IT’S WHAT’S INSIDE THAT COUNTS [Rough Notes]

Union Standard delivers "best of US" service to commercial customers in its eight-state region

Americans of a certain age remember when silver coins really were made of silver, not the copper-nickel blend that was introduced in 1965. The so-called "sandwich coins" in use since then may be legal tender, but those in circulation have little intrinsic value.

Pre-1965 coins, in contrast, contain 90% silver and today are worth significant multiples of their face value. A 1964 Kennedy half dollar has the same purchasing power as a sandwich 50-cent piece, but the silver in the Kennedy coin was worth over $11 as this issue went to press whereas the sandwich coin's melt value was just over 10 cents.

To the management team at Union Standard Insurance Group®, the lesson is clear: Like coins, insurance carriers may look the same on the outside, but it's what's inside that counts: especially when it comes to delivering on the promises the company makes to its insureds and other stakeholders.

The visible symbol of that commitment is the bright 1964 Kennedy half dollar that is given to every new employee on his or her first day of work.

"The coin is a tangible reminder of who we are and what we're about," says Union Standard's president, Craig Sparks, CIC. "I often give coins to agents and customers as well, and whenever I hand out a coin, I share the same basic message: 'This coin looks like other 50-cent pieces on the surface, but it has an intrinsic value that's much greater than its face value.' That's what we want people to know about our company: We may look like other companies on the surface, but we do a lot of things differently. Our stated purpose is 'Commercial Insurance, Done the Right Way, By a Company of People Who Care.' "

That purpose is shared by all 49 operating units of W.R. Berkley Corporation, an insurance holding company whose business segments are specialty, regional, alternative markets, reinsurance, and international. Union Standard is one of five commercial property/casualty insurers in Berkley's regional segment; Berkley acquired Union Standard in 1975 from the Unigard Insurance Group.

With an A.M. Best rating of A+/ Superior and a 45-year history of profitability, W.R. Berkley is a strong, stable parent for its operating units. Since its inception, the company has employed a decentralized operating strategy that allows each unit the flexibility to identify and respond to conditions in its local market.

Based in the Dallas suburb of Irving, Texas, Union Standard distributes its products through independent agents in eight states: Alabama, Arizona, Arkansas, Mississippi, New Mexico, Oklahoma, Tennessee, and Texas. The insurer has two branch offices in Texas and one in each of the other seven states, and each office is headed by a branch manager. Union Standard also offers a comprehensive loss prevention and control program that is tailored to the needs of each insured.

Seasoned team

Directing the operations of Union Standard is a seasoned team of industry veterans. President Craig Sparks's insurance career spans more than 30 years in underwriting, marketing, and management positions, and he also has experience as an agent writing large commercial accounts. Sparks joined Union Standard in 1993 and was named president in 2000.

Serving as vice president and chief underwriting officer is Keith Mitchell, an 18-year industry veteran who has held positions in marketing, production, underwriting, and management on both the property/casualty and life/ health sides of the business.

Jacquelynne Hurst, vice president of marketing and underwriting services, joined Union Standard in 1998 and has 20 years of insurance experience. She is responsible for marketing functions, agency interface, and policy services.

Jeffrey Carver, a 25-year veteran of the industry, is Union Standard's regional vice president for Alabama and Mississippi and is based at the branch office in Meridian, Mississippi. He joined the company in 1994 and has a broad background in marketing management.

Niche market strategy

Union Standard writes a full complement of commercial property and casualty coverages, including workers compensation, for select niche markets that include artisan contractors, auto repair shops, farmowners and ranchowners, fire/EMS, golf courses, hotels and motels, manufacturing, and collectible vehicles (written by another Berkley subsidiary, Continental Western Group).

"We pursue those classes of business that are in the top half of their industry," Mitchell says. "This translates into positive underwriting characteristics like proactive management, experienced employees, strong internal controls, financial stability, and favorable loss experience. Companies with these traits constitute what we call preferred risks."

Adds Sparks: "Certain businesses may fall just outside our appetite. In these cases we partner with other Berkley companies, like Berkley Regional Specialty Insurance Company and Regional Excess Underwriters, to provide a solution for the customer."

Among Union Standard's niche markets, Carver says, many are experiencing growth as the economy recovers. "The economy seems to be picking up in much of our operating territory, and that creates opportunities for us," he observes. "Some of our strongest growth right now is in the manufacturing segment, especially in Mississippi. We've partnered with the Mississippi Manufacturers Association (MMA) to offer its members workers compensation coverage as well as other property and casualty lines."

Other niche markets in which Union Standard is seeing growth, Carver says, are volunteer fire departments, schools, campgrounds, and even homebuilders in some areas. "Some of these classes are not our core niche markets; we've become involved in them through the relationships we have with our agents," Carver explains. "We always welcome the opportunity to talk with agents who have knowledge and expertise in a particular niche market. If the market is a good fit for us, we may decide to become involved with it."

Adds Mitchell: "When evaluating a new niche, we consider how we can merge our value proposition with the expertise and knowledge that both we and the agent bring to the table. We also look at the specific coverage requirements and service needs for risks in the class, and we assess the potential for us to underwrite the class profitably. We ask ourselves: 'Within this framework, what value can we bring to this market?'" Mitchell says. "If all the pieces fit together, we have a great opportunity. Our partnership with the MMA, as Jeffrey described, is a prime example of this strategy in action."

Valued partners

Union Standard works with approximately 500 agencies across its eight-state territory. "From the start, we've been strongly committed to the independent agency system, and we're proud to be a sponsor of the Big "I" 's Trusted Choice®," Sparks asserts. "Our agents are our front-line underwriters, and we rely on them to fill that role.

"We often say that the two most important decisions we make are the people we hire as employees and those we appoint as agents," he continues. "We have a group of people who are committed to a common cause and share a common vision, and we measure our success by the profitability we achieve through our commitment to that cause. When we appoint an agency, we're looking for a long-term relationship. We want agents who share our values, our passion for the business, and our focus on writing profitable niches. The 1964 Kennedy half dollar is a reminder of our shared commitment."

After all, it's what's inside that counts.

Craig Sparks, CIC, (seated foreground), President of Union Standard Insurance Group, with some members of the management team.

Members of the management team include (from left) Jacquelynne Hurst, Vice President- Marketing & Underwriting Services; Craig Sparks; Keith Mitchell, Vice President-Chief Underwriting Officer; and (inset) Jeffrey Carver, Regional Vice President.

Craig Sparks meets with Darwin E. Lucas, President of Regional Excess Underwriters, LLC.

"The two most important decisions we make are the people we hire as employees and those we appoint as agents."

-Craig Sparks

By Elisabeth Boone, CPCU