Chris Hallgren and Greg Gurbacki, Owners of Associated Underwriters, Omaha, Nebraska
A Vision for the Future
As most childhood friends do, Chris Hallgren and Greg Gurbacki often pictured their lives 20 years down the road — still best friends, but business partners — as well working for an independent insurance company called Associated Underwriters, founded by Chris’s father, Rich Hallgren, in 1979 in Omaha, Nebraska. Chris imagined himself as president of Associated Underwriters while Greg envisioned himself as the bookkeeper.
Chris and Greg’s paths split for a time following high school; Chris attended the University of Nebraska in pursuit of a finance degree, while Greg received a mechanic certification and became the manager of an auto repair shop. Frustrated with the long hours and lack of compensation, Greg sought advice from his best friend’s father.
“Rich has been an invaluable advisor to me over the years,” said Greg. “He taught me the fundamentals of the insurance industry as well as the importance of client relationships.”
After four years apart, Chris was armed with a finance degree, and Greg with a license to sell insurance. Their paths merged again at Associated Underwriters. It wasn’t long before Greg was one of the top sales agents, and Chris was promoted to treasurer.
“I took Rich’s advice to cherish every client relationships I had,” said Greg. “And made it an everyday practice to meet their needs,” said Greg.
Greg had taken Rich’s advice and ran with it. While building an initial portfolio of clients Greg picked up a job on the side working for a dairy company. Through this work, he met the CEO of the company that distributed the company’s products. The CEO became one of Greg’s first clients, purchasing insurance for his trucks. By fostering this relationship with the CEO, and by becoming acquainted with the company’s managers and drivers, this first customer miraculously multiplied into 150 loyal customers.
Unlike the challenging, physical labor of a career in the auto repair business, Greg found working in the insurance business was extremely enjoyable, and rewarding. He treasured meeting new people each day, learning their personal stories, and providing a necessary service to them. Greg’s success in selling insurance was mirrored by his clients’ successes evident by their growing premiums.
One client who attained outstanding business growth was an independent cable TV repairman from North Dakota, who originally paid a $2,000 annual premium to Greg that provided general liability insurance for his pick-up truck. During the first year, the client struggled to make his payment and was on the verge of bankruptcy. In order to help his client, Greg asked Associated Underwriters to cover his premium payment and offered to hold the client’s check for a week to ensure it was covered. As the client’s business boomed over four years, the client’s premium dramatically rose to $300,000 per year. At the height of his business, the client retired a multi-millionaire. Observing his client’s achievements, and playing a role in that success, encouraged Greg to perpetually augment his portfolio of customers, and improve his client relationships.
Over the next 20 years, Chris and Greg solidified their industry expertise. Chris became a board member at Associated Underwriters and began acquiring company stock. For a time, Greg left the company, at Rich’s recommendation, to gain experience at a larger insurance company. Greg eventually returned to Associated Underwriters, and brought a long list of faithful clients with him.
“Times were good,” said Greg. “Chris and I would joke with Rich about what it would take to convince him to retire, and sell the business to us — but we never took ourselves seriously — we knew we didn’t have the necessary finances.”
Finding a Lender
When the time did come when Rich planned to retire; a national bank in Texas made an offer to purchase the company.
“It was then that we thought seriously about what it would take for Chris and me to get the finances together to buy the company,” said Greg.
Chris wasn’t ready to let go of a business his father had built from the ground up, and Greg, who considered Rich a second father, didn’t want to see the family business sold to a bank. Although the company had an extensive list of long-time clients, and an impressive cash flow, the local banks would not approve a loan based on the company’s lack of tangible assets.
After unsuccessfully pursuing lending options with private individuals and companies, their childhood dream seemed to be slipping away — until they found Aleritas Capital. Immediately, Chris and Greg saw a difference from the local banks that had uniformly turned them down. Aleritas Capital valued the cash flows, business prospects, and extensive list of insurance contracts.
“In our industry, there isn’t anyone else like Aleritas,” said Greg. “We turned over every stone looking for a lender, but Aleritas made it easy. Their understanding for the insurance business sets them apart from other lenders.”
The loan Chris and Greg received allowed them to purchase the outstanding shares of the two main shareholders, Rich, and his business partner.
“We never could have done it without Aleritas,” said Chris. “It wasn’t an easy road, but here we are, 20 years later — best friends and business partners,” said Chris.
Living the Dream
Since gaining full ownership of the company in September 2007, Chris and Greg have increased the company’s productivity, developed a high-growth business plan for 2008, and begun repaying their loan. Although the work days have grown longer and the responsibilities greater as business owners, Chris and Greg contend that nothing could be sweeter than the reward of fulfilling their childhood vision, and becoming co-owners of Associated Underwriters.
Download PDF