From philanthropy to profitability | Insurance business in America
Amid the continued success of his professional career, Menzies is actively working to grow his charitable footprint, setting an exemplary standard for his colleagues, partners and friends. Last May, he met Pope Francis and was appointed to create and lead the World Foundation of St. Francis, focusing on “human ecology” to develop an agenda that harmonizes the disparate interests of the business. human rights in a meaningful way for the benefit of humanity.
“An example of the first activity underway is the construction of a supranational agreement for the equitable distribution of vaccine-related medical technology among nations and stateless persons,” he said.
Menzies also prioritizes philanthropic engagement to promote and facilitate meaningful growth within his organization. Applied’s new headquarters in Omaha, Nebraska Heartwood Preserve is under construction; when completed, it will be part of one of the largest urban developments in the United States. The more than 500 acre Heartwood Reserve has exceeded expectations of most conventional land development projects. The eco-friendly development includes a variety of retail, commercial, residential and recreational facilities.
âThe results have been extremely favorable economically, environmentally and aesthetically,â said Menzies. âThis is Applied’s way of giving back to the local community and our dedicated employees. “
He adds that in business, in philanthropy and in everything we do, having the same set of values ââis essential. âThe goal is to apply an intellectual and emotionally courageous approach to every endeavor,â he says. “For me, there is no end to learning, thinking and rethinking, investing and maintaining a deep and lasting optimism.”
The takeover of Berkshire
In 2005, Menzies sold a percentage of Applied Underwriters to Berkshire Hathaway. However, as Applied’s footprint grew stronger in the domestic market, its growth began to create a problem for Berk-shire: Applied and Berkshire’s other insurance businesses became competitors, creating a channel conflict. unproductive.
In 2019, Menzies bought the company back in a deal valued at $ 920 million, including the buyback of 81% of the shares Berkshire has owned since 2005.
“I remember when Warren Buffett expressed interest in our business in 2005, buying a controlling stake – and also defining, our unprecedented takeover of Berkshire in 2019, turning Applied Underwriters on its own journey as a private company.” , Menzies said. âAs an entrepreneur, I have long felt the sense of inevitability of such a takeover and looked to the opportunities that independent ownership holds. Our acquisitions and market positioning over the past 24 months demonstrate the value of this transaction for Applied. “
Buffett usually invests in companies and then leaves their affairs in the hands of those who made the company attractive to him in the first place. This approach has allowed Applied to develop its own corporate culture within the Berkshire Hathaway group.
âWarren set the standards of governance with great but tempered ambition for all businesses in Berkshire and has shown strength through his native humility and modesty,â Menzies said. âHe is an accomplished capitalist and easily among the main paradigms of entrepreneurship in business history. It operates with the utmost integrity.
âOn a personal note, my relationship with Warren meant a lot to me – it still is – and I found myself emulating his approach to business with objectivity, but always with respect for the courage of entrepreneurs.
Applied was born in the field of workers’ compensation – a tough, dynamic and heavily regulated line of insurance.
âWe’ve learned its intricacies and the very real human risk it involves,â Menzies says. âWe then used this information to help our clients better manage their risk. Through a model of in-depth study, taking into account the human side of risk and seeing opportunities where others see obstacles, we have become new product lines, new challenges and have built a global collective of customers. and loyal partners.
While Applied’s philosophy is rooted in caring for injured workers, home owners and business owners, the company continues to expand its reach into countless other categories.
âWith imagination, experience and integrity, we dig new risks to create original solutions while taking human history into account in each goal,â says Menzies.
âDisciplined financial strength is a core value because without it you cannot earn a client’s trust,â he adds. âWe are proud that Applied Insurance Companies became the first monoline workers’ compensation writer to receive an A + (top) rating from AM Best 10 years ago. “
Menzies also notes that Applied’s staff reflect the unique spirit of the company through their dedicated and thoughtful responsiveness, as well as their forward-looking approach to customer needs well beyond the letter of policy.
âAll of our customer’s calls and needs are handled on our Omaha campus by company employees,â he says. âOur customers and producers never reach a TPA or someone halfway around the world. Unified Operations gives Applied customers a consistent and responsive experience.
âWe honor claims and go beyond minimal care, which we believe is simply the best option for true protection and responsible pricing. While our competitors adopt slogans and think them often, getting actions that match the words is a whole different matter. Applied’s leadership and key decision-makers have a dimension of care that is deeply rooted in our corporate culture.