NEW YORK -- In one of his last public statements before stepping down as CEO of Philadelphia Insurance Cos. on Jan. 1, Jamie Maguire shared some of the strategies that help set his company apart.
For starters, Maguire, who spoke at the 23rd annual Executive Conference hosted by Ernst & Young and Summit Business Media (parent company of PC360), was justifiably proud of Philly’s decision to stay entirely out of what has become one of the most-troubled lines in the industry: workers’ compensation. The total absence of that coverage on the company’s books gives it a big boost over competitors’ saddled with it.
Another point of distinction for the company: It’s 49.3 percent “hit rate” on binding business that it quotes. Maguire credits Philly’s trademarked “10 Reasons Why” marketing strategy as a key factor in this impressive figure: For each line it writes, the company offers 10 ways in which its coverage is advantageous to insureds. Its special “Bell” endorsements, playing off its home city’s most-famous landmark, are another tactic to help its policies stand out in the crowd (such as offering Key Employee Replacement coverage at no extra cost).
On the distribution question, Philly, like many of its competitors, relies heavily on a network of preferred independent agents. But the company’s own sales force is comprised of licensed agents who can also transact the business. And the company is one of the few to offer direct online quotes for select commercial classes, such as yoga studios.
Looking ahead to 2013, Maguire believes he has left the company in good shape. He expects its recently launched E&S division to become an increasingly important component of the business (currently 99 percent of its business is admitted). He also is sure that more “consolidation is inevitable” and that the “winners”—with the scale to make substantial technology investments—“will benefit from exceptional diagnostic tools” to price and select risks.
On the future-impacting climate-change question, Philadelphia’s enterprise-risk management committee has opined that the world is entering “a completely different weather paradigm” and that it’s crucial that Philadelphia (and all insurers) take the capital-adequacy implications of this into account when reserving.
His farewell advice for his insurance-executive peers? Be willing “to take drastic measures when necessary [in terms of] significant increases in rates and deductibles. And “beware of reaching for yield” when it comes to investment decisions.