New Grange CEO Says Growth Opportunities Are in Existing Markets

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January 27, 2010 Wednesday 04:38 PM EST

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New Grange CEO Says Growth Opportunities Are in Existing Markets

Chad Hemenway

COLUMBUS, Ohio

Robert V. James, the new chief executive officer of Grange Insurance, referred to an old expression when talking about growth opportunities: You dance with the person who brought you.

The 13 states where the company does business, its current platform of products, and the independent agents who exclusively sell them provide the mutual super-regional insurance company with growth possibilities. James told BestWire, "We think there's a lot of dancing left to do."

"There is a lot of growth left in our existing markets," said James, also president of Grange. "There has been a lot of growth with our existing agents, without the need to add a large number of agents to our agency plan in order to grow. We have a lot of opportunity left to grow in our commercial lines business, where we tend to be on the smaller end of the market and we have a life insurance company that we are getting excellent growth from."

James said he also can see the Columbus, Ohio-based company experiencing growth in its personal lines products, where primarily the private passenger automobile segment drove 5% growth in 2009, compared with 2008. James gave much of the credit to the company's relationship with agents and said Grange has a 96% customer satisfaction rate.

"I think at the end of the day, companies that deliver value to their agents and their customers, and are financially strong, can do well even in a tough economy," James said. The industry veteran with more than 36 years of experience in property/casualty insurance said the economy will continue to be a challenge as "consumers are rethinking their spending."

James said he once competed with Grange as an employee of CNA. He also has worked for Allstate, American International Group Inc. and MetLife. Most recently, he managed Bank of America's consumer insurance, commercial insurance and reinsurance operations. Despite his experience with stock companies, which may have more of an ability to raise capital, James said mutual companies are at no disadvantage.

"Your ability to raise capital -- whether you're a stock company or a mutual company -- fundamentally resides upon your ability to earn an underwriting profit and to have a conservative investment posture," James said. "While a stock company may have an opportunity to raise capital through a stock offering, they still have to utilize that capital...and the shareholders are going to expect them to earn an underwriting profit. You have to have growing surplus to fund growth and there are a lot of ways to get it."

James became president and CEO on Jan. 18. Phil Urban, who formerly held the positions, announced his retirement last year (BestWire, May 28, 2009). He will stay with Grange in an advisory role until Feb. 26, the company said.

Grange Mutual Casualty Co. specializes in private passenger automobile and homeowners multiperil business. Some 52% of the company's direct written premium represents private passenger auto. The company and its affiliates operate in 13 states, with about 42% of the group's overall premium coming from Ohio, according to BestLink, which provides online access to A.M. Best's Global Insurance & Banking Database.

Grange Mutual Casualty Pool currently has a Best's Financial Strength Rating of A (Excellent).

(By Chad Hemenway, associate editor, BestWeek: [email protected])

January 28, 2010

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