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The feeling is mutual A proud history and dynamic leadership make The Motorists Insurance Group an agent favorite
By Elisabeth Boone, CPCU
"Whatever is in the independent agent's best interests is in our best interests." Coming from the CEO of a carrier you represent, that's a powerful statement—and surely music to the ears of any producer. Those are the words of David Kaufman, a 25-year veteran of The Motorists Insurance Group, who was elected president and chief executive officer in April of this year. He hit the ground running and shows no sign of slowing his pace as he meets with staffers and producers to share the details of a document he created that lays out a clear 10-year vision for the organization. Not only does Kaufman's document outline the group's values and the behaviors that will direct its future—he actually solicits feedback about his ideas from associates and agents.
Based in Columbus, Ohio, The Motorists Insurance Group is a regional mutual organization composed of 10 companies: Motorists Mutual Insurance Company; Motorists Commercial Mutual Insurance Company; Motorists Life Insurance Company and its affiliate Broad Street Brokerage; MICO Insurance Company; Iowa Mutual Insurance Company and its subsidiary Iowa American Insurance Company; Wilson Mutual Insurance Company; Phenix Mutual Fire Insurance Company; and MCM Agency, a subsidiary of Motorists Commercial Mutual that provides alternative markets for the insurer's independent agents. The Motorists Group is rated A by Best's and operates in 21 states through a sales force of some 5,000 independent agents. On the commercial lines side, the group's "sweet spot" is small to mid-sized accounts. Target classes include auto- and truck-related businesses, contractors, restaurants, light manufacturing, retail and wholesale operations, and self-storage facilities.
Challenge and change Engaging and articulate, Kaufman exudes enthusiasm for his new position and the challenges and opportunities it presents. He clearly enjoys guiding his organization as it pursues an ambitious vision: "to be the best possible choice for policyholders, agents, and associates." The Motorists Insurance Group operates under an affiliation model in which each of its insurance units has its own board of directors that is responsible to the company's policyholders. Within that framework, Kaufman explains, "We market each affiliate's brand individually. I like to say that we want to 'out-local' the national carriers and 'out-national' the local carriers. Each company's responsiveness and familiarity with its local market serve as an engine for growth," he comments. Responsiveness and flexibility are hallmarks of the mutual company structure, Kaufman points out. "Because we're a mutual organization, we don't have to answer to stockholders," he says. "All of our strategies and operational plans are designed around being the best choice for each of our constituencies. Of utmost concern is being financially stable for our policyholders, and we focus on maintaining leverage by being financially conservative." Unlike some insurers, Kaufman remarks, Motorists doesn't believe that profitability is incompatible with paying legitimate claims. "Our goal is to protect our policyholders, so we look for ways to extend coverage instead of trying to find ways to deny claims," he says. "This is one more way we seek to be the best choice for the customer and the agent." Motorists is strongly committed to supporting its associates and providing meaningful career paths. "We try to promote from within whenever possible, and we have professional development plans to help our associates advance to positions of increased responsibility," Kaufman explains. The group has a staff of approximately 1,200, he says, but "we strive to maintain a values-based family environment, and I know every associate by name. The loyalty we earn from treating our employees like the valued partners they are accrues to the benefit of our company and our policyholders."
A vision for the future In developing his vision statement for Motorists' next 10 years, Kaufman says, "I wanted to build on our traditions and successes." The first part of the document identifies three ways in which the organization differentiates itself in the market, and the second part describes the core capabilities required to achieve each differentiation. "The third part of the document defines our culture in 12 foundational principles," Kaufman explains. "Two examples are: We market our products only through independent agents, and we're committed to the mutual organizational structure." Next, Kaufman's document defines five core values and a set of 12 beliefs that every associate needs to embrace. "I then define 19 leadership behaviors that are expected of everyone so that we reflect our organization's beliefs and values," Kaufman continues. "Finally, I define some tools and processes that we will use as we work together in day-to-day operations." Kaufman's comprehensive document is being shared with associates, field representatives, and agents in a series of meetings in which participants are introduced to its principles and processes and are given the opportunity to provide feedback. "Our objective is to achieve clarity of purpose throughout the organization so that we're all using agreed-upon strategies to achieve a set of shared goals," Kaufman says. "This show doesn't have any stars; I don't believe that any of us is as smart as all of us."
Relationships come firstIn underwriting, as in the financial arena, The Motorists Insurance Group is careful and conservative. Grady Campbell Sr., senior vice president of marketing and underwriting, explains the organization's underwriting philosophy and the role independent agents play as first-line underwriters. "At the end of the day, what we're selling is value, trust, and experience," he says. "We offer quality insurance and risk management solutions tailored to the needs of each client. Underlying our offerings is our commitment to underwriting discipline and stability. We're extremely thorough; we pride ourselves on being an underwriting company. We look at a broad array of risks, but if a submission isn't appropriate for us, we'll walk away from it."
Agents play a vital role in Motorists' approach to underwriting, Campbell asserts. "The agent is the first person who meets with the prospect and learns about his or her business," he says. "As such, the agent serves as a front-line underwriter for the district sales manager in his or her territory. The agent's knowledge is useful in developing a customized program of insurance and risk management for the client." Stability in pricing is another key value at Motorists, Kaufman says. "We don't aspire to be the lowest price market; we provide a high-quality value proposition so that agents and policyholders know what to expect from us." Selective and supportive In reaffirming its commitment to distributing its products exclusively through independent agents, The Motorists Insurance Group clearly intends to continue delivering high levels of service and support to these carefully chosen partners. "We're highly selective about the agents we contract with, and we typically bring in no more than 25 new agents each year," Kaufman says. "We're keenly focused on protecting our franchise value, and our relationship with agents is a true partnership based on shared long-term interests."
Motorists supports its agent partners with a strong field organization backed by the home office. "Our field people call on each independent agency and secure the relationship," Kaufman says. "Our district sales managers (DSMs) are authorized underwriters for new commercial lines business, so in essence we take the home office to the agent's doorstep. In addition to holding underwriting authority, our DSMs deliver a broad array of risk management services to our agents' commercial lines clients." Each district sales manager serves between 15 and 30 agencies and is familiar with each agency's market, capabilities, and objectives. Another way in which Motorists supports its agents, Campbell explains, is with programs to help an agency bring a new producer on board. "We also have a CSR development program. These associates play a vital role in our business, and good ones are hard to find," he says. "We also have a perpetuation program to help the son or daughter of an agency principal take over the agency when the principal retires. We extend interest-free loans that are often forgivable. We've been doing this for several years, and it's proved to be an excellent investment with a high success rate," Campbell says. "Providing this kind of support also helps us strengthen our relationship with the agency." Motorists offers a shared services model, Campbell says. "We may bring the son or daughter of an agency owner, a new producer, or a new CSR to our offices for a year of training and education, and we also offer interested home office associates the opportunity to work in an agency," he explains. "Participants on both sides gain a valuable understanding of each other's responsibilities and become more well-rounded professionals."
In an insurance market that seems to be dominated by direct writers that use corny gags to appeal to price shoppers, Motorists believes that its independent agent partners continue to bring significant value to the insurance transaction. "Their coverage and underwriting expertise, their consultative skills, their ability to provide risk management to clients with our support—these capabilities can't be delivered online or over the phone," Kaufman declares. "We embrace modern technology, but it will never replace the independent agent. Insurance truly is a people business, and our people are our greatest strength." For the agents, associates, and policyholders of The Motorists Insurance Group, it's clear that the feeling is mutual. For more information: The Motorists Insurance Group Web site: www.motoristsmutual.com
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