PARTNERS IN PERSONAL LINES

Rough Notes, Oct 2005 by Boone, Elisabeth

Atlantic Mutual teams up with Countrywide Insurance Group to expand Us reach into the affluent market

Luxurious custom homes...high-end vehicles, treasured antiques...priceless fine arts...these are just a few of the exposures that characterize the market for affluent personal lines. Add in expensive personal watercraft, second homes and vacation retreats, the threat of costly liability lawsuits, and clients who expect five-star service, and it's clear that this market poses a major challenge to the insurers that aspire to capture it.

Atlantic Mutual has been meeting the needs of this demanding market ever since it introduced its Atlantic Master Plan® policy for affluent individuals in 1983. In July of this year, seeking a wider market for its product, Atlantic Mutual entered into a strategic partnership with Countrywide Insurance Group to expand the distribution of Atlantic Master Plan nationwide.

A key operating unit of Countrywide Financial Corporation, the largest mortgage loan originator and servicer in the United States, Countrywide Insurance Group provides underwriting, agency, and commercial brokerage services through its member companies. Property and casualty companies of the group are rated A by Best's.

The strategic alliance between Atlantic Mutual and Countrywide Insurance Group consists mainly of a reinsurance agreement in which each company will assume a portion of the risk on affluent personal lines business. The agreement is intended to generate new revenue streams for both organizations. It will allow Atlantic Mutual's independent agents to leverage the A rating of Countrywide's P&C division to drive growth in the states Atlantic Mutual currently serves; in addition, work is under way to expand the partnership to the western states and Texas, where Countrywide Insurance Group will leverage the Atlantic Mutual brand to increase its access to the affluent personal lines market and will offer the Atlantic Master Plan through independent agents.

Joining forces

How did Atlantic Mutual, an oldline mutual insurer with deep roots in the independent agency system, come to form a partnership with Countrywide Insurance Group, which writes a large segment of its homeowners business on a direct basis?

"We were looking for-and we found it with the Countrywide Insurance Group-a strategic alliance with someone who understood and appreciated what we were trying to do," says Dan Olmsted, president of Atlantic Mutual. "We wanted someone who liked what we were doing, from the standpoint of our product, our focus on independent agents, and our commitment to service." Atlantic Mutual also sought a partner who "shared our enthusiasm for how terrific the affluent market and the package market are,and would help us take our product around the country," Olmsted remarks. "We're in 14 states and Washington D. C. right now, and there are a lot of opportunities for us to expand, particularly on the West Coast." A key goal, he noted, is to be in the California market by the second quarter of 2006.

Ultimately, he says, "We want to take our product to the affluent market throughout the country. We're looking to spread our risk and to grow our business."

A boon for agents

Olmsted continues: "Our agents have wanted us to go into more states, so when they have an individual who lives in New York or New Jersey and has one or more additional homes in other states, the agent will be able to meet those needs. As we get into more states, we'll be able to provide full services to that customer wherever he is, so he'll stay with Atlantic Mutual, instead of having to go to another company. Our agents are excited about that, and I think they're excited about the opportunities they have with Countrywide."

The partnership with Countrywide also benefits Atlantic Mutual agents because it addresses a key finding in the 2005 Company Performance Survey conducted by the Professional Insurance Agents of New York, Olmsted observes. "We scored in the top five positions in 11 out of 16 categories and came in number two overall in New York," he says. "We would have been number one overall if not for one category-having an advertised/recognizable brand.

"A lot of agents have told us, You're the best kept secret in the industry/ which is a double-edged sword," he continues. "We want to maintain sole focus on the independent agency system, and we want to maintain a strong franchise value by being in the best agencies-the ones that match up their focus on service and their focus on providing counsel and advice to people with our focus on providing a great product and great claims service," Olmsted declares.

Atlantic Mutual currently works with approximately 300 independent agents in the states in which it now operates. "As we move into California and other states around the country, we'll be looking for independent agents who provide the level of service and counsel we expect, and who have the kinds of clients we're pursuing," Olmsted says. "The Countrywide alliance offers us more opportunities to get the word out about Atlantic Mutual and to communicate it in more places around the country."