Steve DeCarlo made AmWINS what it is today, the largest insurance wholesaler in the United States. In May, at age 60, he walked away from the business, proving there’s life after work and making money. In so doing, he paved the way for others at the firm to move up and continue his legacy. Founding editor Rick Pullen sat down with Steve just before his retirement to discuss his remarkable career and views on how to become a 150-year-old firm when you haven’t even reached 20 yet. —Editor

Rick Pullen: You’re facing retirement. That’s scary for a lot of people.
Steve DeCarlo: People ask what are you going to do? I don’t know. I want to sit down and think about some things. I want to do a lot, like go to Antarctica or Australia.

Part of it is, for me, a transition to allow the team to take the ball. I’m not bashful, and I tend to, you know, try to walk into rooms and be quiet—which is not a skill I obviously have. People look at me. They’re like, OK, he’s got to start talking soon. And I’m like, “Stop looking at me. I don’t want to talk, but you’re forcing me to talk.” And so I hope part of retirement will be: stop looking at me.

Skip Cooper is stepping down as president at the same time. My joke has been I’ll become executive chairman, which none of us at AmWINS knows what that means. I’m told “executive” means I get paid. “Chairman” means I don’t have to do any work, which is exciting.

Skip is vice chairman. So both of us are going to help the business. You know, be available, work on projects, work on things that we have passion about. Skip on products. Me on process. But we’re letting the new team—we’re letting the team that’s ready—Scott Purviance, James Drinkwater and Ben Sloop—run the firm. They say yes or no. I’m no longer the CEO.

Scott has been with me 17 years. As I say, I’m tired of my stories. I can’t imagine what it feels like for him. When he can say them by heart—it’s painful to watch.
If you’re trying to become 150-year firm, I don’t get 150 years as CEO. I’ve had a good 17 or 18. Scott’ll have 12 or 15. Then the next CEO and the next and the next. And that’s how you get to be 150 years old. If I tried to go for 40 years, the people behind me would have to leave. And we’ve seen that in many insurance companies—where people have built great executive teams, but they leave to become bosses at other firms and do very well.

So I think of transition as the right thing for the business.

Why do you think so many companies don’t do what you’re doing?
You really want the truth? You’ve got to be careful with the truth. Look, insurance executives, as they retire, want to play golf and on the company’s dime. And I just never wanted to be that guy. I’ve watched a lot of people who just didn’t go home. And I kept thinking, “Why don’t you?” It’s the team that needs to take the firm forward. And for me, personally, it’s my wife and my kids and time to do things that I want to do.

Are they married to their job?
They’re married to relationships. I mean, you see the social aspect of the business. People love their relationships. You’re so invested in them. We always say insurance is a relationship business. I think the social aspect of the industry has lent itself to the difficulty people feel with transitioning to Phase Three of their life. And I think it’s a problem.

Do you see this in other industries or is it just prevalent in insurance because of the social aspect?
It’s hard for me to say. One of my young bucks said to me, “Steve, everybody on Wall Street leaves at 60.” I was like, “Oh, well, that’s not insurance. Everybody here leaves a lot later than that.”

I think in mature firms, there’s a sense that people move on. I think in entrepreneurial firms, the entrepreneur stays a long time. I think AmWINS is an entrepreneurial firm. I don’t think it’s organized to be—as we refer to it—a kingdom. It’s not mine.

But you built it.
And others. I mean, it wasn’t by myself. We have more than 600 employee shareholders now. I would think Marty Hughes [Hub International] would say the same thing. It wasn’t him. It was a team. I think the team, you know, there’s always a team aspect to anything, right? You’re a player. You’re a player-coach. You’re a coach. Sometimes you need to stop coaching and admit that’s the journey you’re on.

I’d like to think I set down some markers, early. No corporate planes, just 5% corporate overhead. Now the marker is, you don’t get to hang out. You have to turn it over to the next generation. So that’s a marker that puts pressure on people after I’m gone.

The first of anything is typically watched. I’ve been the first in this firm. But, of course, I’ve learned from quite a few people. You know, my mentor, the guy that trained me, retired at 55. I watched that. He’s still alive and kicking and enjoys life. But he didn’t have to stay in the business to prove his self-worth.

You’re setting the precedent.
To me it’s, like, literally, we have sayings: free soda, free water, free coffee. It’s going to be hard for the next guy to stop that, right? It’s hard for an executive to come in and go, “We don’t believe in free soda, anymore.” You know, you’re going to look like a jackass, right?

As I’ve said to Scott, “I won’t do this transition well, but you’ll do it better. Because you’ll be able to watch where I make mistakes. You know, one of the great things about building AmWINS is—and I tell this to the new hires and acquisition prospects coming in—don’t apologize for the mistakes we made. We didn’t know. We made a lot of mistakes. But also don’t apologize for making changes. Because the firm I started with had $20 million in revenue. You guys are starting with $1 billion of revenue.

Don’t look back and go, Oh, we’ve always done it that way. We always did it that way because we were tiny. One of my challenges years ago was I had to worry about making payroll. Today, they have to worry about what to do with a billion in cash over the next five years. Those are different strategies.

What is your sense of satisfaction of building this firm?
I don’t think in terms of satisfaction. I don’t think it’s built. I think the foundation is solid. I think we dug a good hole and then we probably built a good foundation. I think there’s satisfaction in safe jobs. I think there’s satisfaction in knowing people can count on us to provide not only their salary, their bonuses, their benefits, but hopefully for their children. I think there’s pride in that.

We just started a foundation for employees’ children. I never thought AmWINS would start a foundation where we’re going to help support the employees’ children in their college endeavors. I just didn’t see that as what we would end up doing. It wasn’t a dream in the early years. But it evolved as we grew the company.

With the tight labor market, do you see the need for different benefits like that? To attract talent?
I don’t know that the labor market has changed my point of view on that. I’ve always had that view.

Has it always been tough to get really great, skilled people?
No, no.

Or keep them?
I’ve never found that a challenge. I mean, to some degree people self-select in terms of their motivation. I can’t honestly say I can go in the inner being of a human and make them motivated. People that are motivated have an opportunity, I think, in insurance, because it’s so broad, to take that motivation places.

But going back to your question about the job market. I’ve always thought that, when the employee came to work for us, if they left us, we failed them. I’ve never felt there was always a stress about hiring. There was always a stress about providing the best tools or the best training or the best environment.

When I was part of Royal Specialty Underwriting (RSUI) in Atlanta, it was shocking when people left. I mean, in the 10 years I was there, if three people left I thought it was unbelievably bad. I’ve come to accept it a little better at AmWINS because we have 4,500 employees. The number-one thing you offer is culture. That took 20 years to learn. You don’t learn that as a 20-year-old. At that age, you think you got it figured out.

My favorite saying is: You don’t know anything until you’re 35, and then you have 30 more years to work. It tends to slow 28-year-olds down a little bit. I think the pressure to provide not only quality benefits but training—the environment, the culture, the tools—is so important.

How did you discover insurance?
My wife is actually an insurance grad. Her dad was in the insurance industry. My dad was a guidance director at our high school. I get out of college…

Studied?
Accounting. I’d like to say finance, but that would be a lie. I went to East Tennessee State University, because my mother and father went there, trying to think I could become a golfer. Found out day one that I couldn’t, because I met a guy that ended up being a pro golfer. And then I graduated, went back to New Jersey and saw an ad in the paper—The Star Ledger—a famous New Jersey newspaper. It said, “Internal Auditor.”

I called up, and the man said the job was filled. I went, “Oh, that’s disappointing.” And he said, “What was your last name, again?” And I said DeCarlo. “Are you from South Plainfield [New Jersey]?” he asked. And I said, “Yes, I am.” He says, “Is your father Mike DeCarlo, the guidance director?” And I go, “Yes, sir, he is.” He goes, “Well, I went to South Plainfield High School. We’ve got room for you.”

Luck. That was luck.

I got a job offer from Crum & Forster in 1980. The first question I asked was: did anyone go to college for this? And they were like, “No.” I was like, “Awesome.” Because that was just how fast you could learn it and grasp the concepts. For the next four years, I was flying around on corporate planes, meeting some great people.

In your twenties?
In my twenties.

So this is kind of a big deal.
You’re telling me! I’m getting on Charlie Fox, which is what they called C&F’s plane, because its tail sign was CF something. I got to meet some guys that I’ve known in the industry a long, long time. We worked together on the audit staff.

Basically, I got to go around asking questions. My father said, “What do you do for a living?” I said, “Well, Monday through Thursday I ask a guy, ‘Why do you do what you do? How do you do what you do? Should you do what you do?’ And, you know, he’s got 30 years’ experience and I’ve got 30 weeks’. And on Friday we sit in a meeting room and I tell him what he’s doing wrong. And that’s what an auditor does.”

I learned that data and ultimately information mattered. That was how you kept score. And then, of course, we would get to go to dinner with different entrepreneurs, and, boy, they could tell stories. And I learned if you could tell stories, maybe you could get ahead in insurance. And so I took my gift of BS and my pedigree for numbers and kind of combined the two.

You got hooked from the beginning?
I got hooked from the beginning. First, the job allowed me to travel. And then I was lucky enough that, after four years of traveling the country learning, I got a chance to go into E&S in Atlanta.

I went to work for a man that was their CFO and he was a little more old school than rambunctious Steve. And then they brought in a guy named Steve Smith, in the summer of ’84, and he became my mentor. He had been at Crum & Forster for years, knew what a whippersnapper looked like and knew how to tell me to be quiet and shut up and do your job. He really let me blossom in the years I worked for him.

What was your job?
I ended up being a CFO. He said to me, “We’re going out and investigating all of these things I’m now responsible for. I want you to organize and tell me how you want to do them. And if the guys in New Jersey buy what you say, I’ll make you CFO.”

Steve Smith and I flew around the U.S., worked on this strategy. I wrote it up, presented it to the team in New Jersey and they said that makes a lot of sense. Go do it.

I found out years later the New Jersey team was really busy that day and, when Steve and I visited, they just wanted us to go back to Atlanta. And so by saying, “Yeah, that sounds really good,” they were placating us. It made my career.

Steve made me the CFO. He was doing so well they offered him more responsibility. But they made the mistake of saying he had to relocate to New Jersey. He decided to move on. I followed him.

We started RSUI, which today is a significant E&S insurance company. Steve Smith and Jim Dixon started the firm, and I was their first hire. I had spent four years in New Jersey and four years in Atlanta at Crum & Forster. When I resigned, they all thought I was crazy. But I trusted Steve and Jim.

My dad said, “Are you sure you want to quit this job?” I told him I can always get a job as an accountant, but I’m not sure I might get an opportunity to go start a firm with two guys.

So off we went. It was the first time I got to start a firm.

Are you CFO at this new firm?
Yeah. They hired me to be CFO. Because there was only three of us, so they said, “OK, you run HR, you run technology, you run finance and go build all the back-office stuff.”

I referred to myself as “stuff guy.” You know, they did sales and underwriting, and I did stuff. If stuff meant, you know, ordering orange juice for the breakfast, I ordered orange juice for the breakfast. We were entrepreneurs. We started RSUI in the summer of ’88 with the help of Royal Insurance, and it was a really big success and did very, very well. Then we sold it five or six years later to Royal. Then I became an employee at Royal.

Would it be fair to say it’s the first time you had money?
That was the first time I had money. That was the Aha! moment. Yeah. Equity matters. So, I owned part of the firm. Obviously not the majority, as Steve and Jim owned the majority. And they should. They started the business.

Did it change how you looked at your future?
When we sold the business quickly, after five years, I was like, “What do you mean, we’re selling? I don’t want to sell. I’m in my early thirties. I don’t want to sell.” But I also realized a lot of money was made in those five or six years and Steve and Jim wanted to protect it. They wanted to diversify. It was my first lesson in why entrepreneurs sometimes sell businesses because they have to de-risk themselves.

I think that’s what you see today. You see a lot of people love being entrepreneurial, but they can get harmed if they lose an account. They can get harmed if they lose an employee. So I think people de-risk. Steve and Jim, I think, decided it made sense to de-risk. But as soon as we were no longer owners, I felt like I was an employee. It wasn’t like Royal was treating us bad, but it was different.

Royal gave us a five-year non-compete, non-solicit. And I stayed three years and then moved to Charlotte for the last two. I thought it was in the best interest of my family in the sense that Atlanta was so big. And then ultimately, when I left Royal after those two years to join this firm, it was because I had some money in the bank and I could take the risk.

So what Steve Smith did for me in my 20s and 30s allowed me to take the ultimate risk to get to AmWINS.

AmWINS started in ’98 as a dot com. I started in December 2000. They had a two-year head start on me. They had already spent all $25 million of the private equity guys’ money. We were losing $800,000 a month. We were in no man’s land.

They bought six or seven companies and were basically a dot com. They were going to disintermediate retailers.

How big was the firm back then?
We were $20 million, and we were losing $10 million a year. I joined in December 2000 and resigned in February of 2001. So they said, “What would you do to fix it?”

So I re-upped and went to work for them in New York. The chairman was still in his big office. I had a lawyer, I had a CFO and I was the CEO, and the office was tiny with a lot of technology guys running around. There was a guy named Hawk, and I was like, “Does he have a last name?” They were like, “No. Just Hawk.” I said, “So, like Madonna? Like Sting? Hawk?” We paid him like $550 an hour, so I guess he was a rock star.

I went in, and they asked what office would I like? I said, I’ll just take this cubicle because I’m going to be travelling back and forth from Charlotte. I don’t need an office. When I finally laid off 40 people in the office, I asked the last guy leaving: when did you figure out I wasn’t going to move to New York? He said, I don’t know, three months ago. I said, well, Day 1, when I took a cubicle, that was probably a pretty good hint that I wasn’t moving.

It wasn’t like they had done anything wrong. It was just a bad strategy.

I emailed some of the owners who sold us their firms and asked how would you describe the firm? One guy wrote back: Going up a down escalator. Another wrote: Throw it all away and start again. I will buy my firm back.

What was wrong?
They were trying to disintermediate something they never worked in. How do you eliminate something you don’t understand?

The bottom line was the companies they bought made profits. It was the 40 people in the home office that were draining off all of those profits. That’s all the home office did. It’s one of the reasons today we’re only allowed to spend 5% of revenue in our Charlotte headquarters.

It’s why I used to drive to Greensboro to fly to New York. Because we had no money—none. My most famous trip was when I drove to Greensboro in a rental car, flew back to Charlotte where I transferred to a Dallas flight to drive to Shreveport, Louisiana. I couldn’t afford to fly there direct. And I try to make sure all the employees know that story.

How did you turn it around?
I told a board meeting in late August of ’01, “We’re not losing $800,000 a month anymore.”

Then board member Scott Flamm says, “Steve, anybody can cut costs. Can you build the business?”

He was right. Anybody can cut costs. I had no idea. So I hired Scott Purviance, now our new CEO, who has great finance skills. And I hired Angela Higbea, who is our controller. Still with us. We had to see if we could build something. We had no idea what.

But I grew up in E&S wholesaling. Not as a wholesaler, but they were my clients. And I thought really hard about what I could do in distribution. All the firms that we bought before me were wholesale-type firms: benefits and MGAs. No E&S brokers.

After 9/11, the world was obviously about to change drastically. But we don’t understand it. We have no money. None. The private equity guys aren’t going to give us any more money. Nobody will give us a loan. I flew to Geneva, Switzerland, to raise money, and the guy didn’t show up for lunch. That was a long trip.

I arrive at the Geneva Airport. I wait in this long line at the train station. Finally pay my money. I wait for the train. Awesome. I find out Geneva is 12 minutes away. I waited an hour and a half for that damn train. I took the train, and here I am walking my suitcase to my hotel and the guy never showed up for lunch!

I went all around the United States trying to raise money. We had nothing. We were struggling.

Then the people side of the business started to take over. I got a call from a guy in L.A. named Joe DeBriyn. One day he called and said, “I want to introduce you to Ernie Telford at MTS—Matukas, Telford and Sullivan.” I had never met Ernie, but I knew two of his partners.

He says, “Ernie’s trying to do what you’re trying to do, and I think you guys should merge.” So we met in New York for dinner. Ernie had his firm, MTS. He had started a wholesale broker in New York, called New Century Global. Now he was in L.A., New York, and his partners were brokers. Ernie was going into the big leagues, and Joe thought we should put our firms together.

You still weren’t AmWINS at the time.
I’m afraid to even tell you what it was called. It’s so embarrassing. It was called America Financial Services. It wasn’t called AmWINS. AmWINS, I made up on the fly. I came up with American Wholesale Insurance Group, or AWIG. I was like, AWIG? I got to come up with a dot com. AWIG.com. That sucks. So I was like, how about AmWINS, Am – American. W – Wholesale. Ins – Insurance. AmWINS. It was like Verizon, a completely made-up word.

I knew nobody had the name. I didn’t have to trademark it. I could get it on Google or GoDaddy, and people started calling us AmWINS. So we changed the name officially to AmWINS in ’06.

Now private equity is not going to give us any money, and we get a call from GE Capital. GE says, “Do you mind if we come to Charlotte,” and we just started laughing. We were like, “You’re coming to see us?”

He came to see us and wanted to loan us some money. And we’re like, “What? Are you crazy?” He goes, “No, I think the distribution game is interesting.” So he gave us our first loan.

Now we’re in debt. We’ve got $30 million in debt, so we started buying people we knew. People that for whatever reason trusted me enough they took my cash. We started to move into property-casualty. We got a firm in New York, a firm in Dallas. We actually bought five firms altogether.

So you were a $40 million firm when you started buying other firms, and now you’ve got $30 million to build with?
Right. We bought Seaboard Underwriters. We bought Woodus K. Humphrey— all these are million-dollar purchases.

What’s your strategy? Why pick one company over another?
I didn’t have a lot of choices. Remember, these are my friends calling. Seaboard was a friend. Woodus Humphrey was a friend.

Later, I called up Woodus. I said, “Woodus, what do you think about that million dollars of cash in your bank account?” He goes, “Oh, Steve, I don’t care about that. But I like my million in stock.”

“Why is that, Woodus?” I asked.

“Now I own everything you’re doing.”

That taught me about diversification.

Another friend had broken away and started his own business and came to me for advice on accounting systems. Tom Spinner asked, “Can you help us buy an accounting package?” So I got to talking to him.

Long story, but I end up buying a firm in New Jersey called PRS, Property Risk Services, and Tom was very well known. And now people are like, “What’s going on? Where did DeCarlo get $30 million?”

And then Eliot Spitzer. I should send him flowers when I retire. [DeCarlo retired in May. He did not send flowers.] Eliot shows up to investigate retailers, and they sell their wholesalers. So we ended up buying Willis’s Stewart Smith.

Joe Plumeri [of Willis] said, “You can buy it for $100 million,” and then he asked the famous question, “Do you have $100 million?” I was like, “Yeah, we’ll get back you.” Because we didn’t have $100 million. The private equity guy wasn’t going to give us any more money, so we had to borrow.

We went to New York and did a presentation. We explained wholesale broking to them, explained why we’re needed in the marketplace. Told them they should lend us $100 million, and they did. I literally got in a cab, and I said to Scott, “Can you believe these guys just loaned us $100 million?”

They look pretty smart now.
They do—now. So there it was. We were now really in debt because now we owe $130 million.

We now have 13 offices. Everybody is like, “Oh, my gosh, what’s going on?” The word in the industry was, “Oh, yeah, that DeCarlo, he’s deep in debt.”

I kept trying to explain to the laymen. You own a house? You get a mortgage? Did they vet you to make sure you could pay back the mortgage? That’s what they do on Wall Street. They gave me $130 million. They believed I could pay it back.

Suddenly, you’re attractive.
Then I get a call from Brian Golson. He says he went to high school in Charlotte. Graduated from UNC. Went to Harvard, and now he’s a private-equity guy.

It turns out he tried to buy Stewart Smith from Willis, but he didn’t really understand the industry. And after I bought it, he said, “I’ll go buy DeCarlo.”

Eventually Brian bought us in September of ’05. Now, we’re in the bigger leagues. Private equity group No. 1 put in that $25 million, got out $100 million. So they went away. Brian came in and really helped the business. Made us smarter, made us more aggressive, gave us the ability to raise money better. He stays with us until 2012. Really helps the business. In the first nine years, we were at $273 million of revenue. Over the next nine years, we’ve done seven hundred and whatever it takes to get to $1 billion annually.

The reason other wholesalers struggled in the end was they were run by Sales Guy. Sales Guy has no respect for finance. It’s all about Finance Guy raising capital and buying firms.

In 2012, Brian had his seven-year itch. He left, and we brought in New Mountain Capital. We were valued at $1.3 billion.

When we got New Mountain, we started to have a lot of success, and we purchased some good firms, partnered with some good firms. And, frankly, we then said, “Well, let’s go have cups of coffee with the next generation. Let’s get ready for 2019.” We began that process, and we met a Canadian pension fund. They came on board in 2015 buying out half of New Mountain’s interest and providing our employee shareholders with a liquidity opportunity that provided them close to $300 million.

Then in ’16 we brought in a firm called Dragoneer. And they partnered with us, to buy out New Mountain’s remaining stake. The ownership today is 38% employees, 33% Dragoneer and 29% Canadian pensioners.

Today the firm is $1 billion of revenue. When we started aggregating these guys, no wholesaler had ever had more than $100 million. Simple math: the firm is valued at $3.3 billion.

Where do you rank, today, as far as size among wholesalers?
OK, I try not to say it. We’re the biggest.