Bill Mullaney heads a $3 billion operation, MetLife’s Warwick-based personal lines property and casualty subsidiary, which insures nearly 4 million autos and homes nationwide.
It’s a profitable and steadily growing part of the company, with a 28-percent earnings jump from 2003 to 2004, to $214 million – though in 2005, profits were cut by net losses from Hurricane Katrina, estimated at $116 million in third-quarter financial statements. But as of Sept. 30, profits were on par with 2004’s.
MetLife Home & Auto employs more than 2,000 people at its two offices in Warwick. It’s also the state’s second-biggest auto insurer, with 10.6 percent of premiums, and No. 5 in the homeowners’ market, with 6.8 percent.
PBN: How have you been doing?
MULLANEY: We’re growing. We had a good year in 2005 despite significant hurricane activity; it was the most active hurricane season in U.S. history. … An important part of our success is that the fundamentals of our business are really good: the underwriting we do, the work we do in sales and in claims.
For Leaders Who Don't Have Time to Get Sick
Top performers guard their calendars, delegate relentlessly and optimize every hour of the day. Health,…
Learn More
PBN: Is your premium volume growing?
MULLANEY: Our top line has been growing, [but] not that quickly. In 2005 if you adjust for some additional reinsurance premium we had to pay, our top line is only going to grow about 1 percent. The industry right now is going through a phase where we’re in what we’d categorize as a soft market, so you’re not seeing a lot of increases in premium rates. We have been adding some new exposures [clients], so we expect to continue to grow in 2006.
PBN: How soft is the market?
MULLANEY: This soft market is a little different than what we’ve been seeing in previous soft markets. Historically, companies have been more aggressive at cutting rates in order to grow share, and this time we’re not seeing large-scale rate reductions. What we are seeing is companies taking rate reductions in specific segments they want to grow. [MetLife Auto & Home is doing this, too.] … Whether or not we’ve gotten to the point where we’re at the bottom of the soft market – I think it’s too early to tell.
PBN: How do you continue to grow the business?
MULLANEY: One of the things that we’re doing is enhancing our products. … GrandProtect is an example of that, where it brings together coverage for autos, homes, umbrella, any other scheduled personal property, into a single package with a common bill, common deductible per occurrence, and basically what it does is it eliminates any gaps that somebody might have in their coverage. We’ve got that product rolled out now in 15 states [including Rhode Island], and we expect to do another 15 states in 2006.
PBN: You’ve said a main focus is leveraging the MetLife brand name to expand your home and auto business. How does the MetLife Bank fit into that?
MULLANEY: The MetLife Bank has been a great story for us. It’s only been in business for a few years [since 2000], and already there are several billion dollars’ worth of assets in the bank [$3.56 billion as of June 30]. That’s about using the MetLife brand to attract money through the various distribution points we have. We’ve been partnering with the bank in a couple of areas to bring some of our product capabilities with some of theirs. One of the products they’re rolling out is a mortgage product, and what we’re doing is when a person gets a mortgage, if they also get a homeowner policy through us, we give them a discount.
PBN: Rhode Island’s laws and regulatory structure can make us an expensive state for insurers, and so we pay higher premiums. Do you agree, and if so, what role do you see for MetLife in trying to change that?
MULLANEY: If you look at any market, there’s always some things that you’d recommend could be done differently. But I’d say the level of competition in Rhode Island is pretty good, in terms of the number of companies that are active here. That’s the key measure you want to look at. … You have all the major players active in Rhode Island, and that competition keeps rates down. Contrast that with Massachusetts, where there’s heavy regulation, and you see a limited number of carriers that are active in that market.
PBN: How do you feel about Rhode Island as a place to do business?
MULLANEY: MetLife has got a strong presence in Rhode Island, with over 2,000 associates. We’re active in the community, and it’s a tremendous place to do business. … If there’s a challenge that the state is facing now, it’s around affordability. … We don’t have a lot of turnover, but where we do have a challenge is when we try to relocate someone from another part of the country where the cost of living may be lower. Housing prices have gone up significantly. The other negative that Rhode Island has is the level of the income tax rate.
PBN: How big an issue is that?
MULLANEY: It is a big issue. I think that when you try to attract people into the state, and you couple that with the fact that housing prices are very high, I think the combination of those two things – you have to be creative in terms of how you get employees to want to come to Rhode Island and for that to be a good experience for them financially.
