MAJOR CASE PRESENTATION
20TH CENTURY INSURANCE COMPANY
Branson C. Nicholson
Instructor: Paula Becker
UNIVERSITY OF PHOENIX
Long Beach Campus
Table of Contents
History, Position, Targeted Market, Goals
Northridge Earthquake, Crisis
Comeback Kid, Results of PR Campaign
Developing a Crisis Plan,
Crisis Team, Milestones for Communication
Plan Approval, Anticipated competitive responses
Recommended press release
20th Century Insurance was established in 1958 and was the first company of its kind to sell automobile insurance without a middleman, known in the industry as a broker or agent. This direct sales approach allowed 20th to offer insurance at a much lower premium than its competitors. To date, 20th Century Insurance is still recognized as one of the most economical full service automobile insurers in the California market. Position
In terms of market share, 20th Century is the fifth-largest car insurer in the state. The company's credit rating was recently upgraded from a B- to BBB+ and its stock is being traded around $21.50. 20th Century is also among the Valley's (headquarters office location) largest firms in both market capitalization and employees. The company currently employs in over 2,000 people. Targeted market
For the first 30 years of the company's existence it enjoyed huge profits from selling only automobile insurance. These large profits were achieved, due in part, to its targeted market which are generally people in the age range of 30-60 who are classified as a low risk "good drivers". The company's structure of selling insurance directly to the customer while providing excellent customer service is also a driving force to its success.
In 1982 the company began offering homeowner's insurance and this venture also proved to be financially successful for the company. The vast majority of the homes insured by 20th Century are located in the Valley cites and at one time the homeowner's insurance made up about 10% of the company's business, however, to date it only constitutes about 2%. Goals
In 1994, 20th Century Insurance was a company on the rise. It was a financially healthy company, reporting a total net of $734.8 million in the preceding 35 years of operation. They were exploring plans to expand their business by selling insurance in other states such as, Arizona, Nevada and Oregon. The company was also looking at the idea of possibly changing the company's name, in light of the newly approaching 21st Century. However, all its plans for growth were immediately put on hold due to the January 17, 1994, magnitude-6.7, Northridge Earthquake that cost the company over $1,065 billion. The Northridge Earthquake
The Northridge Earthquake was recently characterized as one of this nations' most costly disasters ever, as it has been 20th Century's most costly and devastating in terms of its finances, reputation and survival.
In the past five years since this catastrophic occurrence, 20th has encountered near financial ruin, class action lawsuits filed by homeowners, name smearing and accusations of illegal business dealings made to the press by their disgruntled claim's manager and a near take-over of the company by their financial savior Automobile Insurance Group (AIG).
This series of events could have been described by many as a Public Relations nightmare for the company, instead, 20th chose to look at it as their biggest opportunity to do PR.
Physically violent acts of God, such as an earthquake are often times both hard to predict and prepare for. 20th's, Corporate Relations, Senior Vice President, Ric Hill, stated "The only way to see if your crisis plan...
References: Gross, A. (1998). Catastrophe planning: An essential part of comprehensive risk management. Insurance Advocate
Newsom, D., Turk-Vanslyke, J., & Druckeberg, D. (1996). This is PR: The realities of public relations 6ed. United States: Wadsworth Publishing
Schnaible, R. (1994) 20th Century Times: Earthquake!, January
Sparks, D. (1995) On the Road Again. Financial World, December 5
Sullivan, B.(1999) Daily News: Comeback for 20th Century Insurance, January 13
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