Encova Mutual Insurance Group—the new brand of Motorists and BrickStreet—launched last month.
IA talked with Encova CEO Dave Kaufman to learn more about the affiliation of the two companies, the strategy behind the new brand, and what the carrier’s expanded product lines mean for agents and customers.
IA: Before we talk about the new brand, can you walk our readers through the affiliation of Motorists and BrickStreet and the changes that have occurred in the past two years?
Kaufman: Before this rebranding, The Motorists Insurance Group consisted of 16 companies. It's an affiliation model. We're a mutual owned by the policyholders and then bound together through a reinsurance pooling agreement. BrickStreet joined the group two years ago.
It wasn’t really a merger or an acquisition because we're owned by our policyholders. We called it an affiliation of equals because we complemented each other strategically. BrickStreet was a workers comp-only writer. It did about $400 million of workers comp in 12 states. Motorists was a personal lines, commercial lines and life insurance company and did about $700 million of volume. At Motorists, workers comp was probably the smallest line of business.
When we brought the two together, Motorists got state-of-the-art workers comp capabilities, another $400 million of premium and then another $750 million in surplus, so immediately the group went into a whole another level financially. For BrickStreet agents, since BrickStreet was just a monoline carrier, Motorists provides the commercial lines package, so now those agents could round out accounts. If you're an agent that represented Motorists, all of a sudden you went from limited workers comp capabilities to the best that's out there, so you could round out the accounts and really change the commercial lines appetite in a good way.
How will the new offerings help the company and your agents grow?
We've identified new growth channels for our agents as we've come together. One of them was taking just the monoline workers comp capabilities of BrickStreet to what was Motorist agents, so often they can write workers comp in big classes of business that they otherwise could not. The second thing was taking Motorists packages to the workers comp clients of BrickStreet, and then the third thing kind of came with the systems. We rolled out a complete digital offering of both the commercial lines package and the workers comp solution.
The last growth area is what we're calling strategic accounts. We're expanding our underwriting appetite for commercial lines, such that we're now writing larger classes of business than we were prior to the affiliation.
As you’ve gone through this affiliation and have now arrived at this point where you're under one brand, tell me a little bit about how you arrived at this name.
When I looked internally at our employees with those 16 companies, we probably had six different email address domains. We had some companies identifying with Motorists, some with BrickStreet, some with Iowa Mutual and so forth. We wanted to get one identity, one internal team. Now we've got one name, one mission, one set of values, one culture. Externally, agents had recognized Motorists with certain markets and BrickStreet with certain markets. What we're offering now is much broader, so we also thought to get clarity in the market, we needed a new name. The challenge was there was equity in the existing names.
How did you go about choosing the new name?
It's taken almost two years and we've been talking openly with our agents. They all agreed, yeah, at some point it makes sense to have a new name—just don't be in a hurry. We looked at three options. First, could we just use one of the corporate names we already had and reinvent it? Second, could we mash up the two names, Motorists and BrickStreet, in some way? Third was just come up with a new name. We opted for the fresh start.
Another challenge is getting the digital footprint, getting the URLs. Now we've got the trademarks, the digital footprint for Encova. Everything's going to go to Encova Insurance, encova.com and we're finally getting all 16 companies under one digital footprint.
Where did the name Encova come from?
We thought we surround our agencies with coverages and we do the same thing with our policyholders. The word that kind of came to mind was encircle—that is the “en” in Encova.
Then the “cov” is for our broad coverage. The “a” is for agent. We're committed to independent agents—that's the only way we'll ever distribute our products.
How did you look at your distribution model in this transition?
We believe everybody needs that independent agent. That professional, that local expertise, that trust, are so critical—especially in commercial lines. We just believe in that model. We want the agents to be an extension of us, so then it's a matter of who's your customer. We define the customer as the independent agent, not the policyholder. When you look at designing your systems that interface with your agency plant and then make it seamless with their clients, that's a little bit different than to customize your systems directly to the policyholder. What we're trying to do is we want to be the very best at interfacing with our agents and creating a seamless offering to their clients.
What else has changed in this transition?
At one time, Motorists was probably two-thirds personal lines and a third commercial lines. When I look at the independent agent distribution, they dominate about 80% of the commercial lines market, maybe 30% of the personal lines market. My thinking is, well, if we're really positioned and aligned with independent agents, our portfolio should mirror that. After this affiliation, we’re at 75-80% commercial lines and 20-25% personal lines. Even our portfolio, and now product line, reflects our distribution force. It’s a huge shift from being two-thirds personal lines to being over two-thirds commercial lines in a short timeframe.
That's part of the naming, too. The Motorists name was viewed as personal auto, and that's such a small portion of what we do now. Getting the Encova name out there was saying, wow, we’re really a super regional commercial lines carrier at this point.
Katie Butler is IA editor in chief.