As a wide-eyed freshman in college, still clinging to his teens,Tom Schifano's father packed up his New Jersey family and movedthem to the dusty plains of rural Indiana. His father, a lifelongMetLife guy, jumped at the chance to take a district manager job inthe Midwest.

“Here I was 19 years old and the four of us moved fromLyndhurst, N.J., which was one square mile with 25,000 people, toTerre Haute, Ind.,” Schifano recalls.

A year later, he found himself as a college trainee at MetLife,already following the old man's footsteps. Although his steps tookhim off the beaten path.

“So I was selling to trailer parks at 20 years old, going toschool full-time and that's how I learned the insurance business,”Schifano says. “And the really ironic thing my first death claim Iever had as a salesman was my own mother.

“I'm in the business a year and I needed to win a contest andsold her a $50,000, 10-year decreasing term policy. It was thecheapest thing I could find. And unfortunately one year later shepassed away with breast cancer,” he says.

So there they were, a single father with four kids in TerreHaute, Ind., so what else could he do? He stuck around to help thefamily and landed a seat at the Million Dollar Round Table beforehe even hit 30.

Before long, he naturally got bumped up to management and foundhimself running a branch in Evansville, Ind., where, in less thantwo years, he earned the company's office of the year honor.

That got him bumped up to New York for a while. But around thetime he turned 29, Metlife named Schifano agency vice president forthe state of Kentucky.

“My brothers and sister were still in Indiana but taking overKentucky seemed natural,” Schifano says.

“I was in that job for three years doing very well then MetLifewanted to send me to Florida to take over all of northern Floridafor them. We had one of the leading regions—believe it or not—outof Kentucky for MetLife and they were opening Epcot at the time andthey wanted me to be down there as their spokesperson and run theoperation.”

But fate stepped in again. About that same time, Blue Cross BlueShield of Kentucky hired a new president—who also happened to knowSchifano from their days together at MetLife—and he convinced himto stay in Kentucky and become chief marketing officer of BlueCross Blue Shield of Kentucky.

“I sold maybe one or two what they called employee benefit plansat MetLife. I had no experience. All my background was in personallife insurance and developing training and managing people and theoperation in Kentucky was about 140 people,” he says. “But I tookthe job as a challenge—I stayed in Kentucky and then took over inOctober of '89 with Blue Cross Blue Shield of Kentucky and waschief marketing officer and executive vice president. Looking back,I had a lot of jobs, but I've only worked for three companies in myentire career.”

Several successful years (and a few mergers later), Schifanofinally left Blue Cross—which by then had become Wellpoint—and hedecided to take some time off so he “could decide what I was gonnado when I grew up.”

He laughs as he talks about it. “Here I'm pretty much on thestreet and during all this time in retrospect the one thing I neverdid was sold a piece of business for myself. To my early days—evenat MetLife—once I became a manager the concept was you didn't sellfor yourself. You sold for others and trained others, so I reallydid not have a book of business myself.”

As he wrestled with this professional epiphany, he tripped rightover fate's crooked foot again. What was supposed to be a routineout-patient procedure turned into a staph infection, which grewvery serious very quickly. The hospital staff had to put him onlife support for the better part of a week.

“I was in Minnesota at the time. They had to call my family up.My kids came up, my wife and they thought I wasn't gonna make it.And so that kind of put a lot of thing perspective,” Schifanoexplains with none of the gravity you might expect from such arecollection.

He spent the next 30 days in the hospital, but he did eventuallyrecover.

He left the hospital and joined Neace Lukens, one of the largernational brokerage houses.

“I found it to be a perfect spot for me to basically put myshingle out and start over again. I realized you're not in controlof everything when you go through something [like that]. I said letme just go back and not worry about the 800 people that used towork for me at different points and worry about if there was enoughtoilet paper in the ladies room and go out and just start over andbuild a book of business at 53 years old,” he says.

“And I'm a year and a half in and things are going well.”

Benefits Selling: How is business these days?How are clients—how responsive are they? I mean we keep hearingabout this economic recovery and nobody's really seeing it atstreet level.

Tom Schifano: I would say I haven't seen a time[since I was in the business in 1989] that I felt it was tougherthan it is right now. I just think I've not seen where the economyis changed to any great length in anything that I deal with fromthe businesses that I'm involved with or the people I interact withday-to-day. Health care reform has everybody wondering what's gonnahappen. I think you have a pretty big tendency of “do nothing untilwe see what happens.” But the market our industry sells to isshrinking also. So I don't see anything dramatically improving andI don't know if you're hearing any different.

BS: I think the larger groups aredoing just fine and they talk about how business is great, but Ithink the guys more on the individual and smaller group side aren'tseeing a great business right now, that's for sure.

Tom Schifano: One of my newer clients is theKentucky Society of CPAs. In Kentucky we still do some associationbusiness. We were able to get that group my first year and I haveabout 350 accounting firms throughout the state of Kentucky we arethe broker of record on. And what I've seen in that group over ourfirst year is pretty solid stability in the numbers, not muchgrowth but had a persistency our first year in excess of 90percent, so I would agree with you from the larger groupperspective. The larger groups are pretty steady.

BS: How is the association businessdifferent from your standard private employer as far as selling tothat group and maintaining it as a broker?

TS: Well, the one thing you do have is adifferent rating methodology that's in place for these groups inthe state of Kentucky. I mean the first big question would be ifsomebody told me they had an association, I would want to know whatthe rating methodology is for the groups. In Kentucky yourparticular association will be rated on the experience of yourassociation. So the importance of keeping a healthy solid,well-underwritten pool is important. And then once you do, you getthe ability to bring other products into them—we're looking at somelong-term care that can be endorsed with an association also. So Ithink bringing some other products to them that can be offered tothe association as an added benefit and then counting on theirallegiance to buy products through the association and then gettingthe rate—the correct rating methodology—also helps quite a bit.

BS: So how would you compare whatyou're doing now to your days at MetLife? I've got to think it wassomewhat similar to your actual physical move from New Jersey tothe Midwest. At least from a cultural perspective?

TS: Yeah, it's, in some ways, a lot moresatisfying life in general, though.

 BS: Oh without adoubt.

TS: It certainly puts perspectives in place.You could spend a little more time worrying about yourself, yourfamily, things that are important to you. Then in the time youspend with your clients you're devoted to helping them. During thefirst year it's probably no surprise all my new business, with theexception of a handful, have come from relationships I've builtover the years. So it is a bit of a culture difference getting upin the morning worrying about yourself and what you're doing andyour clients compared to an organization of 50 or 100 salespeoplethat you're concerned about what they're doing and where they'reat.

BS: You touched on relationships.Would you say it's a big part of your success personally?

TS: Absolutely. I think that my relationshipswith the carriers I've had are strong. Look at some of the clientsI have. There are a lot of people I've done business with over theyears. It's just the way I run my life. Relationships are veryimportant. We try to find some creative ways to interact withclients. We're working out a partnership right now. It's ininfantile stages but it's one of the largest pharmacy benefitmanagers in the nation and they have a relatively little bit ofexposure to the general market. So we've put together a mini-medproduct with another partner that hooks Kroger's PBM into the BCSmini-med. Now the mini-med … my timing wasn't so perfect.

BS: Yeah, they're taking a beatingthese days.

TS: We're doing some work there with KFC. Wehave a product we can sell through BCS for them. Some people weknew here with KFC, again that's just getting going. But that wasback to relationships. I knew the people here at Kroger very wellthrough my community involvement and was able to put something likethat together.

BS: Where do you see the broker business going forward from here? How are we gonnasurvive as an industry?

TS: Good question. I met with a group of about20 brokers who were in association plans today, and so theirperspective was how does the association plan survive against whatcould the market be with the buying co-ops. And that's a goodquestion. I mean these co-ops come about in the small group to geta challenge to show a value to the small group customers. I thinkabove certain lives there's a lot of value we still bring asbrokers to earn what we do for the services we give. One of thereasons I picked Niece Lukins, not only having known John [Niece]for years, but for some of the services that we provide. We have anentire in-house underwriting staff that does some verysophisticated financial analysis working with clients andprojecting future costs. We've done a lot of work with health carereform and trying to show clients what the cost of the law is atthat particular date. I mean for a while there we'd have to dothat. I think personal service is very important in getting peopleinvolved in their decisions. We have a commitment as everybodydoes. You hear [about] the wellness piece but also [about]employers who are interested and actually trying to employ wellnessinto their organizations. Neace Lukens has taken an aggressivestance there within our organization. So we could talk to themabout John Neace has a wellness coordinator that works with us. Weget 'Granny's Tip' every day and so I think added services whetherit's a wellness, whether it's a financial analysis, whether it'smaking decisions. One thing I think we're overlooking is how muchhelp a small employer needs. I spent a lot of time with Blue Crosswith small employers because in Kentucky the average size case whenI was chief marketing officer was seven employee's lives. So ifthat's the market you are in you have to have a strategy thatapproaches and deals with these people. And I think this perceptionthat this government agency is gonna be able to satisfy those needsI don't think is realistic.

This week my doctor called me, and I have her group and she hasa group of four people. Now, no agency is staffed to appropriatelycompensate an agent to service a case of four. But that doesn'tmean that person doesn't want it. And I think there's a challengethere—maybe it becomes some boutique-type broker outfit that willgive the people a service they want. And going through the healthcare system we all know what service is like. I know a hospital canalmost kill you. Having been there and going in for somethingroutine, not everybody handled health care system the same waytoday and you have seen boutique-type doctors come where you pay afee because that's the kind of service that you want. I think oncethese buying co-ops get cleared out, then there would be customerswilling to pay an agent to service their five-life group and not beinterested in going elsewhere. It's kind of hard to predict whatyou don't know what's gonna be there.