PRESIDENT’S MESSAGE

Our story begins in 1919 when times were changing fast. Farmers were using fewer horses to pull their harvesting machines, and more were using steam-powered harvesting equipment. They accomplished more, much faster, at harvest time, with their new machinery. While farmers were not required to buy workers’ compensation insurance for machinery operators, they understood the benefits of having the coverage and were interested in purchasing the protection. The coverage was offered by only a few large insurance carriers and also by state-managed workers’ compensation funds. Many farmers thought that workers’ compensation rates were too high, and that safe operators of steam-powered farm equipment would sustain very few accidents, which they rightly believed should qualify them for lower rates.

Our company’s founders, who were Pennsylvania farmers and owners of farm equipment dealerships, banded together, and raised the $50,000 required by the Pennsylvania Insurance Department to incorporate their own mutual insurance company. The incorporation became official on Jan. 6, 1919. After our company began its insurance operations, we offered far lower workers’ compensation rates to farmers than the rates offered by other insurance carriers and by the Pennsylvania state workers’ compensation fund. We operated profitably from the get-go, and immediately began to grow.

100 years later, we continue to respond to the dynamics of our customers’ ever-changing insurance needs. Still innovating. Still providing outstanding value and service to our customers.

Throughout 2019, we are sharing stories from our 100-year history with our employees and agents, using snippets from the past to illustrate how the innovativeness of our founders and their fierce dedication to their customers are qualities that carry on today. We remain a vibrant, innovative, resilient and personable company.

Vibrant: Talented, energetic, engaged employees

Our Human Resources Division is focusing on talent acquisition and development. Companies throughout our industry compete to recruit top talent for open positions, and then to retain and develop newly hired employees. With the addition of new skill sets in the department, Human Resources can partner more strategically with managers and supervisors throughout the company to help plan for current and future workforce needs, and ensure a focus on more robust talent development. A 2018 employee engagement survey yielded very strong results, measuring an 83 percent engagement rate, compared to an average ranging from about 64 to 67 percent at other companies. We are creating employee engagement plans to help keep our engagement levels high.

Innovative: Anticipating change and innovating as we seize new opportunities

The emergence of new risks such as ride sharing (Uber/Lyft) and home sharing (Air BnB), along with the development of an on-demand economy, have created new challenges and opportunities for the insurance industry. Traditional insurance carriers are finding innovative ways to elevate product offerings and service experiences to attract and retain customers. Many insurance carriers are partnering with technology companies that develop innovative approaches to meet the rising expectations and changing needs of customers. Our company has formed a team to track start-up companies that are providing innovative and highly automated alternative insurance products and services. The team’s goal is to study and consider adopting the best ideas that might prove themselves after these start-ups test them in the market.

We recently partnered with a software vendor to deploy robotics process automation (RPA), to automate various tedious, repetitive tasks. During 2019, we will deploy RPA in personal lines processing, which will increase our processing efficiency and allow employees to focus their skills on more valuable and rewarding tasks. The farmers who founded us in 1919 would be baffled by the technology that surrounds us today. But they would recognize our embrace of innovation as a characteristic that represented their own innovative spirit.

Resilient: Staying strong, growing and making smart decisions

Our financial security allows us to help our customers feel secure. We have stayed strong for 100 years, weathering The Great Depression, World War II, various recessions and dozens of catastrophic storms, including hurricanes Florence and Michael in 2018. We are very pleased with the quality of our book of business and our financial security. Click the financial highlights link to see more information about our 2018 performance.

Our affiliated company Partners Mutual Insurance, operating in Wisconsin and Iowa, continues to grow. To further facilitate commercial lines growth, we introduced our new policy administration system in Wisconsin and Iowa in 2018, and have gathered positive feedback about the new system’s ease of use. We will begin to introduce the new system for the balance of our states beginning late in 2019, with the conclusion of the introduction in all our states in 2020. As the largest technology investment in our company’s history, the new system will facilitate growth and efficiency.

We are creating a culture of analytics to inform our decision making with objective data. Many companies focus their analytics work only on underwriting, but we will apply analytics throughout our organization. We find that as we use analytics to make better decisions and in the process of answering questions, we discover additional questions to investigate and solve. Our aspiration is for all business units to collaborate with our analytics function to make more agile, data-driven and fact-based business decisions.

Personable: Creating a superior customer experience

We created our Customer Experience Division in 2018 by bringing together business units on the front line of customer interactions. Our goal is to improve processes and systems to ensure a consistently superior customer experience across all touchpoints that customers – agents and policyholders – have with our company. As one of the four pillars of our corporate strategy, Customer Experience weaves into everything we do as we bring the voice of the customer to the forefront of the organization.

This new division started its work by conducting more than 60 interviews with employees at all levels, and also with agency staff, to measure perceptions about our current customer experience delivery, to identify areas for improvement, and to define and codify what we mean when we commit to delivering a superior customer experience. Subsequent research indicated that we have opportunities to shift our focus from internal operational efficiencies and processes to a transformational customer-experience orientation. Our research also indicates that although we are doing well in our digital maturity, we have room to improve from a customer experience perspective.

Early in 2019, we conducted extensive interviews with policyholders who had experienced a personal auto claim. The interviews resulted in valuable insights into potential enhancements to the claims customer experience. Recent tactical enhancements to the claim journey have included real-time claim status alerts that push information by email or text to policyholders at each significant step along the claim journey. We are also pilot-testing two-way texting between policyholders and claim adjusters. And we have expanded the hours of our Customer Contact Center.

We define superior customer experiences as effortless interactions that are personal, respectful and responsive. Looking back to the values of our founders in 1919, we see the same emphasis on the customer. As customer expectations change more rapidly, we will continuously develop enhancements to remain externally focused on providing superior customer experiences.

100 years of helping people feel secure and making life better when bad things happen

We thank our employees and agents, many of whom have been with us for a significant percentage of our 100-year history, for the dedication and service-orientation that have contributed to our success.

Our founders were initially concerned about the emerging coverage needs of customers who operated steam-powered equipment. Today, we analyze opportunities and risks associated with autonomous vehicles, drones, artificial intelligence and so many innovations that our founders never could have envisioned. What they did envision set us on a path that we continue to follow today and into the future, as we deliver on our promise of protection: We help people feel secure and make life better when bad things happen.

Christine Sears, CPCU – president & CEO