COVER STORY – Ahead of the curve – Acuity bursts the insurance industry’s buttoned-down image
Albert Einstein may have famously asked, “If a cluttered desk signs a cluttered mind, of what, then is an empty desk a sign” of? In Ben Salzmann’s case, it’s the sign of a creative, innovative man looking to shake up the insurance industry.
Salzmann’s desk is scary clean. “If someone gives me something to look at, I get right through it and return it as quickly as possible,” says the president and CEO of Acuity, a Sheboygan-based firm covering 20 states.
But that doesn’t mean Salzmann’s office is empty – its shelves are filled with books, annual reports and other documents that he’s able to quickly find. “Innovation and discipline are keys to our company’s success and it drives us to continually get better.”
That drive is paying off. Acuity’s sales premium increased 8.1 percent to $63 million in 2011 and its combined ratio – which is comprised of the claims ratio and the expense ratio — was 9.5 points more profitable than the industry. Earlier this year, the company announced plans to hire 50 new employees at its headquarters and throughout the 20 states where it does business.
Those new employees will join what is recognized as one of the best places to work in the country. Acuity has won numerous national awards, including Entrepreneur’s Great Place to Work 2011 Best Medium Workplace Award.
“And that’s against everyone … even some software companies where they have all of these different things going on, like riding a scooter through the office. That we’re able to compete against that and come out ahead really says something,” says Wendy Schuler, vice president of finance.
Setting and Raising the Bar
Webster’s dictionary defines the word acuity as “sharpness or keenness of thought, vision or hearing,” which is what company leaders were looking for when they changed its name from Heritage Mutual Company in 2001.
And it’s something that’s played out every day at the property and casualty insurer.
“We drive innovation into everything we do,” Salzmann says.
Whether it’s developing new products, embracing technology, redefining workplace communication or figuring out new ways to ensure employees and agents feel valued, Acuity does what it can to set itself apart from the competition. And that competition is fierce. Not only does it compete against traditional national firms such as State Farm Insurance and Liberty Mutual Insurance, it also competes against Internet upstarts such as Geico and Progressive. Then there are smaller, regional firms like West Bend Insurance or Secura Insurance.
Salzmann says Acuity has an advantage over firms like Progressive, which only focus on one product – auto insurance – while the Sheboygan firm can provide a full line of products for both individuals and businesses from auto, home and life coverage to workers’ compensation and liability insurance for businesses.
Besides competing for customers, there’s also intense competition for agents to sell their product. In insurance, some agents work exclusively for a nationwide company, such as American Family Insurance, which is based in Madison, while others are independent agents and can offer customers products from a wide portfolio of insurers. Acuity falls into this second category.
Communication – especially with its 5,000 agents – is an integral part of the company’s success, says Wally Waldhart, Acuity’s vice president of sales and communication. Twice a year, top company leaders go out and meet with agents across the country to answer questions and to educate them not only about what’s happening with Acuity but with the insurance industry in general.
“One main difference is that we educate our people. No other carrier in the country has provided more continuing education credits to its agents,” Waldhart says. “We also provide stability to agents. Today, so many carriers have merged, gone out of business or dropped lines and agents spend a lot of unproductive resources moving their books of business.”
Since 1982, Dave Ademino has sold Acuity products and says the company delivers on its promises something he – and his customers – appreciate. There’s something else that sets the company apart: they are fun, he adds.
“Their marketing really sets them apart. Insurance is such a buttoned-down industry, but they come up with these great annual reports and promotions – like last year we received a box of chocolates – that helps break through the shell that insurance is this boring industry,” says Ademino, who owns Ademino & Associates in Kimberly.
Besides the fun, Acuity invests heavily in technology, which Ademino says helps him better serve his clients by offering the latest technology that keeps him up-to-date on customers and any claims they may have. “They are an extremely well-run company and help me provide my customers with a great product.”
Acuity received 53 technology awards from ACORD (Association for Cooperative Operations Research and Development) during the past 12 years as well as being named one of the Information Week Best 100 Technology Companies for the past eight years in a row.
Ademino also appreciates the annual education programs to help stay updated on the latest industry trends. By the way, all Acuity employees receive the same information given to agents and company leaders often have town hall meetings or lunches with groups of different employees to make sure the communication keeps flowing.
Waldhart says Acuity also differs in the way it does business by understanding that its sales support its underwriting – not the other way around. “We don’t go out there with any stated growth goals to our underwriters because they are then forced to make some not-so-good decisions,” he says.
For Salzmann, making good, solid decisions is integral in what he does every day. During the recent economic downturn, he was able to keep Acuity going – and growing – through discipline and following its underwriting guidelines. That also includes empowering Acuity underwriters to “just say no” to unacceptable risks, Schuler says.
“We focus on writing the best business and year after year, that sinks in and you continue to grow,” he says. “If you’re writing something just to write something, that’s not going to work. We succeeded because of Ben’s vision and sticking to it.”
In 2011, new state expansion generated $200 million in income.
“By staying true to our mission, we now see a huge potential to grow,” Salzmann continues. “Not only are we growing thanks to the economy, but we are also growing our footprint and expanding into more states. I think it says something that we were able to keep at it and grow in this kind of economy without growing into new states. Now, think what will happen as we move into new states. The potential there is huge.”
While Acuity plans to hire 50 people initially, Salzmann thinks that could just be the tip of the iceberg. First up is the addition of underwriters and processors and once they bring new business online, there will be the need for additional help in claims. And then eventually the need for business support employees.
“It will be measured, well-planned growth,” he says.
The place to be
During the economic slowdown, the company never did layoffs, kept giving raises and made 401(k) contributions. That kind of dedication along with a whimsical air – for example there have been special employee activities such as bringing in a mechanical bull, creating personalized Wheaties boxes for employees or encouraging employees to roller skate around the spacious headquarters – helped the company receive multiple workplace honors.
In addition to winning the Entrepreneur Great Place to Work Award as the best middle-sized employer for the past two years – it has also been among the top five each of the past eight years – Acuity received a top 20 employer award from AARP for the past six years and a Top 10 Leadership Development Award from Executive Excellence Publishing for the past two years.
The more than 600 employees in Sheboygan work in an expansive 400,000-square-foot building that sits on 100 acres of land just off Interstate 43 (Acuity has about 200 employees who work off-site in their own homes or at regional offices). In addition to traditional corporate headquarter amenities, such as an onsite fitness center (with free massages) and café, there’s also a torture chamber. Yes, a torture chamber. After a visit to Europe, Salzmann was inspired to create a small room filled with a couple of chains, a replica of the “rack” and plenty of promotional materials. He jokes that it’s “torture” for employees to go in and get items such as hats, golf shirts and more to give to clients. “It also definitely serves as a talking point,” he says.
The light-filled building is full of stunning artwork, including seven hand-blown glass starbursts by artist Robert Kuster suspended from all three galleria ceilings. The collection is called “The Seven Sisters” after the Pleiades star collection in the Taurus constellation.
“At the end of the day, it’s just a place you feel good about working at,” says Schuler.
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