Executives of the Yasuda Fire & Marine Insurance Company of America at the company's New York headquarters: George M. Clark, Jr., CPCU (left), vice president of the underwriting department and Lance J. Albright, CPCU, ARM, senior executive vice president.
When East meets West, amazing things can happen. Yasuda Fire & Marine Insurance Company of America, backed by the 100 years' experience of its Japan-based parent company, is moving far beyond its original mandate to become a strong player in the U.S. property/casualty market on behalf of American as well as Japanese clients. Both culturally and procedurally, that's an impressive leap. In this article we'll talk with two senior executives of Yasuda America and learn how this New York-based insurer, with its roots in Japan, is doing what it takes to succeed American style.
Yasuda America was established in 1962 to insure the U.S.-based clients of its parent company, Yasuda Fire & Marine Insurance Company Ltd. of Tokyo, Japan. Yasuda Ltd., the second largest non-life insurer in Japan, is ranked among the top 10 on Standard & Poor's list of the top 100 global business insurers. With some $300 million in assets and a Best's rating of "A," Yasuda America today writes business in all 50 states and has branch offices in Atlanta, Chicago, Los Angeles, and Nashville, as well as facilities in Mexico City and Toronto. The insurer works exclusively with independent agents and the top 10 brokerages and is represented by approximately 300 agents throughout the country. It specializes in writing middle-market commercial accounts in the $50,000 to $500,000 range, and also has the ability to handle sophisticated multistate and multinational accounts that require diverse coverages and alternatives such as self-insured retentions. Among Yasuda's major accounts are Canon, Nissan, and Bridgestone.
Yasuda America writes all the coverages needed by its target market of mid-sized commercial accounts: property/package, general liability, commercial auto, inland marine and ocean marine, umbrella and excess liability, workers compensation, and boiler and machinery. Risks in which the insurer has special expertise are manufacturing, wholesale and retail distributors, processing and service businesses, and commercial real estate.
"We're very much an underwriting company," says George Clark, vice president of Yasuda's New York underwriting department. "Over the years we've developed extraordinary expertise with these types of risks in the Japanese market. We're now using that expertise to gain a foothold in the domestic market." Each of Yasuda America's branches is staffed with underwriters who average more than 10 years of experience, and who are familiar with the market conditions of their particular region. The team of underwriters assigned to an account has the authority and expertise to handle the entire account. Yasuda America describes its underwriters as being flexible, open, and production minded, and willing to work with producers to develop business.
The insurer has a fully staffed ocean and inland marine department in its New York headquarters. "Through Yasuda, Ltd., we have access to a worldwide network of facilities, so we can handle a wide variety of risks, both domestically and globally," Clark notes. "We can develop programs around the world, and we can help agents and brokers with international risks through our network." Adds Lance Albright, senior executive vice president and chief operating officer, "We also have the capability to arrange reverse flows and meet the other needs of multinational risks."
George Clark says Yasuda America is gaining a foothold in the mid-size commercial market in the U.S. by building on its experience with this type of account in the Japanese market.
Responsive and flexible
"We provide a broad spectrum of services not generally offered by companies our size," Clark comments. "And because all of our senior managers are here, we can make decisions quickly when necessary. This gives us the advantage when we compete with the larger insurance companies, because they tend to have more layers of management."
Adds Albright, "We're flexible, and not just on price. Our Japanese clients often make unusual requests. We're willing to work with all of our insureds to give them what they need. We have the same philosophy as our parent: we want to build long-term relationships with our agents, our customers--everyone we do business with."
Yasuda America is definitely a generalist rather than a specialist, Clark emphasizes. "We don't want to limit ourselves to niche markets," he comments. "We look for risks where we can get a fair price and where we can apply our skills in risk management, loss prevention, and claims handling. Our loss control department can provide experts in ergonomics, building services, appraisal, and OSHA compliance; and they have the expertise to conduct extensive risk management surveys for our insureds." Adds Albright: "We have a national network of loss control engineers who can assist our customers using the experience and flexibility we've developed in serving our Japanese clients. We tailor our programs and services to meet our customers' needs--we don't offer any canned products."
Top-notch claims service, Clark points out, "is at the top of the list of things that are important to our parent company. In handling claims, we're very hands-on and have close contact with our insureds. Our claims people travel a lot and meet with our agents and customers face to face. They say we're fast, flexible, and experienced."
"Over the next five years, our goal is to achieve a 50-50 split between Japanese and domestic business."
--Lance Albright, senior executive vice president
Through a wholly-owned subsidiary, Yasuda America offers loss control and claims services on an unbundled basis. The unit can manage high deductibles, self-insured retentions, and other programs for clients that choose to self-insure.
New marketing thrust
As was mentioned earlier, Yasuda America was established to provide insurance for the U.S. operations of its parent company's Japanese clients. More recently the company has begun to focus on increasing the proportion of business it writes for non-Japanese clients. "In 1996 less than 5% of our business was domestic," Clark says. "By the end of 1999, we project it will be 27%. We're not seeking to reduce our percentage of Japanese risks; we want to expand our volume on the domestic side." Says Albright: "We consider this move to be organic as we push to become a more global underwriter. Over the next five years, our goal is to achieve a 50-50 split between Japanese and domestic business."
A key factor--although by no means the only consideration--in this new marketing initiative is the troubled Japanese economy. As a result of this situation, Albright explains, "Japanese companies have drastically cut back on their overseas expansion as they try to get their own houses in order. For us, this means a lot less Japanese-related business in the United States. That's one reason we want to expand our domestic business--and this initiative also fits into our overall strategy of becoming a bigger player in the U.S. market." Adds Clark: "The Japanese economy is going through some of the changes the U.S. economy experienced in the 1980s. We're confident they will recover as we did, and that Japanese companies will resume their overseas expansion."
Building bridges to agents
In line with its goal of building volume in domestic business, Yasuda America is eager to cultivate solid relationships with experienced independent agents. "The majority of our Japanese business is written through alphabet houses, and almost all of our domestic business comes to us from independent agents and smaller regional brokers," Clark explains. "This wasn't done by design," Albright observes. "We originally talked with the alphabet houses about our middle-market business, but then decided to use independents as distributors for our domestic products."
What qualities does Yasuda America seek in an agent, and how does it view its relationships with producers? "We want to build long-term relationships with educated, professional agents," Clark responds. "Relationships are a strong part of the Japanese culture, and we want to carry that value through in our domestic business." Adds Albright: "Relationships drive our business and our corporate philosophy. We don't want relationships that go from quarter to quarter or year to year. We're looking for a serious, long-term commitment with each of our agents."
Yasuda also seeks agents who understand and value the company's expertise in its chosen markets. "We're not a small business BOP market," Clark says. "We write risks worth between $50,000 and $500,000 in premium, and we want agents who will bring us this kind of business. We're looking for agents who want to grow, both in their agencies and with us. They also need to understand the value of the services we provide: underwriting, loss control, risk management, claims." Prospective agents must satisfy stringent criteria with respect to experience, financial stability, and perpetuation planning.
Focus on agent services
As Yasuda expands its independent agent force, plans call for the establishment of an agent advisory council, co-op advertising opportunities, lead generation programs, and other services.
A Web site has been created (www.yasudaamerica.com). The company currently seeks input from agents on an individual basis, asking whether they need programs or coverages that aren't available elsewhere in the market. "We also hold 'agency appreciation' meetings at regional conventions of independent agents' associations," Clark says. "The Big I and PIA have thanked us sincerely for being there."
Yasuda isn't sitting around waiting for independent agents to discover it. Instead, the company is taking the initiative to promote itself, its products and services, and its philosophy to the caliber of agent it believes can most effectively represent it in the domestic marketplace. "We have booths at trade shows and meetings of independent agent associations, RIMS, and other groups," Clark says. "We've developed advertising campaigns targeted to agents, and we make personal visits to those we think would be a good fit with us. We're doing everything we can to get our name out in the independent agent community. We want agents to know who we are and understand how we work."
This strategy appears to be working. "We're the only Japanese-owned company that actively supports the agency system through the Big I and PIA, and through advertising, presence at trade shows, and sponsorships," Clark observes. "We support agents at the national level as well as locally and regionally. We're building interest and support; the association people are getting to know our name; and we're gaining the opportunity to meet with producers and show them what we have to offer."
Adds Albright: "At trade shows, agents comment that we seem to be interested in developing relationships with them. We genuinely take an interest in what they do, and we're pleased that they want to learn more about our products and services. More and more producers are discovering that we have the capability and commitment to handle risks in the domestic marketplace."
Capability and commitment: those two words aptly characterize Yasuda America's approach to the challenges and opportunities of the U.S. property/casualty market. Its traditional Japanese values of loyalty and service combined with thoroughly modern business practices are positioning this determined insurer to move confidently into the 21st century.*
©COPYRIGHT: The Rough Notes Magazine, 1999