North Star Mutual CEO on market challenges and tech upgrades

North Star Mutual CEO on market challenges and tech upgrades | Insurance Business America

Technology

North Star Mutual CEO on market challenges and tech upgrades

He highlights evolving deductibles, rate changes, and IT advancements

Technology

By
Kenneth Araullo

Pete Hellie (pictured), president of North Star Mutual, recently discussed the insurer’s investment in Southwest Minnesota State University, where it has established the North Star Mutual School of Business and offers internship programs.

When asked about trends in the mutual insurance market, Hellie noted significant changes, particularly in the Midwest, where the market has become more challenging.

“There’s a lot of changes on deductibles and rates and actual cash value and that kind of thing – so a lot of change in the market it’s really gotten interesting, put it that way,” Hellie said in an interview with AM Best.

On the topic of technology, Hellie highlighted that 2022 was North Star Mutual’s most challenging year due to a high volume of claims. In response, the company improved its processes on the IT side, including implementing automatic reserving based on claim type and property value.

“We do most of the claims with our own people. We do 90% of the claims ourselves, so we have that personal touch. We also, in Minnesota, we work with Township Mutuals and they’re very localized and they know their policyholders,” Hellie said.

Hellie also addressed the company’s efforts in talent acquisition and retention. North Star Mutual has partnered with Southwest Minnesota State University, located 13 miles from Cottonwood, to develop a pipeline of talent through internships.

This summer, the company had six interns, selected from over 60 applicants, and hired one of them at the end of the program.

“We had the management principles class come over from Southwest State. Insurance usually isn’t the first career choice that people make, but we had 40 kids over, explained insurance, had a lot of good questions, gave them a tour of the building and that kind of thing. That’s the part that we’re working on,” he said.

In terms of cybersecurity, Hellie explained that North Star Mutual’s IT department regularly sends out phishing simulations to train staff. Additionally, the company has contracted with a vendor to provide immutable backups, ensuring data protection in case of an attack.

Looking ahead, Hellie predicted continued challenges in the mutual insurance market, especially as storms and weather events lead to higher deductibles and actual cash value adjustments.

“I think we’re getting closer to maybe premium adequacy, rate adequacy going forward. That’s the hope for all of us. Weather, of course, is the wildcard in all of this. Hurricanes coming in now that doesn’t affect us directly but it will indirectly. Reinsurers, I think, are having good years, that’s going to help everybody,” Hellie said.

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