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

“Here I was 19 years old and the four of us moved from Lyndhurst, N.J., which was one square mile with 25,000 people, to Terre 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 took him off the beaten path.

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

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

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

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

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

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

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

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

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

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

He laughs as he talks about it. “Here I'm pretty much on the street and during all this time in retrospect the one thing I never did was sold a piece of business for myself. To my early days—even at MetLife—once I became a manager the concept was you didn't sell for yourself. You sold for others and trained others, so I really did not have a book of business myself.”

As he wrestled with this professional epiphany, he tripped right over fate's crooked foot again. What was supposed to be a routine out-patient procedure turned into a staph infection, which grew very serious very quickly. The hospital staff had to put him on life 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,” Schifano explains with none of the gravity you might expect from such a recollection.

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

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

“I found it to be a perfect spot for me to basically put my shingle out and start over again. I realized you're not in control of everything when you go through something [like that]. I said let me just go back and not worry about the 800 people that used to work for me at different points and worry about if there was enough toilet paper in the ladies room and go out and just start over and build 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 hearing about this economic recovery and nobody's really seeing it at street 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 tougher than it is right now. I just think I've not seen where the economy is changed to any great length in anything that I deal with from the businesses that I'm involved with or the people I interact with day-to-day. Health care reform has everybody wondering what's gonna happen. I think you have a pretty big tendency of “do nothing until we see what happens.” But the market our industry sells to is shrinking also. So I don't see anything dramatically improving and I don't know if you're hearing any different.

BS: I think the larger groups are doing just fine and they talk about how business is great, but I think the guys more on the individual and smaller group side aren't seeing a great business right now, that's for sure.

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

BS: How is the association business different from your standard private employer as far as selling to that group and maintaining it as a broker?

TS: Well, the one thing you do have is a different rating methodology that's in place for these groups in the state of Kentucky. I mean the first big question would be if somebody told me they had an association, I would want to know what the rating methodology is for the groups. In Kentucky your particular association will be rated on the experience of your association. So the importance of keeping a healthy solid, well-underwritten pool is important. And then once you do, you get the ability to bring other products into them—we're looking at some long-term care that can be endorsed with an association also. So I think bringing some other products to them that can be offered to the association as an added benefit and then counting on their allegiance to buy products through the association and then getting the rate—the correct rating methodology—also helps quite a bit.

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

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

 BS: Oh without a doubt.

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

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

TS: Absolutely. I think that my relationships with the carriers I've had are strong. Look at some of the clients I have. There are a lot of people I've done business with over the years. It's just the way I run my life. Relationships are very important. We try to find some creative ways to interact with clients. We're working out a partnership right now. It's in infantile stages but it's one of the largest pharmacy benefit managers in the nation and they have a relatively little bit of exposure to the general market. So we've put together a mini-med product with another partner that hooks Kroger's PBM into the BCS mini-med. Now the mini-med … my timing wasn't so perfect.

BS: Yeah, they're taking a beating these days.

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

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

TS: Good question. I met with a group of about 20 brokers who were in association plans today, and so their perspective was how does the association plan survive against what could the market be with the buying co-ops. And that's a good question. I mean these co-ops come about in the small group to get a challenge to show a value to the small group customers. I think above certain lives there's a lot of value we still bring as brokers to earn what we do for the services we give. One of the reasons I picked Niece Lukins, not only having known John [Niece] for years, but for some of the services that we provide. We have an entire in-house underwriting staff that does some very sophisticated financial analysis working with clients and projecting future costs. We've done a lot of work with health care reform and trying to show clients what the cost of the law is at that particular date. I mean for a while there we'd have to do that. I think personal service is very important in getting people involved in their decisions. We have a commitment as everybody does. You hear [about] the wellness piece but also [about] employers who are interested and actually trying to employ wellness into their organizations. Neace Lukens has taken an aggressive stance there within our organization. So we could talk to them about John Neace has a wellness coordinator that works with us. We get 'Granny's Tip' every day and so I think added services whether it's a wellness, whether it's a financial analysis, whether it's making decisions. One thing I think we're overlooking is how much help a small employer needs. I spent a lot of time with Blue Cross with small employers because in Kentucky the average size case when I was chief marketing officer was seven employee's lives. So if that's the market you are in you have to have a strategy that approaches and deals with these people. And I think this perception that this government agency is gonna be able to satisfy those needs I don't think is realistic.

This week my doctor called me, and I have her group and she has a group of four people. Now, no agency is staffed to appropriately compensate an agent to service a case of four. But that doesn't mean that person doesn't want it. And I think there's a challenge there—maybe it becomes some boutique-type broker outfit that will give the people a service they want. And going through the health care system we all know what service is like. I know a hospital can almost kill you. Having been there and going in for something routine, not everybody handled health care system the same way today and you have seen boutique-type doctors come where you pay a fee because that's the kind of service that you want. I think once these buying co-ops get cleared out, then there would be customers willing to pay an agent to service their five-life group and not be interested in going elsewhere. It's kind of hard to predict what you don't know what's gonna be there.