PIANJ meets with American Commerce to discuss market rollout

A relatively new player in the New Jersey personal lines market soon will celebrate the first anniversary of its initial policy written in the Garden State. Backed by a major international parent and a rich history in building relationships with its independent agents, American Commerce Insurance Co., met with PIANJ last week to discuss its plans and objectives.

Jeffrey B. Alexander, vice president of marketing for American Commerce, met with PIANJ in the Millstone Township conference room of PIANJ President Gary C. Rygiel, CIC, CPCU, ARM, CRM, AIS. Also representing American Commerce were Patrick A. Filipkowski, marketing manger, and Jennifer R. Ranft, marketing representative. They told PIANJ that the company prides itself on maintaining personal contacts with its agents and seeks to establish itself as a valuable and durable personal lines market with a balanced profile throughout the state.

American Commerce introduced itself to PIANJ members in part through its presence at the June 2008 Joint Annual Conference, and later that month wrote its first policy through independent agents here. Now it has booked several millions in premium through about 50 appointed agents, and is pursuing a strategy of balanced growth both geographically and by product line, Alexander said.

He painted a brief history of the company for those unfamiliar with its background. Started as Automobile Club Insurance Co., back in 1946 in a small town on the Ohio River, the carrier grew primarily through relationships with AAA clubs throughout the country. It was acquired in 1999 by a Massachusetts-based personal lines powerhouse, The Commerce Group Inc.

The Commerce Group's flagship company, The Commerce Insurance Co., was founded by an independent agent to address the personal auto market distress of the 1970s. Today it is the largest writer of both personal auto and homeowners in the Bay State, and has stretched its reach to become a national market. The Commerce Group has grown primarily by independent agents but also through affinity with AAA clubs in Massachusetts, making the addition of Ohio-based ACIC a natural fit. Upon acquisition, this company changed its name to American Commerce to better reflect its status as part of Commerce Group, which also has a west-coast presence.

Entry into the New Jersey and New York markets as an independent agency carrier reflects Commerce Group's strategy to expand through planned growth. Licensed in all 50 states, American Commerce currently is active in 17. In New York, Commerce Group recently acquired State-Wide Insurance Co., a Long-Island based writer focused on writing personal auto through independent brokers.

Alexander recounted the resources and the careful planning that went into the group's entry into New Jersey (a "mature market"), where it clearly intends to have a lasting and profitable presence. New Jersey is the first state where the company rolled out its new auto insurance policy, a multi-variant product that its agents say offers some unique discounts. The company clearly prides itself on the deep experience and expertise that went into developing the program for the Garden State. The Department of Banking and Insurance was "just fabulous" to work with during the filing process, Alexander reported.

As American Commerce prepared to write its first Garden State policy, its resources were further boosted when Commerce Group was acquired by a subsidiary of MAPFRE S.A., an international insurer based in Madrid, Spain. With a focus on property/casualty, MAPFRE markets through independent producers throughout the world, having achieved a dominant profile in Spain, South America and Puerto Rico.

"Building on its successful worldwide model of partnering with independent agents, MAPFRE is looking to replicate this success in the United States," Alexander explained. "The Commerce acquisition was an ideal fit for MAPFRE, both in terms of market philosophy and geographic emphasis."

Elaborating on this philosophy, Alexander said MAPFRE'S success "has been built on its relationships with its agents. MAPFRE aligns itself with its agents wherever it enters the market. We are looking, in New Jersey, to have solid relationships with our agency partners in order to have staying power. We're confident we have the products and the pricing, but it won't work without capable agents."

Asked for an example, Alexander cited the availability and accessibility of the company's business people and their desire to listen carefully and respond to agents' needs.

"Your field people really do keep in touch," agreed Paul Monacelli, CIC, CPIA, PIANJ past president. "They also send the principals reports about what is actually happening in the agency. We may think we know, but sometimes we don't know how we are doing with a given company."

"These are custom reports the team has built as a way of achieving feedback on how we are doing," Alexander replied. "We view feedback as integral to refining the product and knowing if we have the right price points or not. We try to maintain direct communication with each agent once or twice a month and we hire and maintain a field force that earns the respect or our agents.

"MAPFRE and its Commerce Group carriers also share the desire to help agents participate and sustain visibility in their communities," Alexander continued. Competing in Ohio, American Commerce is steeped in the culture of building strong agency relationships: "Our goal is to align ourselves closely with our independent agents," he said.

"We see a lot of opportunity in New Jersey, but it requires good relationships between the company and its agents. It's a delicate balance: we surely want growth, but to sustain growth we need profitable business," Alexander concluded.

Expanding in New England, American Commerce's sister company, The Commerce Insurance Co., was included in the PIA of New Hampshire Company Performance Survey for the first time in 2008. It placed among the PIANH survey's top five carriers for the following performance items: competitive pricing; agent compensation; quick and fair claims handling; speedy service and market stability.

Regarding technology, PIANJ shared results of the 2008 PIANJ Online Technology Survey with the American Commerce visitors. Alexander said the company actively is involved with vendors to make New Jersey quotes accessible through multiple-company rating technology.

Besides Rygiel and Monacelli, PIANJ was represented by Andrew Harris, CIC, CPCU, ARM, CRM, AIS, PIANJ past president and national director; and incoming PIANJ President William R. Vowteras, CPIA.—Kiehl