PHLY- a Carrier with Community at its Heart

Philadelphia Insurance Companies (PHLY) has a history dating back 60 years and has grown into one of the biggest carriers in the non-profit sector.?

It became part of the Tokio Marine Group in 2008 and today writes a broad range of commercial property and casualty insurance with a particular focus on small-to-medium sized businesses. It has more than 2,000 employees with specialist expertise in 120 niche markets.?

Here, John Glomb, President and CEO of PHLY and Executive Officer of Tokio Marine Holdings, discusses what makes PHLY unique and what will further strengthen its client relationships over the next 60 years.?

Partnership approach to distribution?

As a specialty insurer, John emphasises the importance of dealing with specialist agents. “One of the things that’s unique about PHLY is our distribution model. We trade with preferred agents and about 250 of these agents account for almost 70% of the premium that we write.”? ?

The rest of the business comes from a wider pool of around 5,000 agents, and over time many of these smaller producers step up to preferred status. In short, it means the majority of business comes from specialist agents, serving clients in well-defined niches, and this all supports PHLY’s ability to act as a specialty carrier supporting niche markets.?

“I will get on the phone with any agent, and I know all of the team here will do the same. Some people prefer to give difficult news to the agent and leave them to deliver it to their client. But I think it’s a much healthier dynamic if we’re involved and are prepared to discuss and negotiate our way through these situations. It’s about building trust between all three parties and truly partnering with our agents.”?

John says PHLY enjoys retention rates of more than 90% and he believes the personal nature of the relationship with agents and clients plays an important part in achieving this.?

Current challenges?

As the leader of a major property insurer, John always has an eye on the weather, while his concerns around the casualty market relate largely to the ongoing impact of legal system abuse reform, also known as social inflation.?

“Legal system abuse reform is absolutely something that’s going to continue to challenge our industry,” says John. “In the casualty classes of business that we write, there really is no-one that’s immune from it.”

Increasingly, he says insurers face liability limit demands from claimants and that if these are rejected and the subsequent legal case is lost, their liability can become unlimited. This is having a knock-on impact on the cost of reinsurance and is forcing carriers to think carefully about their risk selection and pricing models.

PHLY has been equally proactive in mitigating some of its other exposures. Changing weather patterns are a huge issue. “Each of the past seven years have exceeded the 100-year average for catastrophic storms. If insurers don’t adjust the way they look at and price risk, they’re going to be chasing their tails for years to come.”?

In addition to enforcing precise risk management and underwriting criteria, John says PHLY pays for the provision and installation of temperature and water sensors at insured properties. The sensor warnings enable policyholders to take immediate action, minimise the size of losses and reduce the impact they have on their facilities.?

PHLY has also used technology to transform the performance of its commercial auto book of business. It’s installed more than 65,000 telematics devices in vehicles which provide data on driving styles, usage times and mapping.?

The insights generated from the data have enabled clients to make their fleets safer and more efficient and allowed PHLY to improve its loss ratio by more than 10 percentage points.?

Stronger together?

It’s been 15 years since PHLY became part of Tokio Marine Group. John is clear on the benefit created by the international profile and financial strength of PHLY’s parent. But he says it’s the relationships with other Tokio Marine companies that really delivers opportunities for agents and insureds.?

“If we don’t have particular expertise in a line of business, we will either introduce our agents to one of our sister companies or we will partner with them to come up with a product that offers the required solution.”

This approach adds value to agents and insureds and also makes it possible for PHLY to expand its book of business in a number of areas.?

John highlights cyber liability, where PHLY has partnered with Tokio Marine Kiln as one example of this approach. Tokio Marine Kiln reinsures a portion of PHLY's cyber liability product, and the two companies also share information to enhance coverage and service, and better support clients.

Offering another practical example, he shares is collaboration with Tokio Marine Highland (TMH) on a flood insurance program. The PHLY Private Flood Program was launched in 2012 in support of the existing PHLY National Flood Insurance Program and other niche product offerings.?

TMH has been an industry leader in private flood insurance for three decades. It acts as a managing general underwriter for PHLY, offering comprehensive primary commercial and excess flood solutions in 49 states.?

John says the ability to tap into Tokio Marine’s global expertise and offer specialist options create significant value for PHLY’s producers and customers and strengthens its agency relationships. Global Tokio Marine partnerships benefit all stakeholders. ?

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Centred on culture and community?

Another central part of PHLY is its purpose driven mission that sits at the centre of PHLY’s culture.?

The insurer is the market share leader of its business in the human service sector. PHLY is the largest insurer in the non-profit and human services sector and has worked hard to develop its connections with these communities over the years.?

“Charitable causes are part of our DNA,” says John. “We established a foundation 10 years ago and it supports everything from children’s hospitals to children’s scholarships. We also set aside $250,000 each year and ask employees to suggest causes that are very personal to them for us to support.”?

John believes this side of the business is just as important as its focus on being an agile and disciplined specialty insurer and plays a huge part in building the team spirit on which the carrier prides itself. Culture is part of every training program in the business, and this ensures it stays fresh, front of mind and relevant for everybody.

And employees buy in. Their feedback puts the company on Business Insurance Magazine’s list of the Best Places to Work in Insurance every year since 2010. In each of the past 14 years, The Philadelphia Inquirer has named PHLY in its annual “Top Workplace” listing and for the past two years it has ranked in second position overall.?

For John, this speaks of a culture that’s both evolving and growing stronger. “We refer to ourselves as TEAMPHLY and that’s everything we do from supporting one another and doing whatever it takes to help clients, to working together to produce the right business and giving back to the communities in which we live.” ?