Entering the New Millennium with a Bang

A Critical Decade for Continued Success

From its earliest days, The Cincinnati Insurance Companies was committed to financial strength. Our prospectus to potential shareholders 75 years ago established the principles by which we would achieve and maintain it: “The company shall operate in an extremely conservative manner… Every intelligent and sound method of business shall be employed.”

That ethos remained at the heart of Cincinnati’s approach during its fifth decade, the 1990s. It was a period that would see incredible growth: seven new states, written premiums more than doubling, a new building to house the expanding staff. And it enabled us to enter a new millennium that was beset by economic difficulties with confidence in our ability to keep our promises—and make many more.

A Force in the Business

“During the 1980s, we really established ourselves as a force in the business,” former CEO Robert Morgan said. Cincinnati had, among other things, entered the management liability space, combined its life insurance operations and moved to a brand-new headquarters. Gross premiums had grown from $265.5 million when Morgan succeeded company co-founder Jack Schiff, Sr., as CEO in 1982 to $845.5 million at the end of the decade; the company would top $1 billion for the first time in the closing days of 1991.

Surveying the organization he joined in 1966—when written premiums were less than $20 million—Morgan set an ambitious goal for the new decade. The company would double that number by the dawn of the new millennium: $2 billion by 2000.

Three Roads to Growth

To get there, Cincinnati focused on three areas: new products, new geographies and new capabilities. For the first time, we established a dedicated research and development operation. Under its first leader, Jody Wainscott, the team responded to a growing concern of business owners – an increase in sexual harassment complaints – with one of the first employment practices liability policies.

Morgan charged another leader, J.F. Scherer, with increasing the companies’ footprint. In addition to growing into new areas in states where Cincinnati already did business, Scherer expanded into seven new states, bringing the company’s total to 30—contributing more than $100 million in new business to the drive for $2 billion. “I would get phone calls from agents who were in states where we weren’t active asking, ‘When are you coming out?’” As ever, though, Cincinnati was careful not to overextend itself, and to ensure that the growth—which earned it a place on the Standard & Poor’s 500 Index in 1997—did not compromise its hard-won financial strength. Forbes named Cincinnati the most productive publicly traded property and casualty insurer in the U.S. in 1997.

“We were growing very rapidly. It was, as they say, like drinking from a firehose,” said Ken Stecher, the retired chairman and CEO who held several senior accounting roles during the 1990s. “We had to adapt quickly. We had to find new ways to handle all the production that was coming in.”

The Dawn of the Digital Age

Those new ways for the ‘90s included doubling the headquarters footprint with the North Tower to house the growing staff required by the growing business. The company also invested in new technologies.

These were the heady days of the dot-com boom, when internet and other digital technology companies were sprouting up and growing wildly—and, as it turned out, unsustainably. Faced with a rapidly changing tech landscape, Cincinnati introduced new digital accounting, claims and processing systems, laying the groundwork for the company’s vaunted claims service to go paperless in 2004.

One area of technology the company did not invest in were those high-flying stocks. Sticking to its long-time policy of putting its money only in dividend-paying shares like its own, Cincinnati avoided the worst of the dot-com collapse in 2000. And in spite of the darkening economic landscape, it achieved Morgan’s goal of $2 billion in written premiums that year.

By then, Morgan had retired as CEO, handing the reins to Jack Schiff, Jr. “CFC is at a turning point,” he said, “ready for a new generation of leaders.” It would have to be: The new CEO’s father, Jack Schiff, Sr., passed away in 1998, followed by fellow co-founder Harry M. Turner and Hayden Davis, Jr., architect of Cincinnati’s legendary Claims department, in 2000.

“By the 1990s, I think they were absolutely stunned by our success,” Morgan said. “It was a vindication of what they set out to do: Create an insurance company that would make a difference.”

That vindication would continue into the new millennium. Cincinnati continued to grow both in size and reputation, with Crittenden naming it the leading commercial package insurer in 2001. Even in the depths of the recession, Schiff, Jr., said he did not break a sweat.

“I never worried about it. Problems come—that’s why you’re financially strong. You can endure and don’t have to fundamentally change the way you do business.”

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.