And then with all the technology changes that are coming in, there are some challenges. If you look at cars… the newer smarter cars…those cars present a lot of challenges because they’re very expensive to repair. And that’s supposed to be offset by what we call lower frequency, which means less accidents, but that safety element has not shown up in the numbers because there are not as many of them on the road. People aren’t sure how to use them effectively. Sometimes they take it for granted and it gets them in trouble or they think it’s going to keep them safer than it can. So that’s creating a real challenge for all the insurance companies about how to figure out how to effectively insure and underwrite those new safer cars that aren’t yet bringing a whole lot of positive impact to insurance clients.
I know you’re big into the charitable endeavors, you have an insurance foundation. And you’re very active in the local charity scene in the Boston area. Why is that such a focus? Is that a strategy or is that just the right thing to do?
I think it’s probably some of both. We started the Arbella Foundation in 2005 after having built up enough capital to be able to invest and create a foundation. We felt that, a corporation is allowed to exist by the laws, is allowed to have customers by people responding. And so you should be giving back to your communities where you do business. So we always thought that was part of it.
And then our parent company is a mutual company, which means that we don’t have stockholders or investors. Our owners are our customers. And so when you’re a mutual company like that, we believe the obligation to give back is even stronger because our owners are our customers who live in the communities where we do our business. And that also makes our employees part of our owners because most of our employees get their insurance through Arbella. So as a mutual company, we really think it’s very incumbent on us to give back.
And then the strategy is, again, part of what we think our brand is, which is a commitment to great service, the next logical step of that is to give that service out and to support other organizations, nonprofits, that are also giving great service to the community. So when we give out our dollars, we try to look for the nonprofits that are really doing it well. And we find a lot of those through our employees and our agents who volunteer or work for them or know about them in their local communities.
You talk about the competitive nature of the insurance industry. And I mean, you don’t have to turn on the TV for more than two minutes to see an insurance ad or on the radio. I mean, it’s really everywhere nowadays. So I’m sure that, you know, you’re trying to get your name out there in a strategic way. Is that part of it?
We want people to think of us as a good company, both from a service element and from a commitment element. And the other thing that we continue to see in research… And this isn’t just about Arbella. It’s kind of across the board, even though people obviously pay a lot of attention to advertising and do a lot of research through the internet, at the end of the day with insurance, because it’s so complicated, the number one way most consumers pick their insurance company or their insurance agent is by word of mouth.
You know, they’ll do all this research, listen to the ads, then they as a friend or a neighbor, “Who are you with?” And so that’s where we try to get our name embedded into our communities that people think of us as a good company and will make that recommendation. And so clearly, if we’re helping in the communities, helping to give back, whether by volunteering or supporting nonprofits, that helps with that image.