While recently going through my Rolodex (yeah, I’m that old) and getting depressed over the many agencies long gone or absorbed by bigger fish, I came across a card for Don Eve, president of Eve Insurance Agency Inc. in Flint, Mich.

When I first spoke with Don years ago, I was writing for Business Insurance, and Flint was in the news with  Michael Moore’s controversial documentary, Roger & Me.  With images of boarded-up houses and a mouldering downtown fresh in my mind, my first question to Don was something like, ”How are you surviving in such a tough market?” Given today’s economy, that question is equally valid today.

So I was pleasantly surprised when a little Googling and e-mailing showed that not only is Eve Insurance still alive and kicking, but so is Don.

“It was good to hear from you,” Don e-mailed back. “I’m semi-retired, but my son, Greg Eve, who is now running the agency, is familiar with ‘this economy.’ So I’m going to have him respond to your question.”

Turns out Eve’s longstanding formula for success is personal lines. Eve Insurance has had a strong relationship with the local teachers’ credit union for almost 40 years, and today is almost completely  personal lines, with only 4 percent of business coming from commercial p/c. Annual written premium stands at $3 million-plus and has remained stable for the past 10 years.

Greg explained that the transition to personal lines had been initially one of sheer survival. ”Personal lines had always been more than 50 percent of our book of business since my dad and mother started the agency in 1973, but by the mid-1990s, we pretty much went all personal because the better commercial carriers just weren’t looking for Michigan agency appointments in the early 1990s.”

While insurers’ appetites may have changed since then, Eve’s focus has not. They’ve found they like the stability of the personal lines market, where premiums have not been as soft as commercial renewals, which are down as much as 40 percent in the region, Greg said.

The agency’s entire book of business is cross sold — “home, auto and the toys,” Greg said. While the national average for cross-selling policies is 1.25 policies per client, Eve’s is almost at 1.8, including home, auto, umbrella and life. They’re also exploring life products and baby boomer stuff like long-term care coverage.

 But isn’t this market cornered by the direct writers? Not according to Greg. “Access to multiple markets gives us an advantage,” he said. “We share a driveway with an Allstate agent, and we’re good friends, but there is a decided difference in the market. A few years ago (Allstate) took a 40 percent rate increase, and the agent didn’t have any alternative markets to go to.” Eve’s primary carrier is Auto Owners, which controls 62 percent of their book of business, followed by Citizens, Safeco, Progressive and Great Lakes Casualty.

Although he concedes there are many challenges – including a regional talent drain and the ongoing economic problems of the Rust Belt — Greg is confident that Eve will do better than just survive the current tough economy. “In mid-Michigan, there are basically two styles of people: those involved in the medical profession, and educators. School systems still have to have employees, so that’s a stable market. You find your market niche, figure where your carriers are strong, and that’s what you market to.”

http://www.eveinsurance.com/

I just spent a fascinating morning at the Center for Research Libraries on the University of Chicago campus. I never even knew this place existed, but it’s such a comprehensive resource that the Library of Congress comes calling when it’s stumped for material.

What brought me to the South Side was a quest for rare back issues of Local Agent — the predecessor of American Agent & Broker magazine. In recognition of our upcoming 80th anniversary, we’re compiling material from the past for a special issue we’re developing for next year. The Center was able to fill in the gap for issues from 1930 to 1947, which we don’t have at our St. Louis offices.

While it’s not on par with digging up a crystal skull somewhere in Peru, there is a certain excitement in leafing through ancient publications — at least for history buffs. It’s interesting to see how our publication evolved from a black-and-white monthly of about 26 pages to its current ambitious format. (And I confess to finding guilty pleasure in the ads for mostly defunct insurers, some of which feature such cringe-inducing images as caricatured American Indians, Pullman train porters, dizzy dames, and, for some reason, one insurer whose mascot was a French poodle. Guess the “Mad Men” who thought that one up had one too many pre-lunch martinis that day.)

What was especially resonant about this stroll down memory lane, though, was seeing how many things have remained the same in our industry. The earliest issues, dating from June 1930, are replete with articles by agents who look like Guy Kibbee, dispensing sage advice on how to combat bad economic conditions (complete with NRA logo on the masthead). 

Other evergreen issues include getting the biggest bang for your advertising buck, cross-selling unique coverages (did you know there was once something called “silverware insurance”?), improving collections (a big issue during the Depression), the need for agents act as consultants to their customers, direct-mail programs, and coverage of the National Association of Insurance Agents meetings (some things never change!).

These earliest issues of Local Agent also give us a hint of how long it took for the concept of state insurance regulation and limited antitrust exemption (in the form of the 1945 McCarran-Ferguson Act) to gain traction in the industry. You can see from the magazine’s contents and editorial commentary how bad economic conditions gradually gave rise to legislative intervention — starting in 1933 with the Glass-Steagall Act and the creation of the FDIC, and the National Industrial Recovery Act, which established fair practice codes for specific industries, including insurance (although the NRA was struck down two years later by the Supreme Court).

Once again we find ourselves in tough times, and it’s interesting to speculate on whether economic conditions, pressure from the media and political posturing will result in more legislation designed to mitigate our current woes.

In my latest column in the August AAB, I write about the recent proposal by Travelers and Nationwide to establish a coastal wind coverage plan, hinging on federal legislation (drop by our podcast page at www.agentandbroker.com to hear an interview with Travelers’ Eric Nelson on the subject). No sooner was the virtual ink dry on my comments when The Hartford announced its own version of a public-private plan to address natural catastrophes, including a federal backstop for insurers.

Of course, State Farm and Allstate have their own long-standing proposal that includes a call for state and federal cat funds as backstops (see www.protectingamerica.org).

The cool thing about the Travelers proposal is that it has the blessing of both the Big I and the Council, giving it the official thumbs-up for retail agents and brokers.

All this seems to beg the question that was at the heart of the whole Hurricane Katrina fiasco — and that’s the differentiation between flood and wind losses on the standard property insurance policy.

Before its affiliation with the Travelers proposal, Nationwide made headlines by proposing an expanded homeowners policy that would include flood coverage at the same price as the National Flood Insurance Program coverages. (Meanwhile, Congress still hasn’t reauthorized NFIP, in large part because of the outcry against a House proposal that wind be added to its coverage.)

Assuming your clients own property in a high-risk coastal area, which proposal makes the most sense to you?

At a time when unemployment is putting a major drag on an already lagging economy, some unexpected news: U.S. insurance industry payrolls added 2,800 new positions from June to July, according to the U.S. Bureau of Labor Statistics. That represents an increase of more than 8,000 jobs since July 2007.

To put it in perspective, this increase happens at a time when general unemployment increased to a four-year high of 5.7%.

Reinsurance led the pack for payrolls, up 11.9% percent over last year. And while property/casualty insurers grew payrolls only 0.8% year over year, their employees remain the most highly compensated, with employees averaging $986.50 a week.

In an earlier post on this site, I asked what (if anything) your businesses were doing to trim costs during these tough times. In light of these new numbers, I’m wondering whether my assumption of across-the-board cost cutting was premature. After all, it takes money to make money, as the old saw goes, and adding a high-performing producer or CSR can be a smart investment, even in hard financial times.

So, assuming that the carriers you represent are adding new talent, is your agency thinking of doing the same?