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Regional Agency Markets

Established just five years ago, Regional Agency Markets’ (RAM) significant growth, both organic and through acquisitions, has made it a significant contributor among Liberty Mutual Group’s four strategic business units, contributing 20 percent of revenue in 2003.

During 2003, RAM effectively and efficiently completed the integration of its most recent acquisition, the $1 billion OneBeacon book of business acquired in late 2001, and ended the year with $3.4 billion in revenue, $302 million in pre-tax operating income, cash flow of $802 million and a 100.6 percent combined ratio. Contributing to these positive results, which include Liberty Northwest, a separately managed multi-line insurer, were significant price increases and disciplined underwriting.

RAM’s seven regionally branded and two specialty companies, which operate across 44 states (see map), provide personal and small-to-mid-size commercial insurance products exclusively through more than 5,000 independent agents and brokers. Each of these companies demonstrated an ability to grow profitably in 2003 by combining its local knowledge, decision-making, marketing and claims handling with the financial stability and cost efficiencies of Liberty Mutual Group.

As significant agency consolidation continues in the market, RAM’s focus on “ease of doing business” through the effective use of technology makes it an attractive insurance carrier for these larger, multi-line agencies. For example, RAM’s increasingly sophisticated agency web portals allow its agents to obtain real-time quotes, submit applications, report and monitor claims, make billing inquiries and much more — electronically over the internet. In fact, RAM agents submitted 83 percent of their small commercial business through these portals in 2003. RAM company agency portals also automate delivery of policy, billing and claims information, and they allow agents and their customers to request loss control information specific to their needs.

Also contributing to RAM’s success is an agency management model that prospects and appoints only the best agencies in RAM’s marketing territories, then promotes strong business relationships through regular agency reviews, effective planning and performance monitoring. Using this model, RAM regional company employees ensure they meet both RAM’s and the agent’s expectations. To further strengthen its partner relationships, RAM trained more than 4,500 agents on industry topics and services during 2003. Using this robust agency management approach, the RAM regional companies compete for the best business available in their marketing territories.

RAM also attributes its strong reputation to its ability to respond quickly, fairly and professionally to policyholder loss. Understanding that the events leading to a claim are often traumatic, RAM trains its employees to alleviate policyholders’ concerns, and promptly and fairly resolve their claims. This tradition of policyholder service gives families and businesses the confidence to recommend a RAM company to their relatives and friends.

In 2004, RAM will continue its strong performance in writing small-to-mid-size commercial lines, and improve its competitive position in agency personal lines. It will achieve this through strong execution of the fundamentals of agency management, disciplined pricing and underwriting, and superior customer service to both its agency customers and policyholders.

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