BREAKING THE RULES

Rough Notes, Dec 2004 by Boone, Elisabeth

Focused yet fun loving, ACUITY delivers the goods while bucking the trends

The words "insurance" and "fun" aren't commonly uttered in the same sentence ... and the reason is simple: To most people on the planet, insurance is decidedly not fun. Important, necessary, reassuring ... but hardly fun.

At ACUITY, however, everyone from the CEO on down is bucking the conventional wisdom, breaking records, accumulating awards-and having a blast in the process. Thanks to a robust corporate culture, stringent underwriting, savvy investing practices, and strong ties to agents, ACUITY has transformed itself from a modest hometown mutual to a performance powerhouse and after 80 years is still based in the friendly confines of Sheboygan, Wisconsin.

The company known today as ACUITY opened for business in 1925 as Mutual Automobile Insurance Company of the Town of Herman. Subsequently renamed Mutual Auto Insurance Company of Wisconsin and then Heritage Mutual Insurance Company, ACUITY now operates in 12 states, writing a wide range of commercial business as well as personal lines. Written premium is projected to reach $700 million by year's end, and assets currently stand at over $1.3 billion. The company is justifiably proud of its A rating from A.M. Best, and employees have settled comfortably into a gleaming new addition to ACUITY'S home office complex. The expansion cost $45 million, which was paid in full before completion with just three months of cash flow from operations.

Guiding ACUITY on its dynamic journey is the steady hand of Ben Salzmann, president and chief executive officer, who has been with the company since 1990 having previously served as senior vice president in charge of information technology, business systems, claims, marketing, and services. Salzmann speaks with quiet pride about ACUITY'S goals, initiatives, challenges, and achievements.

"The five elements that make up ACUITY are our underwriting discipline, our in-your-face sales culture, our high-end technology platform, our claims expertise, and our broad product range," Salzmann says. "Those five things are the underpinnings of who we are."

The ACUITY product portfolio is indeed broad. Contractors, manufacturers, and assorted retailers, wholesalers, and service providers are among the company's target classes, which range from appliance repair shops to water drillers. The company also writes a large volume of workers compensation coverage. In addition, it offers a full complement of personal lines products, including auto, homeowners, fine arts, jewelry, coins and stamps, and property and liability coverage for home-based businesses.

Teaming up

How does ACUITY seek to position itself in the marketplace? The answer to that question, Salzmann says, owes a great deal to the fine art of doing the unexpected. "When we sell a major account, we have a five-person team at the presentation: our commercial field underwriter, our sales territory manager, our claims specialist, our loss control expert, and an independent agent. This team walks in with the independent agent and shows the insured that in every conceivable way we can deliver superior service and superior protection and yet be very affordable and offer the best value the insured can find," Salzmann declares.

"For us, everything comes down to consistency, functioning as a team, really understanding the risks we're involved in," he says. "On top of that is a very in-your-face, outgoing, almost swashbuckling sales orientation. Each year our top executives tour the Midwest and give a total of 20 speeches to 3,000 agents, telling them who we are, what we're doing, the kind of business we want, how to work with us. Our agents are good people. If we tell them what we're looking for, they'll work with us on it."

The brochures that promote these speaking tours are sly, irreverent, and fun. One promotion for the 2004 tour, titled "A Spiritual Awakening," shows Salzmann and vice presidents Wally Waldhart (sales and communications) and Ed Warren (commercial lines) clad in monk's robes, looking appropriately solemn as they hold an open book with Gothic script announcing the company's A Best's rating. The cover for the 2002 brochure shows the same three executives, this time attired as Men in Black, complete with folded arms, fierce scowls, and dark sunglasses. Pulling no punches, the title of the 2002 event was "In Your Face: The Speaking Tour with an Attitude!" The tour goes to cities in Wisconsin, Illinois, Minnesota, and Missouri. Topics covered have included "How is your stress level affected by national versus regional carriers?"... "What should you be doing now to prepare for the next soft market?" ... "What should you be demanding from your carriers?" and "What are the most effective tools for writing good business?" Drawings for cash prizes add to the fun, and attendees earn three continuing education credits.

Succeeding in comp

An important area of focus for ACUITY is workers compensation coverage, which has a well-earned reputation as an extremely troubled line. How is the company able to write this business profitably when others are struggling? "I love the fact that we can offer a service in an area that is distressed-specifically, workers compensation," Salzmann remarks. "When you sell auto insurance, you're playing a game of pennies and nickels. You can't differentiate yourself very much in the market. When you sell workers comp, you can entertain accounts that are desperate and may not be able to get insurance-but they meet all your criteria. You get their attention, and they see the need to operate in a highly safe and responsible manner. They're looking for your help with loss control.