‘Mutual’ Respect: SECURA Says Agent Loyalty Can Survive Softer Market

West Bend is far from the only Wisconsin-based regional mutual insurer making a mark. The CEO of Appleton, Wis.-based SECURA Insurance Cos., John Bykowski, took some time recently to talk with IJ during the Independent Insurance Agents of Wisconsin’s annual convention.

SECURA, which is about 40 percent West Bend’s size with total assets of $406 million as of year-end 2003, operates in eight Midwestern states, has been in business for 104 years and was recently upgraded to “A” by A.M. Best. The company sells personal, commercial and farm lines in Minnesota, Michigan, Wisconsin and Iowa, personal and commercial lines in Missouri, Illinois and Indiana, along with commercial lines only in Kentucky. A little over 400 agencies are appointed with the company.

Riding the crest of the hard market, SECURA saw an 18 percent increase in direct written premium to $279 million in 2003 and a 22 percent jump in policyholders’ surplus to $128 million. Fifty-four percent of SECURA’s book is commercial lines, 39 percent personal and 7 percent far business. Meanwhile, the company saw 26 percent growth in commercial lines in 2003, aided by $43 million in new business.

One way in which SECURA has tried to set itself apart is through MILE-STONE, an all-in-one auto and homeowners policy. The package personal policy makes up 40 percent of SECURA’s total personal lines book of business.

“You need to have a package for independent agents to compete,” Bykowski said. “And this makes it so much easier for the agent. There’s one bill, and the customer can pay it directly on the Internet.” He added that contrary to conventional wisdom, MILE-STONE has a stronger retention rate than for customers who buy each product separately.

“One portion of the account may go bad, but you retain the whole policy,” Bykowski said, noting that MILE-STONE’s retention rate is 10 percent better than for SECURA’s stand-alone auto and homeowners policies. “In the real world, you might lose that anyway as a monoline policy.”

Like West Bend, SECURA has made the conscious decision to stay in the Midwest, picking on a state-by-state basis where to enter the market. “It’s much better to have a company domiciled in Wisconsin than, say, New Jersey, Texas or California,” Bykowski said. “They are regulating our business, but it is a very favorable regulatory environment.

“When we look at expansion, one of those key things we look at is regulation,” he added. “We would not enter that state if we felt we could not make a profit.” He cited Michigan and Missouri’s efforts to ban insurance scoring as an obstacle to be overcome. Wisconsin, on the other hand, is holding back (see above story).

“We believe a lot in relationships,” Bykowski said. “That’s why we show up at these things. You don’t see too many CEOs here usually…We are the No. 1, 2, or 3 company at 80 percent of the agencies we deal with. For our part, we won’t appoint another agency across the street. The loyalty goes both ways.”

Topics Agencies Pricing Trends Wisconsin