Marketing
The "Z" factor
The Hanover's Zuraitis builds a "culture of execution" that puts agents first
By Elisabeth Boone, CPCU
When your surname begins with a “z,” one thing’s for sure: You’re going to be the last person in any given line. Bringing up the rear alphabetically, however, hasn’t stopped The Hanover Insurance Group’s Marita Zuraitis from moving her company toward the head of the line in several important categories. Since joining The Hanover as president of its property/casualty companies in 2004, she has taken a company that had a plain vanilla product lineup, fragmented field management, and declining policy counts and revitalized it into a highly respected super-regional carrier.
Zuraitis has spent the last four years building a strong, competent field organization that delivers on its promises to agents. She’s also spearheaded the design of a product portfolio that offers total-account solutions in personal lines and small to mid-market commercial business. And Zuraitis has overseen an investment in technology that has significantly improved The Hanover’s service and operating platform.
Zuraitis came to The Hanover from St. Paul Travelers, where she had served as president and chief executive officer of St. Paul’s commercial lines division. She previously held management positions with USF&G, which merged with St. Paul in 1998, and Aetna Life & Casualty. Today she serves as president of The Hanover’s property/casualty companies: The Hanover Insurance Company and Citizens Insurance Company of America.
Given her strong background with large national carriers, what appealed to Zuraitis about joining The Hanover, a considerably smaller regional organization that was striving to surmount some significant challenges?
A big draw, Zuraitis explains, was the opportunity to work with Fred Eppinger, who in 2003 left The Hartford to become president and chief executive officer of The Hanover Insurance Group. (See “Back in the Game,” Rough Notes May 2004.)
“For me, joining The Hanover was an opportunity to help lead in building a truly special company,” Zuraitis says. “I believed in Fred’s vision to create a world-class company around the needs of independent agents. I also believed that at a smaller company, I would be able to make a much larger impact.”
As the result of her 10 years in management with Aetna Life & Casualty, Zuraitis says, “I got rooted in a ‘big company’ culture as far as underwriting expertise and my grasp of pure insurance concepts.”
Subsequently, she continues, “Spending time at USF&G and St. Paul, which did not operate on the same scale as Aetna, gave me some clarity about bringing together the best attributes of both models. That experience has been very useful in helping us achieve our objectives at The Hanover.”
To Zuraitis, bigger is not necessarily better. “It’s not all about size,” she says. “It’s about orientation and your value proposition. What appealed to me was Fred’s vision, and the opportunity to create something special that I really believed was needed in the marketplace. I was excited about executing on that vision, and also about bringing something of my own vision to the table,” Zuraitis says.
Four challenges
In his 2004 interview with Rough Notes, Eppinger identified four key initiatives that The Hanover would pursue in its quest to become a world-class organization: (1) partner with the best agents, (2) provide them innovative products, (3) deliver high-tech, high-touch service, and (4) develop a strong, responsive regional field organization.
“Those clearly were the four things that the company needed to do,” Zuraitis says. “For me, it was about building a talented leadership team and a field organization that would be capable of executing what was a very different and compelling value proposition for agents. That was my biggest challenge, and one that I think we’ve done a very good job of fulfilling,” Zuraitis says. “Without capable individuals in the home office and field, the rest of it would just be talk.”
Since Zuraitis joined The Hanover in 2004, she and Eppinger have combined their considerable strengths and experience to achieve their objectives, with impressive results.
Partner with the best agents. “We know that great agents make great companies, and we are fully committed to the independent agency channel,” Zuraitis declares. “We’re also committed to being the best carrier in the United States for mid-sized agents. We’re partnering with those winning agents to see what they need and how we can make our value proposition more and more robust for them.”
Zuraitis continues, “When you pick the right agents and you sit down with them and figure out who they are, what they need, why they’re growing, and what would help them grow more and faster—and how you continue to earn profits even in softer markets—then you can decide what you buy, how you build, and how you grow as a company.
“This process has paid off,” Zuraitis declares. “In 2007, our closest agent partners grew more than double the industry averages.”
Provide innovative products. “We’ve made significant investments to deliver world-class products, underwriting solutions, and services to help our agent partners grow their businesses and win in both personal and commercial lines,” Zuraitis says. “In personal lines, we’ve built a strong suite of products so we can be a total account writer: auto, homeowners, boats, umbrella, and valuables. We’ve introduced an improved Connections Auto® product. We’ve also launched a new homeowners product, Connections Home®, and we’ve entered into a joint venture that gives us the ability to offer ancillary lines of business.”
In commercial lines, Zuraitis says, The Hanover targets accounts up to $200,000, with a focus on what she calls “our sweet spot”: $25,000 to $100,000. In this market, she says, “We have a broad risk appetite that is supported by top-tier local underwriting talent.”
On the small commercial side, Zuraitis says, “We’ve enhanced our BOP product by adding employment practices liability coverage and miscellaneous professional liability endorsements, and we’ve expanded our appetite for workers compensation. In the middle market, we’ve developed new hospitality and health care programs, and we’ve acquired professional liability capability for small and mid-sized law practices.
“In inland marine and bonds,” Zuraitis continues, “we’ve launched enhanced products like commercial crime, and we’ve created an infra-structure for marine business with specialized underwriters who can work with agents to customize programs. We’ve also added a dedicated claims and loss control team.”
Deliver high-tech, high-touch service. A key factor in agents’ choice of carriers is ease of doing business. The Hanover’s top management realized that improving its performance in this area would be critical to the company’s success.
“We’ve developed a significantly improved service and operating platform,” Zuraitis says, “and we’re providing consistent, reliable delivery on service metrics. We continue to enjoy a high level of claims satisfaction. We’ve also introduced enhancements such as advanced point-of-sale systems and first-call resolution,” she notes
Develop a strong, responsive field organization. Zuraitis took bold steps to address this challenge, which she earlier identified as her top priority.
“To execute on our value proposition to agents, we needed field executives who were not only strong underwriters but who also had practical business sense,” she explains.
As a first step, she says, “We created the positions of regional president and regional vice president. These jobs are very different from the jobs that were here when I came on board. In many cases we needed new capabilities for these positions, so we used our network of contacts to recruit talented people from both national and regional competitors, as well as individuals at The Hanover who possessed those skills.”
Over the past four years, Zuraitis says, “We have assembled one of the best field organizations and senior leadership teams in the business. We have a full complement of local salespeople and underwriters on the ground to make good, informal decisions and to accommodate our growing local presence. And, as we continue to grow, we will continue to build our local resources.”
Agent kudos
High praise for the “new” Hanover comes from Jay Bergstein, executive vice president of Capacity Coverage Company of New Jersey, Inc., an all-lines agency with headquarters in Mahwah, New Jersey, and branch offices in New Jersey and New York. Capacity Coverage consists of nine companies with revenue of about $44 million, and its property/casualty business is 65% commercial lines and 35% personal. Among the firm’s niche markets are trucking, moving and storage, couriers, and surety bonds for school bus companies.
Capacity Coverage began its relationship with The Hanover in mid-2004, just as the insurer was embarking on its transformation mission. “For several years we had been a top agency for St. Paul, so I knew Marita Zuraitis very well,” Bergstein says. “I have very strong relationships throughout the organization on every level, from Marita and Fred to local and regional management. These relationships are very special to us, and we know we’re special to them. That’s why over the past three years, as of December 2007, we have become their largest agent in New Jersey.”
Capacity Coverage places both commercial and personal lines business with The Hanover, Bergstein says, and the insurer also is a market for risks in the agency’s niches like moving and storage and surety bonds for its school bus program.
In terms of The Hanover’s performance in delivering on its promises, Bergstein says, “They did everything they said they’d do. They’ve spent an enormous amount of money on new product development and acquisitions, and they’ve brought on tremendous talent.”
Dynamic duo
For the last four years, Marita Zuraitis and CEO Fred Eppinger have worked as a team to implement their vision of The Hanover as a “super regional” insurer that, as Zuraitis says, “allows us to offer people, products, and services on par with the best national companies, while at the same time providing the local knowledge and responsiveness of the best regional companies.”
Since launching their initiative in 2004, Eppinger says, “We’ve become a significant company, but we’re still a company that you can get your hands around. We’re a large, effective insurance company, and at the same time we’re an entrepreneurial organization that has the feel of a small business where individuals can make an extraordinary difference.”
Eppinger describes Zuraitis as “the soul of the place. She was one of the first people I went after, because I needed somebody who could help me create a company that would combine the best of what regional companies do and the best of what national companies do. I also wanted Marita on board because I needed somebody who could enjoy kind of a wild ride. We’re not just trying to be okay; we’re trying to do something extraordinary, and Marita has the experience, the personality, and the drive to make that happen.”
In the four years since she and Eppinger joined forces, Zuraitis says, “We’ve laid a solid foundation for our vision, and I think we have the fundamentals right. As a group, The Hanover now ranks among the top 40 property and casualty insurers in the United States, with revenue of approximately $2.6 billion. Our strong performance has been recognized by Wall Street and investors; we have positive rating outlooks from A.M. Best and Standard & Poor’s, and Moody’s upgraded our ratings earlier this year.”
It’s clear that the “Z factor” has been a powerful force in transforming a once troubled insurer, but Zuraitis says she and the company are just warming up. “We’re proud of what we’ve achieved so far,” she says, “but you haven’t seen anything yet!”
For more information:
The Hanover Insurance Group
Web site: www.hanover.com