The soft market hasn’t gotten Robert A. DiMuccio down.
DiMuccio, chairman, president and chief executive officer of Amica Mutual Insurance Co., sees growth opportunities for mutual carriers even in a soft market. But he also acknowledges there are challenges in such a market.
He offered some of his thoughts on the market for mutual carriers in a conversation with our sister publication Insurance Journal.
This has been edited for clarity and brevity.
Insurance Journal: Where do you see opportunities for growth by mutual insurers as the soft market continues?
DiMuccio: Well, I think that the market is the market. We’re all seeing some challenges with growth. The market is a little bit soft, and it’s a highly competitive market particularly in the personal lines.
I don’t mind the competition. I think it makes all of us better when there’s competition, and in the end, the consumer wins. We don’t mind. The economy becomes more efficient. The business becomes more efficient in a soft market. I think that our approach has always tended to be that we want to grow, but it’s easier, in the long run, to start with the basics of retaining your current customers.
It’s always less expensive and better for the business if you treat your present customers well and you retain them, so we always start our year with the retention strategy for the coming year and then look for growth on top of that.
IJ: Do you see any challenges in the soft market for this growth?
DiMuccio: Yeah, there were challenges, and one of the challenges for any insurer is to maintain a level of underwriting discipline when the market is soft. There are basics to this business, and a disciplined approach is really important. So, that’s a challenge, and we try very hard to maintain a disciplined approach to the business, to risk evaluation and so forth. We don’t want growth for growth’s sake.
IJ: How about any unique growth opportunities? Do you see any of those out there?
DiMuccio: Over the last five years or so, we’ve studied market trends, population changes, and we are focused quite a bit in areas of the country where we see population increasing. We’ve got a strategy to grow in the Southwest. It’s one of the fastest-growing areas of the country.
We put a sales center in Austin (Texas); a regional sales center to help with that effort. We also see the Northwest as a very vibrant growing economy both in tech and in the economy.
Financial services in the Northwest are growing very quickly, so we see a lot of growth opportunities there, particularly where wealth and population are increasing. We’re still committed to the Northeast, our home region, as well as the Eastern Seaboard. We’re also seeing opportunities for growth in the Southwest.
IJ: What are some other growth strategies? For example, do you think it’s a good time to focus more on geographic expansion or customer retention, or perhaps launching new products?
DiMuccio: In our business, we maintain an underwriting discipline, and part of that discipline is having a geographic dispersion of our business. We’d like to have customers in all parts of the country as spread out as we can.
There are some realities, though. For instance, population centers tend to gravitate within 100 to 200 miles of the coasts, and that provides its own unique challenges. But within that, we still have a geographic strategy that creates opportunities and gives us the dispersion that all insurers need, particularly in the property business.
IJ: Are there any new products that you anticipate launching, say in the coming year or two years, that you could talk about?
DiMuccio: Nothing far enough along that I could talk about. I think that, as an industry, it’s as much about the service as it is about the product. The forms, the legal forms of the contracts, the policies that we use are pretty standard across the industry and on a regulatory basis somewhat by design.
We think that the difference is our customer service and in making sure that we’re addressing people’s needs through their preferred communication channels. We have customers that will call us from time to time, or they’ll chat with us online. We also have customers that email us or tweet to us. Our product is the service we provide and being ready and able to talk to our customers anytime, anywhere.
We just rolled out a new adjuster product that goes on an iPad that allows our adjusters using an iPad to record damage to a vehicle or house and upload that information directly to the company files and get the adjustment process moving as quickly as possible.
Always, our objective is to cut the time between an incident happening and our follow-through issuing a check and closing the file for the customer’s satisfaction, so we think a lot of this is going to be in the service channel compressing the time and the aggravation of a claim. A claim is a disruption of somebody’s life, and our job is always to make that as seamless as possible.
IJ: Do you see an end to the soft market anytime soon?
DiMuccio: I’ve made it a practice, after being associated with this business for 37 years, not to predict the beginning or the end of a soft market—interest rates and so forth. I think trying to predict the market movement over the long run is not a winning strategy.
What we think is a winning strategy is to be ready to have your company, have your people, your folks, your balance sheets structured and so forth for a range of outcomes and situations. That’s the way we think you have to operate.
Now, there’s always going to be a tail event—the far end of the tail that nobody can predict. They happen from time to time. But having your company ready for a reasonable range of possible outcomes is our approach, my approach to dealing with markets.