. We also have great business diversity and fantastic colleges and universities.

Greg Weiner is a Member in PK Law and Co-Chairs the firm’s Corporate and Real Estate Group. He represents emerging and established businesses in a wide range of industries including technology, health care (including urgent care, home healthcare, assisting living and nursing homes), restaurants, breweries, education, construction and professional services (including physician practice groups, accountants, attorneys, software and IT companies and design firms). He assists them with general business matters, as well as employment contracts, wage and hour and overtime issues, independent contractor versus employee classification, real estate needs and financing. Greg recently assisted Monument City Brewing Company with its Series A round of funding and regularly assists similar types of businesses in their venture capital / private placement transactions.

Pessin Katz Law, P.A. (PK Law) is the eleventh largest law firm in the Baltimore area and has been serving clients for close to thirty years. PK Law maintains full-service offices in Towson, Columbia, and Bel Air and is comprised of more than 60 lawyers, paralegals and law clerks. Practice areas include corporate law, real estate, zoning, education law, estate planning, elder law, labor and employment, litigation, insurance law and medical malpractice defense. PK Law Co-Founding Member David Pessin has represented Joseph McCartin and the McCartin family in estate and business planning for the past two decades. Gregory Weiner, PK Law Member, managed the acquisition transaction on behalf of Joseph W. McCartin.

For additional information, visit www.PKLaw.com Contact Greg Weiner at gweiner@pklaw.com