In December 2015, A.M. Best announced that it had changed its rating for the Concord Insurance Group (Concord Group). For Agency Checklists, the most salient part of the rating agency’s announcement, was A.M. Best’s positive statement that the Concord Group management planned to expand its commercial auto line into Massachusetts in the near future.
Our interest piqued, Agency Checklists queried The Concord Group’s Senior Vice President and Chief Operating Officer, Warren McLean, via email, about the company’s history here in the Commonwealth, its plans for future expansion here and whether that includes appointing more independent agents. In a wide-ranging interview, Mr. McLean, who worked for many years with the Fireman’s Fund here in Massachusetts, before he started his own Massachusetts company, Peoples Service Insurance, gives us some insight into the 80-year-old New Hampshire mutual insurer’s present and future plans to increase its market share in Massachusetts.
How did you happen to move from being located in Massachusetts to being located and headquartered in New Hampshire?
In 1997, the Concord Group brought Peoples Service Insurance Company into the Group, expanding its footprint and sale of personal automobile insurance into the Commonwealth. Peoples operated under the Concord Group brand and I moved to the Group’s headquarters here in New Hampshire.
Could you tell our readers a little about the history of the Concord Group, in general, and its history in Massachusetts, in particular, and how it became involved in coming into the Massachusetts market?
The Concord Group Insurance Companies began in 1928, with the Farm Bureau Mutual Fire Insurance Company providing property insurance to the New Hampshire farming community. Over the years, Farm Bureau Mutual became Concord General Mutual; Green Mountain and Vermont Accident were added to The Concord Group family of companies, and our service exclusively through the independent agency channel grew to include all personal and commercial lines of business in Maine, New Hampshire and Vermont.
In 1997, we brought Peoples Service Insurance Company into the Group, expanding our footprint and sale of personal automobile insurance into the Commonwealth.
Homeowners and Dwelling Fire followed and early last year we released our first commercial offering with the introduction of our BOP product. Work on Commercial Auto is underway and we look forward to its introduction later this year. Today, The Concord Group enjoys reputation and market share distinction as the premiere regional mutual in the Maine, New Hampshire and Vermont tristate area.
Massachusetts is of significant interest, opportunity and excitement for us. We have competitively positioned product offerings and our people are second to none, providing exceptional claims, underwriting and customer service. We have a dedicated team of underwriters and marketing professionals with deep knowledge of the marketplace and we continue to grow our presence in the Commonwealth through a strong and expanding agency plant.
Massachusetts holds key strategic focus for us as we strive to broaden Concord Group’s position as Northern New England’s leading regional carrier.
What differences, if any, do you see between the Massachusetts market and markets in the other states where the Concord Group operates?
Consumer loyalty to the local independent agent has been a cornerstone of difference for the Massachusetts market. Yet, agents must remain vigilant in the face of headwinds created by national direct writers attempting to convince consumers that insurance is only a commodity.
Massachusetts consumers buying insurance from a local independent agent contribute to their community’s economy and enjoy responsive and personal service from people who live and work in their community. We must work together – agents and carriers – to preserve that differentiation within the Commonwealth.
What is the Concord Group’s market share in Massachusetts?
The Concord Group wrote $22.2 million in written premium in Massachusetts in 2015. While our market share is small, we continue to grow our business. The successful introduction of our business owners product in 2015, will allow us to provide more to our agents and will open up new relationships that will accelerate growth in the coming years.
How many agents does the Concord Group have in Massachusetts?
We have about 90 (87) agencies representing Concord Group in Massachusetts. Many are located in eastern counties.
Does the Concord Group have an office here or staff? (marketing representatives, underwriting, claims, operations)
Concord Group has staff dedicated to our business in Massachusetts with many living in the state. We have dedicated marketing representatives, personal lines underwriters and claims staff supporting Massachusetts, all possessing a deep knowledge of the marketplace. Our business is growing and our hope is that it will grow at a pace and volume that warrants making an investment in a physical office. While a number of our staff live and work in Massachusetts we have many more supporting our Massachusetts business from our Bow, NH campus. We look forward to the day when we secure an office in Massachusetts but we need to have a larger footprint first.
How involved does the Concord Group plan to become in Massachusetts through growth?[pullquote]With less than 100 agents appointed…there is tremendous potential to expand representation in the Commonwealth[/pullquote]
Massachusetts is very important to the company strategically. We plan to continue augmenting our product suite to enhance our prospects for growth. We are very interested in expanding our business through agency appointments.
Do you have any projections or predictions on where the Concord Group might be in Massachusetts by way of market share and total agency appointments?
We do not provide forecasts, however, we see our company achieving consistent growth in Massachusetts over time. This growth will be achieved by expanding our agency representation, enhancing our product suite, and maintaining a competitive posture in the market. The Concord Group has ample capital to support that growth.
A.M. Best recently changed the Concord Group’s rating from A to A- “with a stable outlook,” was this expected?
We were disappointed by the change in our rating but we respect A.M. Best’s decision. It should be clear, however, that the Concord Group’s financial position is very strong and all of our capitalization ratios remain consistent with A-rated companies. With a premium to surplus ratio of well less than 1 to 1 and a balanced book of casualty and property premium, and a consistent history of growing our surplus, the company is in a strong position to meet its obligations under any circumstances and support our future growth plans.
What is the Concord Group doing to address the issue?
The company’s main focus has been and remains on improving our underwriting income. We have been working over a multiple year period to implement changes to improve our combined ratio and we are confident in our ability to produce underwriting profits on a consistent basis going forward. We saw significant signs of improvement in the performance of our business in 2015, but unfortunately those improvements were overshadowed by the worst catastrophe year in the company’s history.
What time frame do you see for a possible rating increase?
As A.M. Best classifies financial ratings, an A-minus rating is in the excellent category. While we aspire to return to an A rating, we don’t see this action compromising our ability to meet our goals. Our focus is on earning underwriting profits on a consistent basis. If we do this, everything else will take care of itself, but it will take a number of years.
What would you say to your appointed agents who may be nervous about the rating change?
As indicated earlier, an A- rating is classified as excellent and we compete against many A- rated companies in the independent agency market. To date, all of our agents have been very supportive of us and we have not experienced any wavering of commitment. If agents do have concerns, we encourage them to have a dialogue with us directly.
While financial ratings are important, they do not tell the whole story regarding a company or its financial strength. The Concord Group is proud of its long record in providing excellent service and value to the New England market. We have consistently grown our surplus and improved our premium to surplus ratio over the years and we maintain very strong financial ratios.
In the A.M. Best announcement, it discussed the Concord Group’s plans to expand its commercial auto insurance offerings in Massachusetts. Could you tell our readers about that market initiative?
Expanding commercial auto is under development and a priority for 2016. Our initial goal is to provide the opportunity to write the business autos of accounts written in our BOP and Artisan Contractors (CBOP) programs. As a new entrant, we will utilize AIB forms and endorsements, though we expect to implement credits and broadening endorsements similar to those used in our other states. Our agents will be able to quote and issue business auto policies (BAP) via our Vision agency interface platform.
Along with the BAP, we are also excited to introduce our Used Car Dealer Program. Recently released in our northern New England states, this program targets small, locally owned and reputably operated, used car dealerships.
What does the Concord Group see as the strategic advantage to expanding in the Massachusetts insurance market now?
Massachusetts is a large insurance market with an outstanding independent agency system. It has historically been friendly to New England mutual companies that understand the New England customer. As a New England Mutual with a reputation for outstanding claim service and strong agency relationships, we believe the Concord Group has a great value proposition for Massachusetts agents and customers.
What do you think it can offer consumers here?
We are local and accessible. We offer an edge to consumers because of our mutual structure. Mutual ownership is about the needs of policyholders being put first and where having no shareholders means we work together through a shared purpose to minimize risk and settle claims more fairly and quickly. We strive to be convenient for our policyholders by offering online digital access to all policy documents through our CONNECT portal and providing multiple online bill payment options. Policyholders enrolled in our newsletter service receive risk management tips and other relevant information routinely from us.
Some people with a long memory might remember the Concord Group leaving the Massachusetts marketplace for auto insurance. What would you tell an agent who asks about the commitment of the Concord Group to Massachusetts if the market turns sour again?
Prior to the introduction of managed competition, Massachusetts had the most dysfunctional auto insurance system in the country and it was built in such a way that some carriers were advantaged at the expense of others. The disadvantaged companies, Concord among them, had little prospect to earn adequate returns.
Today, the system is healthier for companies and consumers alike and we don’t see that changing. All markets, even the most stable, experience ebbs and flows in profitability and Massachusetts will be no different. The Concord Group is well prepared to weather these ebbs and flows. Massachusetts has experienced significant catastrophe losses in recent years, but this has not dimmed our appetite for continued growth in the state because we continue to believe the prospect for profitable growth is high.
So do you feel confident based upon the Concord Group’s results to date in the Mass. marketplace?
In short, yes. While catastrophe losses have been substantial, with multiple events in 2011, and the winter of 2015, we feel good about the quality of our property business and the prospect of that business for producing future profits. Our personal auto business has shown consistent improvement since our entry into the market, in keeping with our expectations. Our BOP product has been received by our agents with enthusiasm and we have been impressed by the quality of submissions to date.
Why should a Mass. agent look at the Concord Group as a viable or desirable option for placing business for their insureds?
We survey most policyholders experiencing a claim and consistently receive satisfaction ratings of 98%, and higher, even in the face of multiple catastrophic weather events. Last winter was a challenge to meet policyholder expectations, but we did it because of our people.
We have claim offices in Vermont and Maine which helped bridge the overflow of claims from the multiple CATs. Being there when our policyholders need us is the key component in receiving excellent customer reviews. Agents have confidence knowing their customers will be taken care of when needed.
As of today what is the Concord Group’s offering in Massachusetts by way of products?
The Concord Group writes personal auto, homeowners, dwelling fire, personal umbrella, and business owners lines in Massachusetts. Also, as indicated earlier, we plan to begin offering commercial auto in the near future as well. We will continue to expand our product offerings as we see opportunities for our company to meet the needs of our agents in the Massachusetts market.
Are there additional products or services in the pipeline that Massachusetts agents might wish to know about?
On the commercial side, our BOP program has two exciting enhancements in the pipeline. Data breach/Cyber and Umbrella endorsements are under development and scheduled for release in 2016.
We do have some exciting personal lines product changes coming in the next few months. Our personal automobile Accident Forgiveness benefit is on track for an April release and we will be increasing our homeowners program Account Credit discount to better recognize a companion automobile policy written with Concord Group. We offer a full suite of competitively positioned personal lines products and additional product enhancements are in development.
Does the Concord Group generally require the complete account or can any of these products be written on a monoline or stand-alone basis?
We prefer account business but it is not required. Stand-alone business is an acceptable submission. I’d offer that the more lines of business we have with a given policyholder the better we know the policyholder and the more value we can provide to them. In that regard, account business is preferred.
As you know WinRater is what most MA agents use. What is the Concord Group’s status with WinRater as well as Real Time?
Concord Group (Green Mountain) rates are available in WinRater with personal automobile available in Real Time and homeowners available as manufactured. Concord Group’s policy administration systems for personal lines and commercial lines are web-based allowing agents to quote, issue and endorse entirely online. Policy documents are immediately available via Concord Group’s agent portal. Delivering homeowners Real Time through WinRater is a future deliverable.
If there are independent agents who are interested or concerned when they consider accepting or applying for a contract with the Concord Group what would you say to them?
Our agency and policyholder relationships are the cornerstones of our business. Times change and moving forward with new technology and products is a must to stay relevant and provide for a secure future for the people that rely on us. We are expanding our franchise in the Commonwealth. Agents looking to add a rewarding and mutually beneficial relationship to their agencies are folks we’d like to meet to discuss the opportunity that the Concord Group provides.
Partnering with The Concord group is easier than many carriers and we encourage agents to take the time to get to know us better. We have an excellent customer service team supporting both agents and policyholders and we provide comprehensive training and education on our products and systems enabling agents to become proficient quickly.
How many agents do you expect to appoint over the course of the next 18 months?
With less than 100 agents appointed we feel there is tremendous potential to expand representation in the Commonwealth. We welcome agent inquiries and conversations about the value of a relationship with Concord Group.
How would an agent who is interested in writing insurance with you get in touch with you?
To get to know us better please call one of our Massachusetts Marketing Representatives.
Mark Trombly, cell 603 491-2528 or Paul Doyle, cell 603 344 0775