JACKSON — In 1992, Greg Maloney might have grimaced when, as a rookie in the insurance business, he was given a sales lead in the oil and gas industry, a tight-knit circle many folks considered impenetrable. The industry was in the midst of a down cycle, further adding to his challenge. But despite the inauspicious beginnings, Maloney tapped into the oil and gas business, gathered more clients along the way, and now heads Ross & Yerger’s eight-person energy division.
“I started in the oil and gas industry in a down cycle,” said Maloney, 33. “The first account I wrote was, by chance, an oil and gas service contractor. A banker had passed the lead to the rookie insurance guy — me. A lot of the accounts had shrunk because there wasn’t a lot of activity going on in that area. I came in, was very aggressive, and became known as a problem-solver while the competition was sitting on their laurels. I met with the contractor, solved his problem and boom — I had my first account.”
Ross & Yerger encouraged specialization, and Maloney quickly carved a niche in the oil and gas industry.
“Energy divisions in insurance agencies in Mississippi are rare, with more representation in Louisiana and Texas, where the concentration of production is much greater, and there’s not a lot of room for many agencies to specialize because it is a niche market and is difficult to get into,” he said. “From an insurance and risk management standpoint, the oil and gas industry is an incredibly unique and highly-specialized area, contractually, from an exposure and peril standpoint. To have an energy division that exclusively focuses on this specialty gives us a tremendous advantage. Mississippi and Alabama communities don’t have to go to Louisiana or Texas for insurance needs. We have the same expertise and knowledge right here.”
Ross & Yerger’s energy division insures all aspects of the service end of the oil and gas industry, such as drilling, rig work and general services performed on site, Maloney said.
“We insure the working interest owners who provide the funding so projects can be drilled and explored,” he said. “We also insure refineries and the retail marketers, convenience stores and distributors.”
The oil and gas business, a very cyclical industry, is currently experiencing an up cycle, Maloney said.
“When people fill up their cars with gasoline, they’re paying more per gallon now than they did a year ago,” he said. “The demand for oil and gas is high, the supplies are falling, and it’s generated a lot of activity. Oil companies in Mississippi are spending a lot of money to extract gas and oil we have underground and that’s kick started our industry in the last year and a half, particularly the last six to eight months. It’s also been a great tax revenue source for the state, has attracted business, and continues to be a great employer. All of the economic reasons are there and it’s been an exciting time for the oil and gas industry in Mississippi.”
The memory of a swift downturn in the oil business in the mid-1980s is a constant reminder of how quickly the industry can change, Maloney said.
“Worldwide, the price of oil went south and the entire industry worldwide went south,” he said. “The way it affected the Houston oil industry, for example, had ripple effects where a lot of people were hurt, many closed their doors and went bankrupt, but several hung on, downsized and were ready to meet the challenges that came with that downturn. Consequently, they were here when the industry cycled back up again.”
The federal government hasn’t been overly kind to the domestic oil and gas industry with tax incentives and regulations, Maloney said.
“It makes it difficult for the domestic oil and gas producer because the oil industry, controlled by OPEC, is very unpredictable,” he said. “Hopefully now that the demand is higher, the folks on Capitol Hill will see the need to support the local industry and not be so heavily dependent on foreign supply. The Mississippi/Alabama division of the U.S. Oil and Gas Association, primarily a lobbying organization, has worked well with congressmen to create a positive environment for the oil and gas industry. The price of gas is projected to be very, very strong. The short-term outlook for oil and gas in Mississippi is very positive and people in the industry are very excited about it right now. But long term? It’s harder to say.”
Contact MBJ contributing writer Lynne Wilbanks Jeter at email@example.com or (601) 853-3967.