Michigan-based insurer specializes in manufacturers, contractors; derives 65% of its business from "Partners for Success" agencies
By Phil Zinkewicz
Farmington Hills, Michigan, is the corporate headquarters for Amerisure Mutual Insurance Company, whose history spans nearly a century.
It has often been said: "You can't go home again." But that's not necessarily true. Sometimes, it's not only possible to return to your roots, but also it makes good business sense.
Here are the roots we're talking about. Ninety years ago, a Detroit company, then called The Michigan Workmen's Compensation Mutual Insurance Co., was formed by the Michigan Manufacturers Association in partnership with a group of Michigan manufacturing companies. Initially, the company concentrated on workers compensation business. Detroit was its home for 81 years, with the company's corporate offices located in the Penobscot Building, then the Cadillac Square Building and later the "Mutual Building" on West Adams. Today, that company is called Amerisure Mutual Insurance Company and its headquarters are in Farmington Hills, Michigan.
During the course of its history, Amerisure expanded into directions other than its original intent--automotive coverage, for example. In 1926, Amerisure became the first insurer to issue an auto insurance policy, including personal accident for drivers. Through the years, the company also added touring bureau services, boiler and machinery, life, fire and group auto insurance.
By 1939, the company was licensed to do business in seven states, and by 1954 it was licensed in all 50 states. As a result, numerous branch offices opened in key cities across the country, including: New York; Lansing, Michigan; St. Louis, Missouri; and St. Petersburg, Florida. Today, Amerisure operates 10 Core Service Centers across the Midwest and South and does business in 14 states.
Like most American companies, Amerisure's growth was affected by world events and the U.S. economy. Business slowed during World War II, when 20% of the company's employees joined the armed services. Later, the Korean Conflict and periodic economic downturns had similar effects. However, despite some difficult years, the company continued to prosper and expand through the 1980s.
Nevertheless, in the 1980s and 1990s, Amerisure instituted strategic changes--changes that would bring the company back to its roots. "We decided to emphasize our core vision as a provider of workers compensation insurance and related business coverages," says Richard Russell, president and CEO of Amerisure. "In the 1980s, Amerisure shifted its focus from a direct sales force to independent insurance agents. Then in the 1990s, we began eliminating our personal insurance lines. This was the prelude to our strategy that became known as Partners for Success® (PFS), formalized in 1997," he says.
"Our agents can look to Amerisure to make good on our promise to provide a stable environment."
-- Richard Russell
President/CEO of Amerisure
Russell maintains that the PFS program is now the backbone of the company's growth. He says that qualifying independent agencies must meet stringent financial and performance standards, as well as demonstrate a commitment to Amerisure and the PFS strategy. In return, Amerisure provides a range of consulting services and other business benefits, he adds.
"We want to work with agents who excel in the areas in which we want to do business," says Russell, those areas being primarily manufacturing and contracting businesses. "We have longstanding strategic partnerships with several manufacturing and business trade organizations, whose members qualify for Amerisure group programs. In recent years, we have reduced our agency force from about 500 to only 150 select franchise agencies. But even with that reduction in numbers, we have grown our agency business overall. Today Amerisure has 630 corporate and field employees, located in its Farmington Hills, Michigan, headquarters and across
10 core service centers in the Midwest and Southern United States. This year, we project our third consecutive year of double-digit growth, exceeding
$300 million in surplus and
$1.3 billion in assets," says Russell.
The Amerisure CEO maintains that the company's PFS program is at the core of its overall Power of Three strategy, "a strong and dynamic partnership between policyholders, Partners for Success agencies and Amerisure employees." He points out that, while the company's direct written premiums in 2001 grew in excess of 25%, the growth rate of its PFS agencies was 34%. "Our PFS business now represents over 65% of all premiums," Russell says.
While growing at this rate, the company also managed to reduce its combined ratio from 113 in 2000, to 108 at year end 2001.
Russell says that Amerisure prides itself on being a stable market for its PFS agents and policyholders even during these hard market times. "The impact of September 11, coupled with the industry's poor underwriting performance during the soft market years, has caused many insurers to become more restrictive in their risk appetite," he says. "Our agents can look to Amerisure to make good on our promise to provide a stable environment. We saw a heavy influx of business in the final quarter of 2001, and anticipate that growth accelerating in 2002. Thus, our capital will be used to support premium growth at a faster rate than we anticipated. Our sound financial position gives us the financial strength to support these needs."
As for its policyholders, Russell says that Amerisure continues to provide "a quality market at a fair price." He adds that Amerisure has not changed its risk profile and continues to be an open market in its target market areas, manufacturing and contracting business. He allows that the company has increased rates but that, with its better-than-industry loss experience, over time the company's need for rate increases will be less than the industry's.
"Customer surveys tell us that our efforts have delivered value to our policyholders," notes Russell. "Our industry-best claims service incorporates responsive claims handling, thorough investigation of all suspicious claims, and constant cost containment vigilance."
Russell insists that one of the company's greatest strengths is its mutual organization structure. "Our policyholders control our direction and, thus, we are driven by their needs. This enables us to take a long-term view of our business, enabling us to position ourselves for opportunities such as those available to us in today's market," he says.
Because of its concentration on the manufacturing and contracting industries, Russell says that Amerisure takes particular pride in its efforts in the area of risk management and safety. The company's loss control department publishes a periodic publication called Safety News, in which such subjects as OSHA work rules, ergonomic-related work injuries and premises evacuation are addressed.
That last area, premises evacuation, is particularly important these days with concerns over terrorist attacks. Amerisure's loss control department offers its agents and policyholders what should be the basic elements of any evacuation plan. They include:
* Requirements for all doors, stairways and exits to be clearly labeled inside the building. Floor plans with "nearest exit" indicators should also be included.
* Complete roster of employees including full names, home addresses, home phone numbers and whom to contact in case of an emergency.
* List of employees trained to perform first aid.
* Frequency of evacuation drills and procedures to review and update the evacuation plans.
* Methods for training new employees on evacuation techniques.
* Procedures for alerting employees of the evacuation, and reporting the emergency to the proper authorities.
* Process for assisting disabled employees and visitors out of the building.
* Designation of a gathering area for use after vacating the building, and method to account for employees.
Russell says that these kinds of safety and loss control measures are essential in saving lives and in keeping claims costs down. "We offer these tools and other safety tips to our valued agents and their clients so that the three-way partnership is effective for all parties," he says.
Randy Phelps, vice president of the Grand Rapids, Michigan-based Universal Insurance Services, Inc., a premier partner agency that produces substantial business for Amerisure, has nothing but good things to say about Amerisure. He says that, especially in these difficult market times, Amerisure has demonstrated that they "truly do partner with their select producers."
He continues: "There are a good many insurance companies out there in the marketplace that say they partner with their agency force, but then when times get tough, they're gone. But Amerisure has demonstrated time and again that they will stay the course even in tough times. The company leaders, the employees and the producers really do work as a team."
Phelps also believes that Amerisure has made a sound decision regarding getting back to its roots. "We all do a good job at what we know best. And, Amerisure knows the manufacturing and contracting industry cold. Capitalizing on their strengths is a sound business decision," Phelps says.
"We do tons of business with Amerisure," says Phelps. "And the reason is that we truly believe we are an important part of its strategy for success." *
For more information:
Amerisure
Web site: www.amerisure.com