Jewelers Mutual Turns 90

Jewelers Mutual Insurance Co. (JM), the nation’s only insurer specializing in jewelry, marks two milestones this year. It’s 90 years since the company was created in the back room of a Wisconsin jewelry store, and 50 years since it began offering personal jewelry insurance to consumers.

Today, JM insures close to 40% of the U.S. jewelry industry—some 10,000 businesses (retailers, wholesalers, manufacturers, appraisers, and other jewelry-related businesses)—and more than 120,000 individuals’ jewelry, worth over $1 billion. So there was a celebratory mood in mid-July during festive events marking these anniversaries at JM’s headquarters in Neenah, Wis., at a gala dinner attended by trade and civic leaders (July 15), and during JM’s annual policyholders meeting (July 16).

“Celebrating a milestone such as our 90th anniversary is truly exciting, especially since statistics show a vast majority of businesses never make it beyond a few years,” said Ron Harder, JM president since 1982, in an address to policyholders. “Building on a solid foundation of purpose and meeting the ongoing needs of our policyholders [is what] has sustained the viability of Jewelers Mutual.”

Growth. That viability was apparent in 2002. JM’s premium revenues rose 29%, almost three times more than expected, while net income rose 48% to $6.8 million. Harder attributes JM’s 2002 gains partly to circumstances in the U.S. insurance industry after the Sept. 11, 2001, terrorist attacks. Many competitors raised premium rates substantially—Jewelers Mutual didn’t—while others closed or got out of jewelers block insurance to concentrate on their core businesses.

But 2002’s strong showing also was the fruit of adjustments in JM’s marketing. After years of slow growth, at the end of the 1990s the insurer became more aggressive in seeking business and saw sales rise 11% in 2000, 16.8% in 2001, and 29% last year.

That isn’t all retail business. Wholesale and manufacturing accounts grew from 14% of its business 18 months ago to 19% now, while JM’s personal jewelry business has grown 15% or more annually for several years.

Though premiums written for 2003’s first half top those of 2002, Harder didn’t expect a repeat of last year’s impressive results, because some competitors are returning to the jewelry insurance market, and new players are making an appearance, too. Still, he anticipates a 12% gain by year’s end.

Fired up. The nation’s largest jewelry insurer actually was founded to provide fire insurance. In 1913 115 Wisconsin jewelers—backed by the Wisconsin Retail Jewelers Association and the American National Retail Jewelers Association (now Jewelers of America)—formed the Jewelers Mutual Limited Fire Insurance Co. of Wisconsin. Within a decade, it had 2,500 policyholders in 44 states.

In 1948 (the same year it installed its first computer, an IBM punch card machine) the company began offering block insurance to protect jewelers’ inventories from crime losses. In 1952 it changed its name to Jewelers Mutual Insurance Co., and a year later added personal jewelry coverage for customers of its policyholders. Other milestones include reaching $1 million in annual premiums (1969), adding liability coverage (1973), being licensed in all 50 states (1976), moving its headquarters to 28 acres in Neenah, Wis. (1980, expanded in 1998), offering computerized premium quotes (1986), adding an insurance policy for manufacturing jewelers (1987), creating the first of its store management videos (1995), and launching its Web site, jewelersmutual.com (1997).

JM still offers fire insurance, but during nine decades it has added a significant variety of coverage for jewelry businesses, from windstorm to shipping to equipment breakdown to employee practices liability. Over the years, however, crime has become a major focus. In 2002, for example, 73% of claims it paid were crime related.

Crime fighter. To help prevent and reduce losses due to crime, JM became a leader in safety and security education for the jewelry and insurance trades, starting in 1961 with security guidelines for policyholders (e.g., light areas around safes after hours, install iron grilles on back doors and windows). In 1969 JM began requiring jewelers to have alarm systems to qualify for coverage and instituted a camera surveillance program in 1974. Tougher security requirements—such as better safes and alarms and more use of locked-door buzzer systems—came in 1981, when the company also began lobbying for tougher prison sentences for criminals.

In 1980 JM began producing its award-winning loss-prevention videos, each on a specific crime. Jewelers use these films (now numbering five) for personal or group training, security meetings, and association programs. Other groups such as police departments, security firms, and schools screen them as well. Since 2000, JM has distributed some 7,500 security videos.

In 1987, JM began enrolling its jewelry business policyholders in the Jewelers’ Security Alliance, a significant move that has helped policyholders cut losses and helped JM hold down rates. More recently, JM joined JSA and other industry leaders in lobbying for tougher crime legislation, enforcement of immigration laws, and funding to help the FBI catch those who prey on the jewelry trade. JM staffers also regularly conduct programs and training on crime risks for jewelers’ groups around the country.

The effects of these efforts were evident by the 1980s, when loss claims began dropping significantly. Since then, JM has been able to reduce premium rates in various areas, give premium credits to policyholders who didn’t have a loss for a period of time, and periodically declare dividends for its insured jewelers when losses were lower than expected (and other financial criteria met), as it did in 1995, 1998, and 2000. “Our focus on loss prevention has certainly impacted criminal activity in this industry, saved our policyholders’ assets, and reduced the frequency and severity of the losses we see,” says Harder.

Unchanged … and growing. While the focus of JM’s loss coverage has changed since 1913, other features haven’t. The company is still owned by its policyholders, and jewelry business leaders make up the majority of its governing board of directors—the only insurance firm with such a ratio.

JM’s headquarters are still in its birthplace, Neenah, Wis., two hours north of Milwaukee. Its 165 full- and part-time employees work in a three-story facility that includes an employee fitness center, a 100-seat training center, and the Jayem gem and mineral gallery, which is open to the public.

The company is licensed in all 50 states (represented by 350 insurance agencies and more than 500 independent agents). The jewelry industry represents 79% of its business; the rest is personal jewelry insurance. A.M. Best, the insurance industry’s financial rating service, grades JM as “A+ (Superior)”—a measure of its financial stability and recognition. Only 10% of U.S. insurance firms have earned the “A+” rating.

Two other recent awards indicate JM’s local and national standing: In 2002, it won the “Champion of Industry” award, a national recognition honoring excellence in business practices, integrity, ingenuity, and proven leadership within a company’s industry. And the local Chamber of Commerce named JM its “2003 Business of the Year” for service, business performance, and community volunteerism.

Looking ahead, Harder says JM will continue “looking for ways to enhance coverage, write new business, strengthen our employee talent, and grow our presence in the jewelry and insurance industries.”

Upcoming projects, he notes, include “utilizing technology even more effectively, to give our customers and agents direct access via the Internet to our databases,” enabling them to submit applications, look at accounts, and review coverage. Online applications for personal jewelry coverage also will become easier and quicker.

Another goal is topping $100 million in premiums by 2006. That figure was $82 million last year and might approach $90 million this year. Meanwhile, a new loss prevention video is planned for 2004. Jewelers Mutual is considering offering its films in DVD format, too, as well as putting a short version of the new film on its Web site.