While some insurers that don’t operate on a national scale dislike the “regional” tag being applied to them, Terry Cavanaugh embraces it.
“‘Regional’ is just another way of saying that you’re specialized,” says the president & CEO of Erie Insurance, which writes over $4 billion in premiums in the 11 states and the District of Columbia where it does business. “And a lot of bigger insurers are trying to be ‘specialized’ now.”
Cavanaugh also believes Erie’s size gives it a distinct leg up in what he sees as an increasingly crucial competitive differentiator for insurance companies: great customer service, especially the speed and personal touch with which claims are handled.
“Consumer expectations around service continue to grow across all businesses,” he says, but the insurance industry often struggles to impress its clients.
For its Auto insurance customers, Erie now uses several preferred facilities for executing repairs, which “gets [policyholders] in first and out faster,” he says. It’s a practice Cavanaugh projects will be more commonplace in the years ahead as carriers strive to become more consumer-focused.
Another big edge Erie enjoys, he says, is its ability to make underwriting exceptions, one factor that contributes to the company’s impressive 92 percent retention rate.
“The larger an insurance company becomes, the less personal it becomes,” says Cavanaugh. “One point I try to emphasize to our people is that a great brand knows how to make an exception without sacrificing the integrity of the organization—whereas I think other [large carriers] would say, ‘Too bad, we’ve got millions of customers, and we can’t treat you any differently.’”
Making the occasional exception “is not only the right thing to do, but it’s a competitive advantage that we have. We can be more strategic in our thinking in terms of building a business,” he says.
So go ahead and use the “R” word when referring to Erie, because in Cavanaugh’s view it’s no indication of its outsized abilities. “We believe we have the ability to outperform anyone in our market,” he says.
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Shawn Moynihan
Shawn Moynihan is Editor-in-Chief of National Underwriter Property & Casualty. A St. John’s University alum, Moynihan has earned 11 Jesse H. Neal Awards, the Pulitzers of the business press; seven Azbee Awards, from the American Society of Business Press Editors; two Folio Awards; and a SABEW award, from the Society of American Business Editors & Writers. Prior to joining ALM, he served as Managing Editor/Online Editor of journalism institution Editor & Publisher, the trade bible of the newspaper industry. Moynihan also has held editorial positions with AOL, Metro New York, and Newhouse Newspapers. He can be reached at [email protected].
