The Elephant in the Room When Admiral Group launched a U.S.-based motor insurance enterprise, it picked Richmond, Virginia -- a regional insurance center with a competitive cost of doing business. Admiral Group plc, of Cardiff, Wales, had built a billion-dollar enterprise (£910 million in 2009) selling motor insurance in the United Kingdom and Europe and decided it was time have a go in the world's largest auto insurance market, the United States. The company hired Andrew Rose, a young executive on the fast track who had recently led the roll-out of Countrywide Insurance's new auto insurance line. Rather than acquiring an existing company, Admiral wanted to start the business from scratch under the name of Elephant Insurance. Admiral gave Rose wide latitude to pick the best location in the U.S. A West Virginia native and Darden School of Business graduate, he ruled out certain locations where the temperatures were too cold for his liking. But otherwise, he could pick anywhere in the U.S. Rose narrowed down the prospects to ten locations in major metro areas across the country then began evaluating them according to key criteria such as the availability of blue-collar and white-collar talent, transportation infrastructure, cost of living, cost of office space and general business climate. After a thorough search, Rose ended up where he started: in Richmond, Virginia. He and his wife had come to the metropolitan region of roughly one million people several years previously to work for Capital One, the credit card giant. After a few years, he “Everything's working out had changed jobs, first joining the Mid-Atlantic office of Progressive swimmingly so far. We're Casualty Insurance, and then jumping to Countrywide. As it turned out, Richmond was home to a large number of insurance having record days one companies, including such well known names as Genworth Financial and Markel Corporation, and it had proximity to major after another.” back-office operations such as GEICO in Fredericksburg and USAA in Virginia Beach. When Rose analyzed the workforce attributes of the 10 candidate cities, he discovered that his home town had a great mix of insurance industry experience. "There's a pool of talent here that we quickly tapped into," he told Global Location Link. Looking out his office window during the interview, he said, "I can see four people who came from four different insurance companies." Richmond also had a reasonable cost of living, office space was relatively inexpensive, and the general business climate in the state of Virginia was excellent. While other regions matched up well in individual categories -- Dallas, Texas had very competitively priced office space, too -- only Richmond had the whole package, says Rose. Such talk is music to the ears of Gene Winter, senior vice president of the Greater Richmond Partnership, the regional economic development organization. But he was confident that Richmond would fare well. Although not widely renowned as In just the past week, Elephant Insurance received a a major insurance center like Hartford, Conn., big vote of confidence from two German re-insurance the region is very well suited to the business, he companies. Munich Re and Hannover Re agreed to says. Indeed, the finance and insurance sector is take one-third each of Admiral Group's U.S. risks, one of the leading business clusters in the while Admiral retained one third for its own account. Richmond region, counting nearly 2,300 The Hannover Re contract is good for 10 years, while enterprises and roughly 34,700 employees. the Munich Re will last for 15. Genworth Financial, a Fortune 500 company and "We see a great future for the business," says Rose. a market leader in retirement and home- "We're here in Richmond for the long haul." mortgage insurance, has more than $11 billion in assets. Markel Corp., an underwriter of specialty ‐‐ January 25, 2010 insurance products, is almost as large, with nearly $10.5 billion. Health insurer Wellpoint also maintains a major operational presence, Anthem, in the region. The ranks of insurance companies include entrepreneurial starts-ups like James River Insurance, a provider of excess and surplus lines, and U.S. subsidiaries of foreign companies like Max Specialty, a unit of Bermuda-based Max Capital Group. With so many corporate headquarters here, notes Winter, Richmond can claim a roster of high-level executive talent. "We have the pink-collar clerical workers and middle managers than an insurer would need for a back-office operation, but we also have senior executives with a depth of expertise and breadth of experience in their fields." Indeed, Rose had no trouble recruiting a strong team to introduce Elephant Insurance to the U.S. market. The company conducted a soft launch in the final quarter of 2009 to work out the kinks in its operations, then in January rolled out a full- fledged advertising campaign across Virginia, the only state the company is currently doing business in. "We do TV, radio, internet, billboard," says Rose. "Everything's working out swimmingly so far. We're having record days, one after the other."
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