Society's top management team: Michael L. Wagner, JD (seated), president and chief executive officer; and James P. Thomas, CPCU, vice president and chief operating officer.
What helps an insurer stand out as uncommon in today's market? How about flexibility, focus, and a keenly developed sense of fun?
Amid the challenges of consolidation, competition, and cost pressures, the need for flexibility and focus is apparent--but the concept of fun would probably have most industry veterans scratching their heads in bafflement. At Society Insurance, however, the connection between insurance and fun is immediate and clear--and often it's the very challenges of surviving and prospering that make it fun to come to work every day at the Fond du Lac, Wisconsin, headquarters of this disciplined and determined regional carrier. To find out how this mix of focus and fun works in practice, we'll talk with Society's two top executives: Michael Wagner, president and chief executive officer and a 31-year veteran of the company; and James Thomas, vice president and chief operating officer, who joined Society in 1997 after working 25 years for a competing company.
What today is known as Society Insurance began its existence in 1915 as the Wisconsin Brotherhood of Threshermen Insurance Company. In 1911 the Wisconsin legislature passed the state's first workers compensation law; and, like other workers, farmers' threshing crews were required to carry the coverage. No carrier, however, was willing to provide the insurance at a reasonable rate, Mike Wagner explains, so the owners and operators of several threshing crews banded together to form their own mutual insurer. In an era when business opportunities for women ranged from insignificant to nonexistent, Wagner comments, it's worth noting that for many years Threshermen Insurance was run by Gracie Lewis, the daughter of one of the founders. "You can talk about the glass ceiling for women in business, but Gracie was the power behind the throne, and she ran the company," Wagner says.
A mission with meaning
What does Society Insurance aim to accomplish in its chosen markets? "Our mission is very simple," Wagner responds: "to sell good products at a fair price with service after the sale--and to have fun while doing so." He elaborates: "It's not that we don't work hard, put in the hours, get the job done--but if it isn't fun, that shows up and creates problems." Adds Thomas: "One of the reasons Mike can state our mission that simply is that because we're a mutual company and don't have stockholders, we aren't caught up in the merger and acquisition activity that has the industry in such turmoil. Without those distractions, we can stick to our knitting: selling insurance and servicing our customers." Sticking to basics can be as simple as having real people answering the phones, Thomas notes. "Think how frustrating it is to deal with an automated phone system, where you go from one recording to the next. You can't reason with those recordings, and they waste your time. When you call us, you get a real human being," he says. "The people who answer our phones are part of our marketing and advertising team, and they're knowledgeable and cordial. You can ask to be put into voice mail if you want, but the choice is yours. We get a lot of compliments--and a lot of business--because we're a little different; we put a human touch on our agent and customer relationships."
Nailing down niches
As a small regional carrier, Society Insurance finds it prudent to focus its marketing efforts on specific classes of business where it has developed significant expertise. "We can't be all things to all people, so we try to be the best at what we do," Wagner explains. "By providing expertise in our niche markets to the agents and policyholders we serve, we develop a high degree of loyalty, and we get new business from people who have heard about what we do." Let's take a look at the insurer's key niche markets and the products it offers to meet their needs.
A key segment of Society's business is custom-designed commercial packages for selected industries. Society also writes BOP coverage for a range of small, Main Street-type businesses.
* Hospitality and taverns
* Restaurant and banquet facilities
* Hotels and innkeepers
* Builders and contractors (independent or general)
* Grocery and convenience stores
* Meat and food processors
* Building and apartment owners
* Cleaning professionals
* Garage businessowners: repair shops, body shops, and other auto service operators
* Water-related businesses: plumbers, well drillers, water bottlers, ice manufacturers, and providers of water softening or septic system installation, service, or sales
Michael L. Wagner, JD, a 31-year veteran of Society Insurance, serves as the company's president and chief executive officer.
Society's product portfolio for these industries includes a number of association programs, many of which are endorsed. "Particularly in the hospitality industry, we've found that relationships are really important, and our relationships with associations have helped us target those markets," Jim Thomas explains. "We have endorsements from a number of associations in Wisconsin and some other states." Among Society's endorsed programs are TRIM®, a specialty package for restaurant and tavern owners that is endorsed by the Tavern League of Wisconsin; INN-SURE®, designed for hotels, motels, resorts, and bed and breakfasts, endorsed by the Wisconsin Innkeepers Association; Food Processors, endorsed by the Wisconsin Association of Meat Processors; and ARC-Apartments, Rentals & Condominiums, endorsed by the Madison (Wisconsin) Area Apartment Association. Society is also endorsed as a work comp carrier, package insurer--or both--by the Wisconsin Restaurant Association, the Illinois Licensed Beverage Association, and the Hotel/Motel Association of Illinois.
Top comp market
Since its founding 85 years ago, Society Insurance has focused on the workers compensation market, unquestionably one of the most difficult and challenging lines of business for property/casualty insurers of all sizes. "We're proud of the fact that we're a workers comp market, and we're willing to write comp not only as part of an account in one of our target markets but on a stand-alone basis as well, which tends to distinguish us from a lot of other carriers," Thomas says. "In comp we pursue a lot of different industries; we're not as niche oriented as we are in our commercial package business, and we write accounts in a wide range of premium volumes." Unlike many competitors, Society doesn't have a minimum premium requirement for workers compensation business. "We've never turned our back on the very small accounts, but we're also able to handle some larger accounts as well, and we write a wide variety of risks on a monoline basis," Thomas explains.
It's no secret that in today's market, workers compensation is an intensely competitive line with respect to both pricing and dividends. How does a small regional carrier like Society stay in the game? "We get a tremendous amount of competition from good local and regional carriers, but the national carriers aren't the factor they once were," Wagner responds. Adds Thomas: "The national companies are going through all kinds of turmoil as the result of consolidation, so they've become less of a competitive factor, and that's helped weed out some of the less responsible competition."
James P. Thomas, CPCU, is Society's vice president and chief operating officer.
The Society "advantage"
How does Society position itself in today's challenging property/casualty environment? "We try to offer a calm harbor in rough waters," Thomas says. "We find our agents relish this stance, and some of them say, 'We don't even have a national company, because we like the stability you bring to the table; we know who we're dealing with, and when we call we get the same person, so we don't have to go back to the beginning every time.' That goes back to our decision to have real people answer our phones. This really is a relationship business. Of course price is a factor, but it's not entirely the deciding factor; it's more about who we are and the reputation we've established. We're not going to be the cheapest alternative, and we're not going to be the most expensive, but we're definitely going to be a player."
As many insurers are discovering, a key to surviving--and thriving--amid the tumult of today's market is to identify and serve specific niches instead of trying to take all comers. This is a lesson Society understands and applies, Thomas asserts. "The markets where we do a lot of business are areas where we've built up a lot of knowledge, expertise, and experience, and have established solid relationships--and these are not traditionally easy segments of the market: workers comp, taverns, restaurants, supermarkets," he points out. "These markets are not a good place for companies to dabble in if they don't know what they're doing. One of our advantages is that we know our niches, and that takes us a long way. We not only understand their coverage requirements; we direct a lot of attention to the claims process, which some of our competitors seem to have forgotten about."
There was no "glass ceiling" at Society's predecessor company; for many years Threshermen's Mutual was run by Grace Lewis, daughter of one of the company's founders.
Adds Wagner, who began his Society career as a claims attorney: "We get a substantial amount of business from agents and clients who appreciate our commitment to the claims function and understand how it works to their benefit. We're willing to try cases, and that's an advantage in getting bigger accounts. In fact, we just wrote our largest monoline workers compensation account, for about $1 million, in part because of our approach to claims. Good claims work saves money, especially on comp cases. We use in-house people to handle claims so we can monitor their work. And we respond to claims promptly. I like to say that if the claim happens today, we'd like it to be investigated yesterday."
Uncommon advertising
When it comes to advertising, people tend to expect much more from big, name-brand insurers than from small regional carriers. It's perhaps not surprising, however, that one of the most sophisticated and successful advertising efforts in the property/casualty industry today is Society Insurance's Uncommon InsuranceSM campaign. Insurance magazines, trade journals for the company's target markets, and consumer publications all carry striking print ads that feature the works of celebrated artists from Vincent Van Gogh to Edward Hopper, each bearing a simple message that links the name Society Insurance with concepts like "Uncommon Value," "Uncommon Stability," "Uncommon Selection," "Uncommon Depth," "Uncommon Clarity," "Uncommon Spirit," and "Uncommon Satisfaction." The rich, deep hues of great works of art combine with bold, compelling messages to identify Society as a company that both understands and embodies its prospects' values.
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Year 2000 initiatives
As a company that maintains an ongoing dialogue with its field force, Society has its finger firmly on the pulse of the agents who distribute its products. Suggestions, requests, and demands are eagerly solicited and warmly welcomed--and acted on. This past spring, for example, the insurer responded to a groundswell of requests from agents and began adding employment practices liability insurance to its commercial package policies. "Once a small business owner finds out what it's like to handle an employee action against his or her firm, the idea of EPLI looks very appealing," Thomas remarks.
Another new initiative, launched in August, is designed to boost Society's personal auto business by attracting desirable new customers. "We spent a considerable amount of time on our personal auto book, concentrating more on profitability than on growth, and we brought it around to a much more favorable position," Thomas explains. "As part of the process, we tried to develop new ways to get the right customers. We created a program called Society RewardsSM, in which we use sophisticated direct marketing and telemarketing techniques, plus Internet support, to find and bind desirable prospects for personal auto. We make the sale, bind the coverage, obtain the initial payment--usually via credit card--then turn around and sell the policy to one of our participating agencies for a nominal charge. The agency owns and services the business, and we pay full commission. The customers we're attracting are less likely to have claims than the average driver, and the plan rewards them with discounts that increase as long as they continue claim free. As far as we know, Society Rewards is the first program of its kind. The agents in the startup phase are really enthusiastic about it, and we're excited about its potential."
Daring to be different
As a small mutual carrier, Society enjoys some advantages over its big-company, competitors--like autonomy and flexibility. "One of the things I think drives us is that we don't feel compelled to follow the crowd; we dare to be different," Thomas observes. "We do things our way. Sometimes that's the same as our competitors; sometimes it's different. We don't mind being different; we don't jump on every latest trend, and we don't measure ourselves against industry benchmarks. Our thinking is, if what we do works for us, who cares whether it scores well on someone else's predetermined benchmark?" Adds Wagner: "We like where we are, and we're excited about where we're going. We're on track to finish the year with premium volume around the mid-$70 million mark, which is up substantially from our 1999 results. We're moving forward with our agents, and we're committed to providing winning products in our target markets. We're not rebels or renegades--but we are somewhat unconventional; I think I'd describe us as reverently iconoclastic." What an apt characterization of the Uncommon Insurer! *
For more information
Society Insurance
150 Camelot Drive, P.O. Box 1029, Fond du Lac, WI 54935-1029
(888) 576-2438
Web site: www.societyinsurance.com