While some insurers that don’t operate on anational scale dislike the “regional” tag being applied to them,Terry Cavanaugh embraces it.

“‘Regional’ is just another way of saying that you’respecialized,” says the president & CEO of Erie Insurance, whichwrites over $4 billion in premiums in the 11 states and theDistrict of Columbia where it does business. “And a lot of biggerinsurers are trying to be ‘specialized’ now.”

Cavanaugh also believes Erie’s size gives it a distinct leg upin what he sees as an increasingly crucial competitivedifferentiator for insurance companies: great customer service,especially the speed and personal touch with which claims arehandled.

“Consumer expectations around service continue to grow acrossall businesses,” he says, but the insurance industry oftenstruggles to impress its clients.

For its Auto insurance customers, Erie now uses severalpreferred facilities for executing repairs, which “gets[policyholders] in first and out faster,” he says. It’s a practiceCavanaugh projects will be more commonplace in the years ahead ascarriers strive to become more consumer-focused.

Another big edge Erie enjoys, he says, is its ability to makeunderwriting exceptions, one factor that contributes to thecompany’s impressive 92 percent retention rate.

“The larger an insurance company becomes, the less personal itbecomes,” says Cavanaugh. “One point I try to emphasize to ourpeople is that a great brand knows how to make an exception withoutsacrificing the integrity of the organization—whereas I think other[large carriers] would say, ‘Too bad, we’ve got millions ofcustomers, and we can’t treat you any differently.’”

Making the occasional exception “is not only the right thing todo, but it’s a competitive advantage that we have. We can be morestrategic in our thinking in terms of building a business,” hesays.

So go ahead and use the “R” word when referring to Erie, becausein Cavanaugh’s view it’s no indication of its outsized abilities.“We believe we have the ability to outperform anyone in ourmarket,” he says.