Jewelers Mutual, the only insurance company in the United States dedicated solely to insuring jewelry and jewelers, has carved an influential niche in a market driven by passion and intrigue. It’s an industry as much concerned about its clients and their bling as it is about teaching store owners how to avoid the bang of increasingly sophisticated criminals. How it strives to stay one step ahead of organized crime — when jewelry is considered a “gateway” item to the drug industry and even terrorism — sets it in an entirely unique class of property and casualty insurance.
Jewelers Mutual enjoys exclusive endorsements from many of the major jewelry trade organizations in the U.S. and Canada.
It has given more than $6.1 million in the past five years to support the jewelry industry for loss prevention education, training and research. It works with the FBI to foil high crimes.
Although the company’s name is widely known in the region, exactly what its 220 employees do is a bit of a mystery to many outside the industry.
“Jewelers Mutual is a really well-kept secret here,” says David Sexton, vice president of loss prevention consulting at the company. “Even people I know very well don’t really know what we do. In the jewelry marketplace in North America, we’re a very significant player. We are the balancing company for the whole (jewelry) industry.”
Indeed, the company is a “major player” on the national jewelry scene, says John Kennedy, president of the Jewelers Security Alliance based near the diamond district in New York City.
“It has had a remarkable impact on reducing jewelry crime in the U.S.,” Kennedy says. “Things are much safer for jewelers today then 10 or 20 years ago with the support of Jewelers Mutual.”
Among property and casualty insurance companies, Jewelers Mutual was named to the Ward’s 50 list of top-performing insurance companies in the nation this year for the fifth time in the last nine years. For 26 consecutive years it has earned the rating of A+ Superior from A.M. Best Company.
Owned by its policyholders – some 10,000 commercial clients and another 300,000 individual policyholders in all 50 states and Canada – it provides more than $17 billion in coverage. The company projects 2013 written premiums to total about $150 million.
Jewelers Mutual has specialized in the commercial jewelry market for 100 years, insuring jewelry stores, wholesalers and craftsmen. For at least 50 years it has also offered individual jewelry insurance, but only began actively promoting its personal lines with the launch of its Perfect Circle Jewelry Insurance brand in 2012. The company has seen double-digit growth in its personal lines for the past six years.
Think: Every couple who buys engagement and wedding rings is a potential client.
Big guns in a little town
Why is the most influential jewelry insurance company in North America headquartered in Neenah, Wisconsin? Copeman loves to share the story.
“Jewelers Mutual was formed by jewelers for jewelers,” begins Copeman, in his characteristically engaging, polished tone. “In 1913, there were about 115 members of the Wisconsin Jewelers Association who said, ‘We all have the same problem – there aren’t a lot of companies providing insurance for us.’ They provided coverage for businesses or farms, but the leading edge of East Coast insurance companies were appointing agents further and further from their roots. Jewelers were, on a regular basis, burning down their buildings,” due to the highly flammable chemical used in watches at the time. “And these companies didn’t appreciate they were having all these losses in the Wild West. So the Wisconsin jewelers came together in the back of what was the Nelson-Anderson Jewelry Store in Neenah. They challenged a few people to put together a plan and said, ‘Let’s start a mutual insurance company and insure each other.’”
The new company leaders thought big-picture. They attended national conventions of the American National Retail Association and within four years won the endorsement of virtually every state jewelers association. By 1923 the company had 2,500 policies in 44 states, with 81 percent from outside Wisconsin.
By 1976, Jewelers Mutual was licensed in all 50 states, due in large part to the initiative of Ronald R. Harder, who joined the company just a few years before. Harder, who had held positions as corporate secretary, administrative vice president and chief operating officer, became president of Jewelers Mutual in 1982, and remained until his retirement in 2007. Long-time employees say Harder was instrumental in developing the relationship-driven culture of the company.
“One of our mottos was ‘insurance isn’t enough,’” says Harder, who has become a friend and mentor to the current leader. “You need to understand the people, get to know the people, build those relationships, how they operate and prevent losses. You have to understand their business so you can speak in their terms.”
Harder helped move the company’s emphasis on loss prevention forward, developing a library that included a series of videos and other educational tools for its commercial members. With the purchase of a “very large rock” – a 600-pound malachite specimen – he also established what became the R. Harder Gallery of Gems & Minerals, which has become a popular boutique museum on the premises of the company’s headquarters in Jewelers Park.
When Harder began his 34-year stint with Jewelers, the company had assets of about $12 million. When he retired, assets were at $200 million. As he approached retirement, Harder advised the company’s board of directors to begin a succession plan. Darin Kath was named president in 2005 and CEO in 2007. Kath left to head Integrity Insurance as its CEO in 2008 and the board commenced a national search for a new leader.
The culture with Copeman
Copeman was on his way to retirement from many years in the property and casualty insurance industry in the Midwest – from his native Iowa to Cincinnati to Kansas City – when a headhunter called. In his first interview he was dead honest about his knowledge of gems and jewelry.
“I didn’t know a heliodor from a bale of hay,” he says with a laugh, referring to the deep yellow variety of golden beryl gemstone selected for the gallery by Harder to commemorate the 100th anniversary of the company.
“I held up my hands and said, ‘I don’t have a watch. I have a gold band. I have a chain with a cross on it – and that’s the extent of my jewelry. Now, on the other hand, I love giving my wife jewelry as gifts, if that counts.’” It did.
“Obviously, my responsibility is to lead an insurance company,” Copeman continues. “We have many, many experts within these four walls that grew up in the jewelry industry, who ran retail jewelry stores, that were designers and craftsmen, who have deep certifications in a variety of aspects of jewelry development, marketing and sales, etc. So my need to be expert in jewelry isn’t as great as knowing that we need to find the right talent that can serve the industry.”
Since Copeman joined the company in 2009, Jewelers Mutual has seen a 29 percent growth in premium dollars. Its policyholders’ reserves/surplus has risen to over $175 million – or 39 percent – strengthening the company should catastrophe strike or the economy stumble, he says.
Taking the helm in the midst of the Great Recession was a challenge, he admits. Jewelry sales were down and thus insurance sales were also down. Copeman took advantage of the slowdown to beef up the company’s technology.
Jewelers Mutual invested millions to overhaul its information technology, calling it the Emerald Program. Copeman had a depth of experience in overseeing technology in previous insurance positions and observed that when he started at Jewelers, “we were driving around on an old ’47 Plymouth chassis with a great big old V8 engine, with huge speakers and fat tires.” He knew it would not support the business growth he envisioned. Although the board had approved an IT upgrade just six years earlier, Copeman made a successful case for the investment. Using software from Silicon Valley company Guidewire, some 25 to 40 IT consultants from Green Bay-based Skyline Technologies and PwC (PricewaterhouseCoopers) worked at Jewelers Mutual from 2011 until this past July, completely revamping its policy administration systems.
Thwarting thieves for loss prevention
David Sexton, vice president of loss prevention consulting at Jewelers Mutual, has seen technology make a significant difference in reducing jewelry crime since he joined the company in 1980. Today, a crime database run by the Jewelers Security Alliance gathers information from all over the country and instantly disseminates it to law enforcement. It works hand-in-hand with the FBI to investigate major thefts. Thieves in the jewelry industry have become more sophisticated than ever, says Sexton, who serves on the alliance board.
“There are basically two kinds of criminals,” he says. “We have the opportunistic criminal who asks to see the most expensive Rolex, grabs it and runs out of the store. Then you have what everyone dreads: Organized crime and career professionals. Those individuals have to be caught and put in jail because if they’re not, they will plague the industry.”
In the past year, says Copeman, a new and dangerous phenomenon has occurred, called “tiger kidnappings.”
“Picture yourself as a retail jeweler, closing up shop,” Copeman explains. “You drive home, where three or four men grab you, walk into the house, sit with your family and hold them hostage while others drive you back to the store and force you to open up the safes. The bad guys take all the time they want, cleaning out the store and the safe, while you are worrying about what are they doing to your family back at your house. We’ve had several instances of that kind of loss recently. It’s extraordinarily traumatic.”
A Jewelers Mutual client on the East Coast who owns numerous retail locations was robbed of more than $3 million in jewelry this way, Copeman adds. It’s a serious, scary phenomenon that calls for advanced training, emphasizing safety.
“Our advice is you can replace inventory but you can’t replace a life,” Sexton says. “We try to teach jewelers to be aware. Once they come in with weapons, you have no choice but to cooperate.”
Last year, about 500 jewelry criminals were arrested in the U.S., Kennedy says. Murders involving jewelry robberies are down from 37 in 1992 to just two to four each year. Further, inflation adjusted losses due to crime are at least half of what they were a decade ago. Kennedy credits Jewelers Mutual and its strong partnership with the nonprofit trade association for improving these statistics.
“Without Jewelers Mutual’s help, we couldn’t possibly do this,” Kennedy says. “It helps the whole industry.”
Claims side: Quick replacement is key
On the claims side, Jewelers Mutual is unique from other property and casualty companies in that it does not generally issue checks for personal claims. Rather, it strives to repair or replace the items with the same items, working directly with jewelers to make good on policy claims.
Unlike most homeowner’s insurance policies, Jewelers Mutual will cover “mysterious disappearance” of an item. Lose a stone from your diamond ring? Go to your trusted jeweler and your stone will be replaced.
“The fact that we are sending you back to the jeweler rather than writing you a check really eliminates fraud,” Copeman says.
Amy Heline, Jewelers Mutual salvage specialist and curator of the R. Harder Gallery, oversees the recovery of jewelry for claims in the commercial and personal lines, working with jewelers, diamond cutters and wholesalers. Heline, a 20-year veteran of the jewelry industry, joined Jewelers Mutual about five years ago after having owned and operated Heline Jewelers in Darboy for almost five years with her husband.
“We take care of you right away,” says Heline. “You work with your jeweler to replace that item, as long as it was covered and approved by the claim.” After that, Heline works behind the scenes with craftsmen and other resources to restore recovered items so that they can be sold and the value recouped for the company.
In the case of a retail claim, Jewelers Mutual does whatever is necessary to get the retailer immediately back in business, issuing a check for the lost value so the store owner can replenish whatever was damaged or stolen. Again, Jewelers Mutual works behind the scenes with the police to locate, identify or repair the stolen goods.
Heline also curates the R. Harder Gallery and stays in touch with industry trends, attending trade shows and maintaining relationships with jewelers and wholesalers throughout the U.S. and Canada. As Harder and Copeman emphasize, it’s all about relationships, she says. Katherine Bodoh, director of Industry Relations and Corporate Events, concurs.
“The best part of my job is getting the opportunity to work with our jewelers,” says Bodoh. “We are there protecting them in their happiest times and some of the worst times in their lives. It’s very rewarding when we are working with our customers. They are like family in many cases.”
Copeman expects to soon become involved in selecting his replacement: He plans to retire in May 2015. Until then, he’ll be focusing on growth.
The company estimates there are 25,000 to 26,000 retail jewelers in the U.S. and Canada, and about 40 percent choose to self-insure. All are potential clients. The individual insurance side is especially ripe for growth, Copeman adds.
“There are 300 million people in this country,” he says. “A good share of them own some sort of jewelry. We have 300,000 policyholders. We realize there’s a whole world out there that doesn’t know about us in the personal lines area.
“We are the snowflake on the tip of the iceberg in terms of penetrating that market.”
Jewelers Mutual Insurance Company
• Founded: 1913
• Headquarters: Jewelers Park, Neenah
• CEO: Darwin Copeman
• Employees: 206
• Members: Nearly 10,000 commercial and 300,000 individual policyholders in all 50 states and Canada; total coverage is more than $17 billion.
• Growth: Since 2009, the company has seen a 29 percent growth in premium dollars and its policyholders’ reserves/surplus has risen to over $175 million – or 39 percent growth.
• Industry ratings: Jewelers Mutual has been rated by A.M. Best as an A+ company 26 consecutive times. It was recognized by Wards 50® in 2013, 2012, 2011, 2006 and 2005. Wards evaluates 3,000 insurance companies based on a five-year average performance for a number of factors.
• Industry endorsements: Jewelers Mutual enjoys exclusive endorsements from major trade organizations in the U.S. and Canada, including the American Gem Society, Canadian Jewellers Association, Jewelers of America, Manufacturing Jewelers and Suppliers of America, Canadian Jewellery Group, DiGem, and Jewelers Vigilance Canada. The company has given more than $6.1 million in support of the jewelry industry.
• Website: www.jewelersmutual.com
R. Harder Gallery of Gems & Minerals
A nonprofit gallery featuring a large collection of rocks, gems and minerals from around the world, located in the lobby of Jewelers Mutual Insurance Company, 24 Jewelers Park Drive, Neenah.
Hours: 9 a.m. to 4 p.m. Monday through Friday (excluding holidays)
Call (920) 725-4326, ext. 2301 for group tours or escorted visits.
“This collection represents our interest in broadening your understanding of how rocks become jewels.” – Ron Harder, museum founder and retired CEO of Jewelers Mutual