Sense of Security
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By Chris Petersen   
smc Insurance provider Unitrin Inc. says strong communications create a feeling of safety among its agents and customers.
Insurance provider Unitrin Inc. says strong communications create a feeling of safety among its agents and customers.
Insurance is all about creating a sense of security, and Unitrin Inc. Chairman Richard Vie says there are few industries as secure and stable as insurance. “We are in very established, consistent businesses that don’t change a lot,” he says. In fact, the basic products provided under Unitrin’s brands have changed very little in 100 years. Today, Unitrin creates a feeling of security for its customers that goes beyond the simple replacement of their property, Vie says, thanks to the company’s focus on customer satisfaction, its longevity and the strength of its brands.

Unitrin was created in 1990, when the insurance and finance holdings of Teledyne were spun off into a separate company.

The company’s name comes from two of its original insurance holdings, United Insurance Company of America and Trinity Universal Insurance Company, both of which have been operating since the 1920s.

Fireside Bank, Unitrin’s consumer finance subsidiary, has been in business since 1950. “We have the luxury of having very old companies and established businesses throughout the United States,” Vie says.

With more than 6 million customers nationwide, Unitrin is one of the few mid-sized multi-line insurance providers in the United States, Vie says. The company has more than 11,000 independent agents who sell home, auto, specialty auto, health and business insurance.

A Broad Portfolio
Unitrin offers financial services under a number of brands. Kemper Auto and Home provides personal auto, homeowners, inland marine, boat owners, dwelling fire and personal umbrella insurance through more than 3,000 independent agents in 39 states. Vie says Kemper is Unitrin’s largest business, generating $1 billion in premiums annually.

Unitrin Specialty services individuals and businesses with nonstandard auto insurance through more than 7,500 independent agents in 23 states.

The company’s Unitrin Direct brand sells auto insurance through direct mail, TV advertising and the Internet to a wide range of customers. Unitrin Business Insurance provides businesses in the South, Northwest and Midwest with commercial automobile, fire, multi-peril, general liability and workers compensation coverage. Unitrin’s Career Agency Companies provide life, health and property insurance to lower-income customers. The Reserve National provides accident and health insurance to individuals and small business owners primarily in rural areas.

Strong In Many Segments
Vie says Unitrin’s diversity helps it weather slowdowns in specific segments. “I think that gives us an advantage for a company our size,” he says. With operations in many different areas, Unitrin can rely on one segment to help ease the burden of slower sales in another area.

For example, in the very cyclical property and casualty segment, “We’re starting to go into a little softer pricing cycle,” he notes.

However, Unitrin’s strategy of not keeping “all our eggs in one basket” has resulted in the company’s overall performance improving in 12 of the last 16 quarters, he adds. Unitrin’s diverse portfolio also prevents it from taking risks its competitors might take in periods of slow sales. On the life insurance side, Vie explains, most large firms have attempted to go upscale to reach the upper-income market that is mainly served by financial planners and tax advisors.

With its diversified holdings, Unitrin has been able to continue serving middle- and lower-income customers, where competition is not as fierce.

Better Communication
Vie says Unitrin gives its independent agents confidence in the company through aggressive communications.

“Because we go through independent agents to market most of our property and casualty insurance, we’re competing within that independent agency with other companies,” Vie says. “So ease of doing business is extremely important for an agency in this business.”

Vie says Unitrin communicates with its agents through the Internet, which allows the company to get them information they need faster.

“You know what the facts are immediately,” he says. The key to keeping customers satisfied is to make sure agents are satisfied, too, Vie adds. “As long as we have a satisfied agent and a satisfied customer, this gives us a significant advantage in the marketplace,” he says.

Constant Continuity
Vie says Unitrin’s solid core of experienced management and its addition of experienced young talent position it for more growth in the long-term. While competitors might send their raw recruits to “finishing schools,” Unitrin looks for employees who have already been tested. “We tend to hire people who have some experience, and you pay a little more for that, but you don’t have to do as much basic training,” Vie says.

Continuity is an important quality for an insurance provider to have, and Vie says Unitrin’s management exemplifies that quality. “When we spun off in 1990 … of the people who comprised the corporate unit, and the few we added after the spin-off, 17 years later, almost everyone’s still there,” Vie says, adding that it’s unusual for a financial company to have that degree of continuity over such a long timeframe.

“I don’t know any [other firms] that have had no turnover as a public company and been quite as successful during that run,” Vie says. He says this continuity creates the security and trust customers expect from their insurance provider, and bodes well for the future of Unitrin.

“If the same people are in the same businesses doing essentially the same thing, I think your future ought to look pretty bright,” he adds.