Employee Stock Option Programs January 2024

Christensen Group Insurance – Eden Prairie, Minnesota

January 31, 2024

Christensen Group Insurance

Securing Tomorrow: Christensen Group Insurance’s Legacy of Trust and Innovation

Christensen Group Insurance’s unique blend of employee ownership, client-centric relationships, and forward-thinking strategies is helping to secure its place in the insurance industry.

The insurance and financial security industry is one of the oldest in the world and Christensen Group Insurance has stood the test of time through innovation and reliability. Celebrating over 70 years of service, this Eden Prairie, Minnesota-based firm exemplifies the essence of a seasoned, yet forward-thinking company. Distinguished as the largest independent brokerage in Minnesota, Christensen Group’s ethos is deeply rooted in its employee-centric approach.

This innovative spirit is mirrored in the company’s approach to insurance solutions. By blending creative strategies with numerical acumen, Christensen Group tailors its services to the unique stories of its clients, ensuring a future as secure as it is ambitious. The company’s expertise is not just in risk management but in understanding and planning for the distinct needs of businesses and individuals alike.

As Christensen Group commemorates its 72nd anniversary, it does so with a reflection on its enduring legacy — a legacy defined by robust relationships and an unwavering dedication to protecting what matters most to its clients. In a world where change is the only constant, Christensen Group remains a steadfast partner, navigating the complexities of insurance with a personalized, thoughtful approach.

A Legacy of Growth and Innovation

The story of Christensen Group Insurance is not just a narrative of business growth, but a tale of familial legacy, deep-rooted values, and strategic decision-making. This context sets the stage for understanding the company’s unique journey and its choice of an Employee Stock Ownership Plan (ESOP) structure.

Christensen Group Insurance - Eden Prairie, Minnesota

Charles Christensen, President and CFO

Charlie Christensen, current President and CFO, shares an intimate look into the company’s history and its evolution. “My grandpa started the business back in the 50s,” he reminisces, tracing the lineage of leadership from his grandfather, Gene Christensen, to his father, Bruce Christensen, who later expanded the company in the 1980s. “Dad bought it in the ‘80s, added a few partners in the ‘90s, and grew it nicely before selling it to the ESOP in 2005. I joined in 2012, it’s been a fun journey so far.”

The decision to opt for an ESOP over private equity was deliberate and thoughtful. With about 210 employees and offices extending from Minnesota to Kansas City and Austin, Texas, Christensen Group Insurance has always prioritized its people. “When we did the ESOP transaction 17 years ago,” Christensen explains, “two of the partners were seeking a liquidity event. We explored various options, including private equity, but there was a strong conviction against it.”

This decision was influenced by a desire to preserve the company’s culture and avoid outcomes that other agencies faced after selling to private equity or publicly traded brokers. “It wasn’t the outcome we wanted for our employees,” Christensen emphasizes. The ESOP route offered both financial advantages and aligned with the company’s ethos. “Using after-tax dollars to buy out a shareholder is a long runway. But with ESOPs and their tax advantages, we could facilitate an internal sale to our employees more effectively and equitably.”

The ESOP Effect: Aligning Interests and Cultivating Culture

Christensen further elaborates on the transformative impact of the ESOP. “It aligns everybody’s interests,” he asserts. In traditional business structures, stakeholders – customers, vendors, employees, managers, and owners – often have divergent goals. However, Christensen Group’s ESOP model harmonizes these interests.

“Our owners are our employees and managers; they’re one and the same,” Christensen explains, highlighting the unity of purpose within the company. This alignment propels everyone towards a common objective: maximizing organizational excellence. He emphasizes the balance between achieving current performance goals and ensuring the company’s long-term success. “We’re playing the long game here, focusing on creating long-term shareholder value. This approach benefits our customers immensely as every employee, from the receptionist to the CEO, is invested in the company’s success.”

Samantha Olinger, COO

Samantha Olinger, the company’s Chief Operating Officer, notes the unique culture fostered by the ESOP at Christensen Group. She observes a strong sense of ownership among employees, enhancing more than just financial interests; it’s about genuinely caring for the company’s and clients’ long-term success. She notes the supportive and collaborative atmosphere, with the team focused on collective success. This extends beyond client service to internal interactions, encouraging openness and idea sharing. The ESOP model, as described by both Christensen and Olinger, is more than a financial structure; it’s a driver of an empowering culture that results in low employee turnover, with team members deeply committed to shared success.

Navigating the Tides of the Insurance Industry

Although operating in an industry known for its stability and resilience, Christensen Group does not rest on its laurels as it navigates through various economic climates. Christensen discusses the company’s approach to forecasting demand in a mature industry.

“Insurance is pretty recession resilient, not proof, but resilient,” he explains. He distinguishes between different types of insurance products, noting how some, like worker’s compensation, are statutory requirements, while others, like cyber liability insurance, are more discretionary. Despite the mandatory nature of many insurance products, he acknowledges that the industry isn’t immune to economic downturns, citing a 9% decrease during the 2008-2009 recession. However, he points out, “Our best years are okay, our worst years are okay. It’s a steady industry from a revenue forecasting standpoint.”

He also highlights the pivotal role of Christensen Group’s technical sales force in driving the company’s growth. He stresses the importance of recruiting and developing talent that aligns with the company’s culture, underlining the significance of human capital. Acknowledging the current market’s unusual conditions, with low unemployment and stable employer performance, he notes the impact of rising insurance prices and inflation on the industry. Although the brokerage sector is performing well, he maintains a cautious optimism, suggesting the current trend might be compensating for previous lackluster growth, and aware of the cyclical nature of the industry.

Celebrating a Culture of Excellence and Recognition

The accolades and recognition Christensen Group has garnered over the years are not just marks of achievement but also reflect the profound impact of its culture and leadership on its employees. Olinger offers a glimpse into the array of honors the company has received and what they signify about the organization’s ethos.

“We’ve been recognized as the Best Places to Work nationally, in the insurance sector, and locally in Minneapolis-Saint Paul Business Journal,” Olinger shares with evident pride. She also mentions their noteworthy achievement as ESOP of the Year, an honor that speaks volumes about their successful implementation of the employee-ownership model. These accolades, according to Olinger, are a testament to the company’s vibrant team and ownership mentality. “These recognitions are a collective result of our employees feeling that their work and input are valued,” she explains.

Olinger emphasizes the mutual respect and appreciation Christensen Group maintains with its employees, treating them as they deserve. This approach was especially critical during the COVID-19 pandemic, with the team providing exceptional support and care. The company uses surveys to assess internal dynamics and enhance leadership, not just for external recognition. These surveys are vital for responding to the team’s needs and guiding them collectively. While accolades are appreciated, the primary focus is on fostering a supportive, inclusive work environment where every employee feels valued and heard.

Vision for the Future: Growth and Innovation

Bruce Christensen

As Christensen Group looks to the future, its leaders are poised with clear goals and strategies to navigate both the opportunities and challenges that lie ahead. This forward-looking perspective is crucial for understanding the company’s aspirations and the roadmap they intend to follow.

Christensen shares his vision for the company in the coming years, focusing on the distinct advantage provided by their ESOP structure. “It’s a huge differentiator in recruiting,” he states, emphasizing the company’s ability to attract top talent. This competitive edge is vital for growth, especially considering the massive generational turnover within the insurance industry. “We need to excel at bringing new people into the business, training them, and developing their careers,” he explains. This focus on talent acquisition and development is not just about maintaining the status quo but is pivotal for scaling the business.

Looking at geographic expansion, Christensen sees significant potential. “We’re pretty excited about our growth opportunities in Kansas City and Austin, Texas,” he reveals, noting these markets’ capacity for outpacing growth in Minneapolis. This expansion poses new organizational challenges but also opens doors to new opportunities.

Olinger echoes Christensen’s sentiments and adds her perspective on operational efficiencies. “Our focus for the next few years will be on automation,” she highlights. The goal is to streamline administrative processes, allowing employees to focus more on client engagement and their core competencies. “Automating low-level administrative work is key to enhancing our client experience,” she asserts. This strategic move towards automation is aimed not just at improving efficiency but also at providing better service and creating a more rewarding work environment for their employees.

The Core of Christensen Group: Relationships and Expertise

In a world where insurance is not just a necessity but a critical component of personal and business security, Christensen Group stands out with its unique approach to client relationships and industry expertise. Olinger emphasizes the importance of relationships in their business approach.

“Our relationships drive everything we do,” she states. It’s not merely about providing insurance policies; it’s about becoming partners in the client’s journey. “We want to understand the story behind each business owner or individual, build trust, and protect what matters most to them,” she explains.

This approach goes beyond transactional interactions; it’s about understanding and aligning with clients’ strategies and aspirations. “If you want something unique and different, come talk to us,” Olinger invites. She proudly notes the company’s high employee retention, highlighting how this stability translates into enduring, caring relationships with clients.

Christensen adds his perspective on the increasing complexity of the insurance business. “There’s a wide gap between high and low performing agents in this industry,” he observes. In his view, the value of insurance is realized through the quality of counsel and advice provided by the agent. “As the world becomes more complicated, highly skilled and specialized agents are becoming more crucial,” he explains. This need for expertise and nuanced understanding is where Christensen Group excels, navigating a complex world for their clients with skill and care.