N.J. Insurer Proves Putting Customers First Has Its Own Rewards

New Jersey Manufacturers Insurance Group doesn’t advertise, does little self-promotion and tells its employees to put good service above growing the company.

There are no fancy corner offices, no posh boxes at sports venues and no commissions paid out to account executives when new policies are sold.

It’s not just lip service. The Ewing, N.J. company has a long list of satisfied customers who like the insurer so much some send it holidays cards. Nationwide consumer groups have given NJM top marks.

“You don’t have to take steps to hurt consumers in order to be strong financially,” said Anthony G. Dickson, president and chief executive officer of the group, which includes four insurance businesses and a bank.

The company, which is celebrating its 90th anniversary, has been nationally recognized for excellent service and low rates. Last month, A.M. Best, the national insurance rating agency, upgraded the company to its top A-plus-plus rating for its financial strength.

“If I lived in New Jersey, I would be dying to be one of their insureds,” said J. Robert Hunter, director of insurance for the Consumer Federation of America, during a recent Congressional hearing on the insurance industry.

While competitors have focused on growth and market share, NJM Insurance Co. has managed to become the state’s second largest auto insurer by belief in the tradition that they are “stewards” of the policyholder’s money.

It’s a tribute to the company’s late president, Vincent E. Hoyer, who believed a good reputation was the best way to attract customers. Even the employee training room is known as “stewardship hall.”

The company also has a unique distinction in that it has been able to thrive by offering low rates and good service in a state that has long been reviled for exorbitant auto insurance coverage.

“It’s satisfied customers having good things to say,” said Dickson, who has led the group since 1991.

To get auto insurance from NJM, a driver has to work for a company that belongs to the New Jersey Business & Industry Association. Those who previously were enrolled with the insurer or have a spouse who works for a member company are also eligible.

Other drivers may apply to get insurance through the group’s secondary insurance provider, New Jersey Re-Insurance Company.

By keeping the overhead low, NJM has been able to offer among the cheapest car insurance rates in the state. The average NJM auto policy in 2002 cost $889, compared to the statewide average of $1,028 in 2001.

The company has an unbroken record of paying out dividends to policyholders. Last year, the New Jersey Manufacturers paid out $98 million in dividends to auto policyholders, with an average payout of $153.

“Obviously, they are extremely well regarded not only by their customers but by others in the industry,” said Jack Ramirez, president of Property Casualty Insurers Association of America. “They are a well run company, customer focused and financially sound.”

Good experiences with the company is part of what attracts customers and keeps them, company officials say. NJM officials say 98 of every 100 customers choose to stay with the company each year.

The group also has also struggled with a problem most companies would envy — too much business. In the past decade, strict regulatory laws prompted more than 20 insurers to leave New Jersey amid complaints that bureaucratic red tape made it impossible to turn a profit. That left insurance companies that remained in New Jersey overwhelmed with business. Recent changes in state regulations have attracted more insurers and helped lessen the burden.

“From our perspective it would be good to see other companies entering New Jersey so we can deal with existing customers and take on a manageable amount of new ones,” Dickson said.

While it has been cautious about expanding too quickly, the company is growing. The group recently announced an expansion of its Hammonton office, more than doubling the size at the prior location. The South Jersey office now has 120 employees and hopes to add up to 50 more in each of the next two years.

In addition to its headquarters in Ewing, the group has offices in Parsippany. It employs about 2,300 people at its three locations.

While the company has certainly grown since it was founded in 1913 to provide workers compensation insurance, Dickson said the core principles that guide it have not varied.

“The mission hasn’t changed from day one,” Dickson said. “Put the policyholders and stewardship first.”