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$100 million plan: Holmes Murphy branches out in bid to double sales in five years


Earlier this summer at the Iowa Games, Doug Reichardt broke away early in the 52-mile cycling race and held on to win with two other cyclists, despite a fierce counterattack from some of the state’s most prominent riders.

Reichardt called the win a “lucky break” that was aided by efforts from younger cyclists. Riders who competed that day said the 48-year-old chairman and chief executive of West Des Moines-based insurance brokerage Holmes Murphy & Associates Inc. has an unusual amount of determination and a strong sense of teamwork.

“He’s a total animal,” said Marc Hollander, one of the riders who crossed the finish line with Reichardt.

Reichardt, a former University of Iowa quarterback whose newest love is the adrenaline rich sport of kite surfing, applies his intensity and drive at Holmes Murphy, where he became chairman in 1994. Since then, the company has added four new offices to the two it previously had. Sales have tripled during his eight-year tenure.

Like his experience at the Iowa Games, teamwork is largely responsible for the 70-year-old company’s recent growth, Reichardt said. With help from President Jim Swift and Nick Henderson, who is the company’s chief financial officer and chief operating officer, Holmes Murphy is on track to surpass $50 million in sales this year. Reichardt wants the firm, which is owned by its 350 employees, to double its sales to $100 million by 2007.

The company is benefiting largely from customers who are looking to Holmes Murphy for help in lowering their insurance premiums, which over the past year have begun rising after years of declines.

Holmes Murphy counts among its customers companies such as Gordmans Inc., Continental Western Group and Des Moines University Osteopathic Medical Center. It currently ranks as one of the 35 biggest insurance brokers in the United States and is striving to move into the top 10 in five years.

To get there, Reichardt is planning both acquisitions and expansion to new cities. In addition to its headquarters, the company currently has operations in Sioux Falls, S.D., Omaha, Cedar Rapids, Dallas and Peoria, Ill.

“We have to have the courage to expand geographically,” he said.

Kansas City is one place that is being considered as a next step for the company, he said.

Recently, the company made a small but visible step. On Nov. 1, the company took over the lease of the former Equitable of Iowa building on Westown Parkway in West Des Moines and planted its own sign out front.

Three years ago, Holmes Murphy occupied two floors. Now, it fills nearly all of the four-story building.

Helping companies find property and casualty insurance generates about 52 percent of Holmes Murphy’s revenues, according to Michele Hanna, the company’s head of marketing. The second-biggest part of Holmes Murphy is life and benefit-related insurance, which accounts for about 22 percent of sales. Both of those tasks fall under the company’s Employer Benefits Services Ltd. unit.

The remainder of the company’s sales are produced by three new companies that Holmes Murphy has started over the last half decade.

The first, Innovative Captive Strategies, helps companies, either on their own or in small groups, take care of their insurance needs by setting aside money themselves, in essence becoming their own insurers. The idea is designed to attract companies that typically pay more in insurance premiums than they realize in claims.

Creative Risk Solutions helps companies better manage risk and find ways to reduce losses throughout an organization, such as suggestions for a construction company that could help it reduce the number of workers who get hurt on the job. Select Benefit Administrators, known as a third-party administrator, manages health insurance claims for other companies.

Technology, too, plays a large role in Reichardt’s vision for Holmes Murphy. A product called Business Solver, which lets users download more than 250 types of documents, such as forms for insurance claims, was started in 1998. The product has yet to turn a profit, though Reichardt is hopeful it will become profitable within two years.

The Web site, designed for businesses with fewer than 50 employees that can’t afford to hire human resource professionals to track changes in federal and state laws, currently gets 300,000 hits each month, he said.

Reichardt has a soft spot for children and community service. He is chairman of the Iowa Games’ board of directors. Two weeks ago, he was the subject of a roasting by family friend and real estate developer Marvin Pomerantz at a March of Dimes fund raising dinner. He is leading efforts to raise money for the Des Moines Menace soccer stadium.

He and his wife, Debbie, have two children who are now in their 20s. The couple are currently serving as mentors to a local at-risk teenager, whom they recently took to Disneyland for a four-day trip after he earned straight A’s at school.

“I’ve seen what a difference people can make in a one-on-one environment,” he said.

He believes so strongly in the effectiveness of one-on-one coaching that Reichardt personally oversees training of each new employee, as well as the class of interns that Holmes Murphy takes in each summer. Last summer, the company had 19 interns and gave job offers to two of them. Reichardt, who was once a Holmes Murphy intern himself, checks in on them frequently.

The reason is simple, he said. Sales drive any company. He wants to make sure that sales are done well.

“Nothing starts in business without sales,” he said. “If an employee isn’t in sales, they need to be in a position that supports sales. They don’t teach you that in schools.”  

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