Conversations between Motorists and BrickStreet began about four years ago, as the leaders of each company recognized the complementary fit.
Motorists predominately offered personal, commercial and life insurance for Main Street businesses, while BrickStreet focused solely on workers’ compensation for large accounts. Each company was worth about $750 million.
“When we came together, that took us to $1.5 billion, so we doubled our net worth, and that created the financial resources to accelerate some of the investments in systems and operations that we needed to really accelerate that one-company vision,” Kaufman says.
BrickStreet became an affiliate of Motorists, which kept the policy brands separate, for now, but otherwise acted much like a merger. Workers’ compensation operations were centralized in Charleston, with other product lines run out of Columbus.
Kaufman became CEO for both companies, while Greg Burton, BrickStreet’s CEO, moved to the executive chair. The board and the 12-person executive team were blended and staffed equally from each company.
Motorists wanted to move away from its pension plan, so it offered early retirement incentives. Kaufman says this helped address redundancy, and ultimately, headcount declined by about 300 to fall between 1,300 and 1,350.
Throughout this, the full-time job of the Motorists COO was managing the integration office with teams for IT, finance, HR, and marketing and underwriting.
“We expanded the integration office about a year ahead of time,” Kaufman says. “That was good, the way we recognized how important it was, and we resourced to put some of our best and brightest on it.”
The biggest challenge was communicating transparently, as employees asked questions that didn’t yet have answers.
“We used to have clarity around, here’s where we’re at, here’s where we’re going and here’s my role,” he says. “It wasn’t as clear as it was prior to the affiliation, and it’s taken us awhile to get that clarity back.”
Invest in the future
With the most difficult parts of integration behind it, today Motorists is focused on transforming its products and the technology it uses to offer those products.
“We’ve identified five new growth channels that didn’t exist prior to our affiliation,” Kaufman says.
A strong connection with local agents remains a critical differentiator, but Motorists also needs to invest in technology platforms, data and artificial intelligence.
“How do we plug in some of those innovations in a way that complements the relationships and service and doesn’t replace it?” he says.
BrickStreet already had state-of-art technology for workers’ compensation products. That enabled Motorists to focus elsewhere.
“The one good thing about bringing two organizations together, you’ve got abundant talent and expertise,” Kaufman says. “So, we’ve really used that to accelerate the path we were on. The system we’re rolling out to move commercial lines and personal lines to is probably two years ahead of schedule.”
The two companies also are very committed to doing the right thing, he says. This includes giving back to the community through well-funded corporate foundations.
BrickStreet supports West Virginia-focused initiatives, while Motorists is involved with the economic development of its Discovery District neighborhood. For example, it was a lead supporter of the new Washington Gladden Social Justice Park.
Kaufman says Motorists recently broke ground on townhomes adjacent to Topiary Park. The project, under the management of a subsidiary, MIG Realty, is scheduled to be completed around May 2020.
“These townhomes we’re building are just the next step. We had this footprint of parking lots and we thought that we could invest in them and continue the transformation of the Discovery District,” he says.
The company had previously built a data center in New Albany, but this is a very different type of project.
“Just like with any development project, we’re learning,” Kaufman says, adding that getting construction under way took longer than expected.
The company also may greenlight more development.
“We’ve got additional surface lots that don’t abut to the Topiary Park,” he says. “When we authorized this, we actually looked at a broader plan, a three-phase plan, and thought, ‘Well, let’s start with this and get a sense of the experience and how close we come to realizing our objectives. And then as this moves forward, we’ll make decisions on some of the other plots of land we have.’”