A Job to Do and a Job to Keep

A Penny Saved is a Penny Reinvested in Resilience

In March of 2020, the global COVID-19 pandemic struck the United States.  As offices around the country went dark and states went into lockdown, our entire focus was on protecting the health and safety of our greatest asset, our people—the associates, independent agents, and policyholders who make The Cincinnati Insurance Companies what we are.

We were confident that we could weather whatever came next financially. That allowed us to focus on what the moment demanded, helping our associates navigate the tumult together—just as we had during the Global Financial Crisis a dozen years earlier, along with other downturns of the past. In tough times, we don’t break character and make shortsighted moves. We stay steady and rally.

Unflappable in the Face of Uncertainty

On March 11, 2020, our CEO Steve Spray was out to dinner with our top management and agents ahead of an annual sales meeting in Texas. “That was the night that the NBA pulled the players off the court and canceled the game—and we thought ‘wow, this is getting real,’” remembered Spray. The meeting was called off, our team flew back to Cincinnati, and our company immediately transitioned to working from home.

“We were built for this,” said Spray. “We have one headquarters here in Cincinnati with about 3,500 associates. But we had another 2,000 field associates across the country who were living and working in the communities where our agents are—as they had been since 1950.”

While other companies struggled, our transition to remote work was a flip of the switch. Headquarters associates followed the example set by our field associates. We continued writing policies, collecting premiums and responding to claims with signature service from the safety of our homes with strengthened virtual capabilities.  As the pandemic evolved and we eventually returned to our headquarters, we brought in temperature-taking stations and installed plexiglass barriers. We practiced social distancing and wore masks. We took care of each other. As insurance professionals, we are in the business of protecting people against the unknown. And we showed that our associates had the exact skills and temperament needed for this volatile moment in history.

Through all the turbulence, our financial strength kept us anchored. It enabled us to avoid layoffs, furloughs, or pay cuts—even for those whose job functions could not be performed from home. We prioritized both lives and livelihoods, a decision that reflected our core values, instilled by our founders, of loyalty, stability, and commitment to the associates who make Cincinnati, Cincinnati.

During this period, our long-term investment focus extended to agents and policyholders, too. Consider the $16 million in stay-at-home credits we provided to personal auto policyholders in 2020, or our suspension of property casualty cancelations due to nonpayment, throughout the pandemic, effectively managing insurance profitability, putting our agency clients in the best financial position for success. Some might see these as acts of compassion, and they were, –but they were also financially sound decisions, made possible by our decades-long legacy of diligent expense management and an investment strategy focused on stability and growth. This is the power of conservative financial principles in action.

Our Pennywise, Pound-Brilliant Beginnings

Steve Spray often returns to a quote from Ben Franklin: “Beware of little expenses. A small leak will sink a great ship.” It’s a line that could just have easily come from our independent agent founders 75 years ago as it did from an American founder (and fellow insurance company founder) 275 years ago. Their rigorous approach to expense management has stayed with us. By minding every penny spent and investing in high-quality, dividend-paying equities, we’re able to create a financial cushion that insulates us from economic shocks and to show up in force when called upon. Our intentional, sensible approach—an investment strategy that prioritizes stable growth over quick profits, and expense controls that avoid unnecessary liabilities—keeps us agile and resilient, able to rise where others falter.

Our founders’ strict philosophy of thrift extended to nearly every aspect of their work lives. During the scrappy start-up days of the 1950s, Jack Schiff, Sr., and Chester Field would eat breakfast together at Chester’s house in Springfield, Ohio, before hitting the road. Later, when we had company cars, our executive committee rejected automatic gear shifts as too great a luxury. And throughout their careers, the credo “waste not, want not” prompted Schiff, Sr., and later Jack Schiff, Jr., to religiously save, cut and write notes on scrap paper to apply practicality.

Growth and Stability Through Financial Discipline

While Schiff, Sr.’s, preferred breakfast venue changed to a Denny’s Restaurant close to our headquarters, we continue to follow his example of humility and frugality, knowing that is where a company can gain and keep its edge.  It’s that same dedication to conservative financial principles that’s helped us pursue profitable growth through periods of economic recession, financial crisis, and a global pandemic. It’s what’s allowed us to expand across the U.S. and increase market share. And it’s what’s allowed us to deepen our commitment to our associates when other companies chose to reduce headcounts.

As Robert J. Driehaus, our former vice president and treasurer once observed, “We all watch the small expenses, and then there is no need to watch the large costs.” Or said another way, we pay attention to details to prevent them from becoming larger issues, so that we can invest in bigger things. Rigid in one area of business life, we’re able to develop and deliver flexible programs for associates, for independent agents, for policyholders and to ensure our future is as bright as our storied past.

As The Cincinnati Insurance Companies celebrates 75 years of being A Bridge to Better, we honor our legacy of putting agents first, our noble industry, and our commitment to meeting the ever-evolving needs of policyholders.