UIPI discusses East Coast expansion plans with District of Columbia commissioner.
The institute’s plans to expand homeowners insurance education classes to Washington, D.C., took another step forward during an October meeting with Lawrence H. Mirel, commissioner of the District of Columbia Department of Insurance and Securities
Regulation.
Representatives of the institute talked with Mirel about UIPI’s consumer education program, that is done in conjunction with local community groups, among other items.
“We look forward to the Urban Insurance Partners Institute and its member companies coming into the District to educate homeowners about insurance,” commented Commissioner Mirel afterward.
The meeting was a good chance to pinpoint issues of interest to the institute, relates Brenda O’Connor, director of public affairs for the American Insurance Association (AIA), who was at the gathering. “We wanted him to be aware of what the institute is doing and get some feedback which, as it turned out, was very positive.”The commissioner is enthusiastic about the UIPI education program since his office often gets calls from consumers who do not understand insurance.
“The meeting was a good opportunity to exchange ideas about consumer education,” reacts Suzanne Reade, president of the Urban Insurance Partners Institute. “We look forward to providing insurance education in the District of Columbia to help residents better protect their homes and families.”
The institute is currently establishing partnerships with community groups in the D.C. area. For more information call (773) 880-8780.
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Baltimore Equitable Insurance
If the walls of Baltimore Equitable Insurance could talk, they would have some mighty interesting stories to tell. The building has been around since the 1850s and is now on the National Register of Historic Places.
“We have made the structure our headquarters for the past 130 years,” tells Sharon Woodward, president of Baltimore Equitable.
Even though the building is a century-and-half old, that’s nothing compared to the age of the company. Baltimore Equitable was founded in 1794 by Joseph Townsend as the nation’s third perpetual insurance company.
“In the early 1800s the company’s clients included a ‘who’s who’ of Baltimore—the famous and infamous,” Woodward comments.Today, Baltimore Equitable remains remarkable, as one of only five large perpetual insurance companies still in existence. Perpetuals accept a deposit upfront for the entire premium, which is refunded in full when the policy is canceled.
Woodward attributes Baltimore Equitable’s longtime success to conservative underwriting, investment and management practices. The company writes homeowners insurance in Maryland, with a majority of policies in the Baltimore area. The insurer also plans to begin serving homeowners in Pennsylvania.
“Baltimore has a wonderful network of neighborhood organizations that I felt would be a great place for the UIPI programs to begin in the state,” Woodward relates.
The institute is in the process of expanding its programs to the East Coast, including Maryland. Baltimore Equitable is particularly enthusiastic about the institute’s insurance education classes. The company adopted a mission in the early 1990s, through its foundation, that focuses on providing insurance education to Baltimore residents.
Baltimore Equitable has about 6,000 policyholders and $25 million in deposits.
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Farmers Insurance Group
Farmers Insurance Group helps increase investments in underserved markets.
Insurers get a monetary return on investments in underserved areas through Impact.
Flush with success over its first multi-million dollar deal in California, Impact Community Capital LLC is laying groundwork for a second project. The unique for-profit insurance industry effort, known as Impact, is designed to increase investments in underserved markets of the state.
The inaugural project took longer than expected to put together. But once the idea took hold, insurance companies representing nearly one-third of premium dollars written in California got onboard. The advantage for insurers is that they can invest in underserved areas of California, through Impact, and get a monetary return on their investment. Multi-family rental housing received an infusion of $40.5 million in capital through the initial Impact deal. The insurance industry-owned entity purchased mortgages in that amount from California Community Reinvestment Corporation (CCRC). This freed up money for CCRC to make additional such loans. The mortgages were repackaged by Impact into securities, the majority of which have an investment grade rating, for purchase by insurance companies.
Farmers Insurance Group, an Urban Insurance Partners Institute member, was one of the original creators of Impact. Farmers believes it is important for insurers to be able to make a good investment while channeling money into neighborhood revitalization. The company is convinced the result constitutes a win for everyone.
“It’s important to get a competitive return,” elaborates Laszlo Heredy, vice president of Farmers Insurance Group. “Everyone can feel good about these kinds of investments if they’re structured properly. If every partner in the deal has some ‘skin in the game’ there’s an incentive for all parties to do well by looking after their vested interests. An outright grant may not have these same attributes.”Impact was founded in 1999 by 10 insurance companies, including Allstate, Conseco, Farmers, Pacific Life, PMI Mortgage, SAFECO, State Farm, Teachers Insurance and Annuity Association, 21st Century, and Zenith. Some companies chose not to participate because they believed they could accomplish the same objectives on their own.
The cost of maintaining the entity is borne by all Impact members, based on their percentage of market share in California. For example, an insurance company writing one-half percent of the statewide market would pay one-half percent of Impact’s cost, upon membership.
The next project for the group will be to purchase an estimated $50 million in mortgages, this time focused on single family dwellings. The deal is expected to be wrapped up by August of 2001, or perhaps earlier.
Now that the wheel has been invented in California, the concept could easily be imported to other states with very little setup cost. At least one state, New York, has considered the program.
For additional information on Impact check out www.impactcapital.net, or call (888) 548-5485.
Tool library is a gift that keeps on giving
Free access to tools doubled in Kansas City, Kansas, to spur revitalization.
Perhaps the tools possess a magical quality. Or maybe it’s just the organizations that are using them. The tools not only physically repair doors, they literally open them. A rare gift that keeps on giving is just what the Urban Insurance Partners Institute (UIPI) had in mind when the organization helped start a tool lending library in Kansas City, Kansas. The inventory has been doubled by the institute, to multiply the number of projects that can be accomplished.
Ladders, brushes, scrapers and other supplies have been donated for the second year in a row by the institute to Neighborhood Housing Services (NHS) of KCK, which administers the free program. The tools are beginning to have a far-reaching effect.
“The tools add a grassroots kind of dynamic that is really just developing,” extols Joel
Wakham, executive director at NHS of KCK, a partner organization of UIPI. “The tools have given us reason to talk to churches and groups here in this neighborhood with something to offer. That is a very strong type of thing to be able to say we are a willing partner.”
The tools were used during a June weeklong project to refurbish 13 homes in the Chelsea and Prescott neighborhoods. The supplies have also benefited many other efforts, including the Greater Emmanuel Baptist Church’s renovation of homes for low-income parishioners.“It’s a great idea, especially for a neighborhood like ours,” comments Dedric Moore, a resident and NHS board member. “Since it’s lower-income, people are always talking about ‘I’m going to work on my house when I get some money.’ It really helps the motivation of the people to make improvements on their homes.”
Volunteers from insurance companies that are members of the institute assisted in the work on the Prescott and Chelsea neighborhoods.
“It’s really neat, because when I was ages 4 to 16, I lived in the neighborhood,” says Garry Dial, insurance and financial services district manager of Farmers Insurance Group, an institute member company and an NHS board member. “It has been very rewarding personally, community-wise and professionally, since our primary goal is to help people.” Farmers Insurance Group and Dial donated funds to purchase supplies for the project.
Another aspect of the institute’s partnership with the Kansas City agency is providing insurance education to urban residents. Farmers Insurance Group is leading the homeowners insurance segment of the agency’s First Time Home Buyers class. Participants learn the basics of homeowners insurance and receive a smoke detector from the institute to protect their homes and families.
“When people go in to close their home loans, they walk in informed, knowing that they need insurance immediately and they have the option to preselect insurance,” elaborates Wakham. “I think that’s an important item.”
In addition to Kansas City, the institute has assisted tool banks in two other cities and plans to expand the initiative to other locations in the future.
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Hanover Fire and Casualty Insurance Company
The city feels like a comfortable pair of shoes, which just keep getting better with age, to Hanover Fire and Casualty Insurance Company.
The Philadelphia-based insurer has been providing contents fire insurance and burglary coverage, also known as renters insurance, since 1911. A new addition to Hanover’s product base is dwelling insurance. The policy, already available in Pennsylvania, will be offered throughout the company’s territory, which includes the District of Columbia and Illinois, this year. An expansion to additional states is in the works.
“It has always been our niche to provide coverage in cities,” states Ross Miller, vice president and general counsel of Hanover Fire and Casualty. “It’s a market that we’re committed to and comfortable in. We’ve had good financial results in the past.”The insurer was originally known as Hanover Mutual Fire Insurance Company, until a demutualization and merger with a sister company. The new Hanover Fire and Casualty has 11,000 policyholders and about $2.5 million in annual premium volume.
Hanover Fire and Casualty joined the Urban Insurance Partners Institute in October after reading UIPI’s newsletter. “It looked like just the sort of group we should be involved in since the institute works with urban affairs issues we’re involved in every day,” Ross explains.
The company is especially interested in the institute’s homeowners insurance education program, which is being introduced in several new cities.
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Harford Mutual Insurance Companies
The chair in the president’soffice at Harford Mutual Insurance Companies must be extra comfortable, since it hasn’t been vacated many times in nearly 160 years.
Philip J. Raub is only the 10th president in the company’s long history, and has reason to be proud of the legacy. The Bel Air, Maryland, based company, which is a new member of the Urban Insurance Partners Institute, has grown from humble beginnings to a policyholder base of about 45,000 today.
The insurer was started in 1842 by farmers who were in an underserved market and
decided to band together. As the times changed and farming dwindled, Harford
also underwent a metamorphosis.“We don’t write any farms today,” relates Raub. “Now it’s mostly commercial. We found we were more successful in commercial lines than we were in personal lines.”
About 90 percent of Harford’s business comes from insuring artisan contractors, such as carpenters, electricians and plumbers; restaurants; and commercial habitation, including apartments and condominiums. The other 10 percent is homeowners insurance, dwelling fire, and personal umbrella policies.
“Our business is significantly in urban and suburban areas,” Raub reports.
Harford Mutual’s total premium volume is $93 million, generated through the independent agency system. The company operates in Maryland, Pennsylvania, Delaware, New Jersey, Virginia, North Carolina, Tennessee and the District of Columbia. A large percentage of business comes from Maryland and Pennsylvania.
“We try to be good corporate citizens in all of our work,” says Raub, about Harford Mutual’s decision to become a member of UIPI. “We know there are issues to be addressed in urban insurance about how the industry is perceived. We are happy to be a new member of the institute.”
The nonprofit Urban Insurance Partners Institute is the only insurance industry organization solely dedicated to urban affairs.
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Lehigh Mutual Insurance Company
Lehigh Mutual Insurance Company grew up in the country, but today is a certifiable city slicker. About 75 percent of the company’s business is now urban.
“Starting in the 1960s and ’70s we faced either developing a new business niche, or going out of business,” relates Michael Yeager, president and chief executive officer of Lehigh Mutual.
The rural properties Lehigh traditionally insured were being gobbled up, PacMan-like, by the growing reach of the Allentown, Bethlehem and Easton communities. The century-and-a-half old company recognized an opportunity and has never looked back.
“It really has been a profitable business decision,” Yeager details. The company shifted gears by writing more homeowners and tenants policies and fewer farm properties.
“Because we built up such a good reputation on the landlord properties and were an integral part of the community, we were easily able to develop the urban homeowners policy as well,” he tells.
Yeager, chairman of the Urban Insurance Partners Institute, believes a deep-rooted knowledge of the urban area served is critical to success.
Lehigh Mutual headquarters are located in the heart of Allentown. Employees, from underwriting and operations staff to agents and claims representatives, are residents of the area.
“I truly believe the urban core presents the opportunity for insurance companies to do well if the company is committed to having a physical presence in the community,” Yeager says. He also advises specific products and underwriting guidelines tailored to the areas served.
In addition, Yeager advocates membership in the Urban Insurance Partners Institute. Lehigh Mutual, a founding member of UIPI, conducts homeowners insurance education classes in the Allentown area, in partnership with a community group, on behalf of the institute.
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Liberty Mutual
Liberty Mutual Leads by Example
Consistent willing ness to help is a defining characteristic of Liberty Mutual Group, find the many organizations associated with the insurer.
“If we had more corporate citizens like Liberty Mutual to help with nonprofit and community groups, our society would be better off as a whole,” emphasizes the Rev. Joseph E. Washington, chairman and CEO of the Organization for a New Equality (O.N.E.).
Liberty Mutual has been a major financial supporter of the civil rights organization, which helps people better their lives economically, for more than a decade. The company’s involvement has led to the development and expansion of O.N.E. programs that benefit residents of several U.S. cities.
The programs include the Economic Literacy Campaign, which teaches urban residents about fundamental economic issues, and the Options Program, that assists first time homebuyers. Liberty Mutual has also provided insurance expertise for O.N.E. workshops, meeting space and computers to the organization’s clients.
“They have led by example,” the Rev. Washington states. “Not only have they talked the talk with us, they’ve walked the walk.”
Liberty Mutual’s long-time relationship with O.N.E. is just one example of the long-time commitment the company has to urban markets. The insurer is a founding board member of the Urban Insurance Partners Institute.
The company itself is an outgrowth of an urban area. Liberty Mutual began operations in 1912 in Boston.
“We have always worked hard to make sure our products and prices are responsive to urban market needs,” notes Guy Douyon, Liberty Mutual assistant vice president and manager of urban market development.
The insurer has made an impact by being an integral part of the cities it serves. Hundreds of employees have volunteered their time to paint houses, beautify entire neighborhoods and teach homeowners about insurance through company projects and several Urban Insurance Partners Institute sponsored efforts.
Liberty Mutual offices are strategically placed in city neighborhoods to make products even more accessible and visible to urban residents. Company products also are available to employer groups and associations at a discount and through payroll deduction.
Neighborhood office employees, like Resident Sales Representative Connie Oliver of Richmond, come from the communities they serve.
“Opening up the office in the city was very close to my heart since I have roots in the area,” Oliver relates. “People appreciate the office being close to their work and homes.”
Oliver and 30 other Richmond area employees have immersed themselves in making a difference by volunteering for projects such as painting and landscaping homes. She also is a board member of Neighborhood Housing Services (NHS) of Richmond, where she is spearheading a survey to find out neighborhood concerns.
These efforts are duplicated in several cities across the country, with a focus on accessibility to insurance products, investment in communities, and overall safety. In Dallas, Liberty Mutual christened a new Day Care Retrofit Program, which makes day care centers safer places for children. Other company safety initiatives focus on bike, automobile, bus and home safety.
Through its participation in the national Inroads program, Liberty Mutual also provides internships to 100 minority college students annually. The students work in Liberty Mutual offices, with the goal of having them pursue insurance careers with the company upon college graduation.
These projects and many others signify Liberty Mutual’s dedication to making communities across the country better places in which to live.
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National Association of Mutual Insurance Companies
NAMIC encourages membership involvement
National Association of Mutual Insurance Companies reiterates support of institute.
A major national insurance trade association, NAMIC, reaffirmed its commitment to the Urban Insurance Partners Institute at a fall annual meeting.
Outgoing National Association of Mutual Insurance Companies Chairman Jack Clanton encouraged the several thousand delegates in attendance, “to find out how this rapidly growing organization can help you.” Clanton also is on UIPI’s board of directors, representing Farm Bureau Mutual Insurance Company of Manhattan, Kansas.
Clanton introduced UIPI President Suzanne Reade as a special guest and reminded attendees that the institute was launched by NAMIC.
“UIPI is a great way for insurance companies to become involved in rejuvenating our urban communities,” comments NAMIC President Larry Forrester. “Through the institute, the insurance industry can be responsive to the developing needs of urban homeowners and increase the availability of property insurance in America’s urban communities.”
The institute met with a number of insurance company representatives while at the convention.
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The Philanthropic Insurance Companies
Over three centuries of combined service to policyholders characterizes The Philanthropic Insurance Companies.
“We were urban from day one,” notes Richard E. Bauer, chairman, president and CEO of The Philanthropic Insurance Companies. Two of the insurer’s three affiliated companies were founded in the 1800s and the third in 1956.“As mutual companies we’re here to serve our policyholders and we take that very seriously,” Bauer says. “We’ve been able to serve urban areas well and have experienced very, very good growth over the past seven to eight years because we have a good reputation.”
The Philanthropic has a life and a fire insurance company, along with a stock accident and health insurance company. The combined operations serve about 85,000 policyholders in the states of Pennsylvania and Delaware. Annual premium volume is approximately $6 million. Combined surplus of the companies has tripled during the past eight years and premium has increased by 60 percent.The companies specialize in small face amount policies for low to middle income markets, according to Bauer.
The CEO believes The Philanthropic can make a lasting impression on communities the companies serve by being involved in the Urban Insurance Partners Institute.
“We want to do a more effective job in working with our communities,” Bauer elaborates. “The institute will give us a forum and reminder that we need to be doing even more in communities than we have in the past.”
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Philadelphia Contributionship Companies
Urban insurance marketing is centuries-old “trend”
Profiles of two Pennsylvania insurers show long-standing tradition of serving urban markets.
Grab this fact for Who Wants to Be a Millionaire, the hit TV show. You never know if a friend or relative will need you as a “lifeline.”
What famous American founded the nation’s oldest insurance company? If you answered Benjamin Franklin, you’re in the money.
Franklin and associates created The Philadelphia Contributionship For The Insurance of Houses From Loss By Fire in 1752. Although urban insurance has become almost a catch phrase over the past decade, insurance companies have been providing this type of protection for centuries. Take Franklin’s one-time company, which continues to do the majority of its business in the city of Philadelphia.
President and CEO Christina T. Webber attributes the insurer’s success to “knowing the market,” a key ingredient in the overall mix.
“The people who don’t go after the market are people who don’t understand the market,” she elaborates. “Our base of experience helps us.”
For those companies without the benefit of centuries of continuous service in one city, Webber recommends taking the time to research common risk characteristics. For example, water damage is a big problem in Philly, but not as significant in other urban communities.
Other reasons why the costs of settling claims in cities can be higher than outlying suburbs are population density, increased use of public adjusters and more frequent litigation, Webber says. Population density results in a greater chance of damage to adjoining properties since homes and businesses are close together.
“In Philadelphia, the costs of insuring in the city are definitely much higher than the outlying suburbs,” Webber notes.
As part of the company’s commitment to writing insurance in urban areas, The Philadelphia Contributionship Companies became a member of the Urban Insurance Partners Institute.
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