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Calculated Risk: Former Murphy Insurance agents write own policy with new firm

With 18 years of insurance experience between them, Brock Ryan and Ben Shortreed were rising among the ranks at Murphy Insurance Group, comfortable in their roles and earning good incomes.

Then they did the unthinkable. They left to launch their own independent insurance agency, AVID Risk Solutions, Inc. on April 1.

Ryan, 35, AVID Risk president, had worked up to a partner position at Murphy, where, he says, he was a top agent for 10 of his 11 years. Leaving, he admitted, was a hard decision, describing both Steve and Pat Murphy as father figures. "People probably thought I was a lifer," Ryan said. "We left a relationship that was really a small family business, where we often spent more time there than with our families. It feels like a marriage that broke up."

But the marriage was changing. Steve Murphy had already announced he'd be retiring later in the year, and the protégés, who'd been throwing pie-in-the-sky ideas around for years, saw what they perceived as an opportunity. "There's a lot of volatility in the insurance market right now," Ryan said. "It's all about perpetuation. There are a lot of aging relationships out there, so customers might be looking."

They devised a business plan and had a friend design the website. Financing, they said, went particularly smoothly. "I was surprised how much support we had," said the 33-year-old Shortreed, the firm's executive vice president.

They approached two banks first, but felt put off. "It seemed like they wanted my first born and a lot of paperwork," Shortreed said, "and then we met with Starion Financial, and they made a quick, in-house decision. They believed in us."

The business was ultimately funded through a combination of their personal contributions and a line of credit.

AVID Risk Solutions was created in eight weeks, start to finish. It now shares Beltline office space with an Ameriprise office, and AVID's company attorney has an office in the basement. But while the building's tenants are quickly developing a symbiotic relationship, they are not in any way a partnership. "We are professional resources to each other," Ryan explained, adding that an accounting firm and bank under the same roof would complete their shared vision of a one-stop shop.

A two-year non-compete clause keeps them from pursuing the clients they had at Murphy Insurance, but they are allowed to solicit other Murphy customers. "We've raised quite a buzz," Ryan admitted. "I was a pretty good producer and had built up a pretty large book of business. To walk away is pretty rare. I think there are a lot of people who would be afraid to do what we did."

AVID Risk Solutions offers all types of business insurance – workers' comp, general liability, and commercial – plus personal auto, home, and life insurance. It does not offer health insurance.

With five other employees, the company is already growing. "We want to be at no debt and have a positive cash flow in 18 months," Ryan said. "Our goal is for $1 million of revenue by the end of 2013, which is extremely aggressive.

"In insurance, you can make a good income and get very comfortable, but that's not good enough for us," said Ryan. "I always had that entrepreneurial spirit. We're looking beyond Madison. We have some other ideas."

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