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Ohio Casualty Corp. Business Information, Profile, and History

136 North Third Street
Hamilton, Ohio 45025-0001
U.S.A.

History of Ohio Casualty Corp.

Ohio Casualty Corp., which celebrated its 75th anniversary in 1994, ranks as one of the United States's top 35 stock insurance holding companies, with $3.8 billion in assets. The vast majority (97 percent) of the firm's business is in property-casualty insurance, including private passenger auto, homeowners, inland marine, workers' compensation, commercial auto, and general liability. Although Ohio Casualty had $5.3 billion in life insurance in force as of 1993, life insurance products constituted a very small segment of the corporation's business. All policies are sold and serviced through a combination of 4,000 independent agents and branch offices in 38 states. The insurer has chalked up nearly a half-century of consecutive annual dividend increases in spite of formidable obstacles in the early 1990s.

The Ohio Casualty Insurance Company was established in Hamilton, Ohio, a small industrial town located between Dayton and Cincinnati. Howard L. Sloneker, Sr., Samuel M. Goodman, and Ben D. Lecklider, all of whom were in the auto insurance business before World War I, opened an office in the Rentschler Building in November 1919. The new firm became Ohio's first stock insurance company to offer full coverage automobile policies--including allowances for property damage, personal liability, fire, theft, and tornado damage--and auto insurance was its only line of business. Lecklider advanced to the forefront of the organization, and Goodman oversaw the new company's finances as treasurer. Known as a "people person," Sloneker expanded the business through his positive relationships with agents, policyholders, employees, and investors.

The young company's premiums exceeded $400,000 within just a few years, but its success highlighted its risky emphasis on only one product in only one state. The company began to diversify in 1923, offering glass insurance for homeowners and businesses, and selling policies outside the state. Ohio Casualty established its first affiliate, the Inland Casualty Company, just two years later. Rapid growth necessitated the parent's third and final move to an office on Third Street in Hamilton in 1927. Although the buildings were remodeled and expanded over the years, that location remained Ohio Casualty's headquarters into the 1990s.

The insurer had added fidelity and surety lines, as well as burglary, forgery, and general liability insurance, to its product offerings by October 1929, when the stock market crash heralded the Great Depression. Surprisingly, Ohio Casualty managed to avoid laying off a single employee, and even achieved growth, throughout the Depression. The company established its first branch office, in Cleveland, in 1935; a second branch followed three years later in Detroit. The 1939 acquisition and subsequent merger of the Pennsylvania Indemnity Company expanded Ohio Casualty's reach eastward.

Co-founder Howard Sloneker, Sr. advanced to Ohio Casualty's presidency when Ben Lecklider died in 1940. Sloneker would continue in a leadership capacity through World War II and into the postwar era. As the number of vehicles and drivers increased during this time, Ohio Casualty began to segment its clients according to age, driving record, and other quantitative categories. The company insured only the statistically best candidates, known in the industry as "standard risks." Ohio Casualty acquired the firm that would long rank as its largest subsidiary, California's West American Insurance Company, in 1945.

Howard Sloneker's oldest son, Howard Jr., was named president of the company in 1953, and he oversaw daily operations in that position for a decade. He then became chairperson, following his father's death in 1963, while his brother, John, advanced to the presidency. The Sloneker family legacy drove Ohio Casualty's dramatic growth through acquisition in the 1960s. The company established its Ocasco Budget subsidiary at the outset of the decade. This operation provided premium financing for its own and other companies' clients, thereby easing the financial burden of large semiannual premium payments. The following year witnessed the charter of The Ohio Life Insurance Company, which offered personal and business life insurance, as well as pension and profit sharing programs. Just one year later, Ohio Casualty acquired another Hamilton-based firm, Ohio Security Insurance Company, and closed out the decade with the acquisition of American Fire and Casualty Company of Orlando, Florida, a firm that held out great growth potential through its southeastern network of agents. An insurance holding company, Ohio Casualty Corporation, was formed in 1969 to coordinate the activities of the six related companies.

During the 1960s, increasing loss costs shifted the auto insurance industry's profit center from underwriting to investing. An underwriting profit was measured by the combined operating ratio, which compares claims and overhead to premiums collected. A combined operating ratio of 100 or less indicated that a company's expenses equaled or were less than premiums collected, while a ratio of 107 signified a seven percent underwriting loss, indicating that premiums collected fell seven percent short of claims and operating expenses. Since the automobile insurance business began consistently recording losses on underwriting activities in the 1960s, most companies, including Ohio Casualty, made money through profitable investments.

Problems compounded in the insurance market of the 1970s, as soft markets, cash flow underwriting, and continuously increasing loss costs exacerbated negative combined ratios and reduced profitability. The industry averaged a seven percent annual loss on underwriting from the 1970s through the early 1990s. Ohio Casualty's underwriting loss from 1984 to 1993 was slightly below that average, at 6.3 percent. John Sloneker advanced to Ohio Casualty's board chair and chief executive office when brother Howard retired in 1978. Joseph Marcum, an Ohio Casualty employee since 1947, became the company's first president outside the Sloneker family in almost four decades.

Sloneker and Marcum lead Ohio Casualty to ever-higher premium growth, exceeding $1 billion in gross premiums written in 1985. When Sloneker retired from active management in 1988, Marcum advanced to the positions of chairperson and CEO. He served in that capacity until 1994, when Lauren Patch, then acting as president, added the duties of the chief executive office to his responsibilities.

The insurance industry overall suffered consumer backlash that came to fruition in the form of rate legislation in the late 1980s. The most notorious law, California's Proposition 103, mandated 15 percent cuts in auto insurance premiums and refunds to many customers after its 1988 ratification. At that time, Ohio Casualty's West American Insurance Company in that state contributed over one-fifth of the holding company's annual revenues. Nevertheless, the parent elected to withdraw from California in 1992. Legislative assessments and loss of premium revenues combined with decreasing investment yields resulted in an 11.7 percent decline in net income from $98.5 million in 1992 to $87 million in 1993. Gross premiums dropped 12.4 percent during the same period, as Marcum and Patch shifted the corporation's focus to the states of Ohio, Kentucky, Indiana, Illinois, and Tennessee. The leaders set a long-term goal of capturing at least five percent of each of those competitive markets, and at least one percent of each of the other 33 states in which it operated. Achieving these two seemingly modest goals alone promised to double Ohio Casualty's premium writings, and would thereby salvage the revenues lost from exiting the California market.

Acknowledging that selling through independent agents had distanced the firm from its ultimate customers, the policyholders, Ohio Casualty attempted to remedy this situation through the creation of the its first formal marketing department and the implementation of a Total Quality Management program in the early 1990s. A new statement of purpose, issued in 1993, identified four key stakeholders: policyholders, shareholders, employees, and agents. More tangible changes included a corporate reorganization into four organizational areas: policyholder services, management support systems, human resources, and technology. Cost reduction strategies such as increased automation and consolidation of branch offices were implemented to curb historically high underwriting expenses.

The insurer also adopted several anti-takeover measures in the early 1990s, first reducing its cash position to virtually nothing in 1990, since cash-rich firms are often targeted for acquisition. At about the same time, the company created a shareholder protection rights plan that provided for the distribution of one common share purchase right for each outstanding common share in the event that a person or group acquired 20 percent or more of the insurer's common shares.

Marcum and Patch conceded that Ohio Casualty Corporation's financial performance was disappointing in 1993, but emphasized that, with its reputation for underwriting and claims servicing, the firm could expect better earnings in 1994 on the occasion of its 75th anniversary.

Principal Subsidiaries: Ohio Casualty Insurance Co.; West American Insurance Company; Ohio Security Insurance Co.; American Fire & Casualty Co.; Ohio Life Insurance Co.; Ocasco Budget, Inc.

Related information about Ohio

pop (2000e) 11 353 000; area 107 040 km²/41 330 sq mi. State in E USA, divided into 88 counties; the ‘Buckeye State’; visited by La Salle in 1669 and settled by fur traders from 1685; 17th state to join the Union, 1803; capital, Columbus; other chief cities, Cleveland, Cincinnati, Toledo, Akron, Dayton; part of the Allegheny plateau; drained by the Muskingum, Scioto, and Great Miami Rivers which flow to meet the Ohio R and L Erie; grain, soybeans, vegetables, dairy cattle, livestock; coal (E and SE Appalachian coalfield), natural gas, stone, sand, gravel; major industrial centre, including steel, metal products, vehicles, paper, chemicals, rubber, clothing, electrical goods, foodstuffs.



Ohio is a Midwestern state of the United States. Ohio is now in the East North Central States division."Geographic Definitions" Census Region definition Attachment C, United States Census Bureau, retrieved December 22, 2005.

Ohio was the first state admitted to the Union under the Northwest Ordinance. The name refers to the Ohio River that forms its southern border.

The United States Navy has named several ships USS Ohio in honor of this state.

History

Native Americans

After the so-called Beaver Wars, the powerful Iroquois confederation of the New York-area claimed much of the Ohio country as a hunting and, probably most importantly, a beaver-trapping ground. After the devastation of epidemics and war in the mid-1600s, which had largely emptied the Ohio country of indigenous people by the mid-to-late seventeenth century, the land gradually became repopulated by the mostly Algonquin-speaking descendants of its ancient inhabitants, that is, descendants of the Adena, Hopewell, and Mississippian cultures.

The indigenous nations to inhabit Ohio in the historical period (most clearly after 1700), included the Miamis (a large confederation), Wyandots (made up of refugees, especially from the fractured Huron confederacy), Delawares (pushed west from their historic homeland in New Jersey), Shawnees (desendents of the Fort Ancient society, a Missisippian culture in the Midwest), Ottawa (more commonly associated with the upper Great Lakes region), Mingo (like the Wyandot, clearly a recently-formed composite of refugees from Iroquois and other societies) and Eries (gradually absorbed into the new, multi-ethnic "republics," namely the Wyandot).

Colonial and Revolutionary Eras

During the 18th century, the French set up a system of trading posts to control the fur trade in the region.

In 1754, France and Great Britain fought a war known in the United States as the French and Indian War.

Northwest Territory: 1787-1803

The United States created the Northwest Territory under the Northwest Ordinance of 1787. Settlement began with the founding of Marietta by the Ohio Company of Associates, which had been formed by a group of American Revolutionary War veterans. Following the Ohio Company, the Miami Company (also referred to as the "Symmes Purchase") claimed the southwestern section and the Connecticut Land Company surveyed and settled the Connecticut Western Reserve in present-day Northeast Ohio. The old Northwest Territory originally included areas that had previously been known as Ohio Country and Illinois Country. As Ohio prepared for statehood, Indiana Territory was created, reducing the Northwest Territory to approximately the size of present-day Ohio plus the eastern half of the Lower Peninsula of Michigan and the eastern tip of the Upper Peninsula.

Under the Northwest Ordinance, any of the states to be formed out of the Northwest Territory would be admitted as a state once the population exceeded 60,000. On February 19, 1803, President Jefferson signed an act of Congress that approved Ohio's boundaries and constitution. Bender introduced a bill in Congress to admit Ohio to the Union retroactive to March 1, 1803. On August 7, 1953 (the year of Ohio's 150th anniversary), President Eisenhower signed an act that officially declared March 1, 1803 the date of Ohio's admittance into the Union. While Ohio is only second as the birthplace of U.S. presidents (with seven), William Henry Harrison (born in Virginia) and his grandson, Benjamin Harrison, (who also lived part of his adult life in Indiana) settled in, led their political careers from and/or were buried in North Bend, Ohio on the family compound, founded by William's father-in-law John Cleves Symmes.

In 1835, Ohio fought a mostly bloodless boundary war with Michigan over the Toledo Strip known as the Toledo War. Instead constitutional amendments have been proposed by petition and the legislature hundreds of times and adopted in a majority of cases.

Law and government

Ohio's capital is Columbus, located close to the center of the state. Ohio has 18 seats in the United States House of Representatives.

Geography

Ohio's geographic location has proved to be an asset for economic growth and expansion. Ohio has the nation's 10th largest highway network, and is within a one-day drive of 50% of North America's population and 70% of North America's manufacturing capacity."Transportation delivers for Ohio", Ohio Department of Transportation, retrieved December 22, 2005 To the North, Lake Erie gives Ohio 312 miles (502 km) of coastline,"Ohio Coastal Atlas" Page 1 of "County Profiles" subsection, Ohio Department of Natural Resources, retrieved December 22, 2005. which allows for numerous seaports. It borders Pennsylvania on the east, Michigan in the northwest near Toledo, Ontario, Canada across Lake Erie to the north, Indiana to the west, Kentucky on the south, and West Virginia on the southeast.

Ohio's borders were defined by metes and bounds in the Enabling Act of 1802 as follows:

Note that Ohio is bounded by the Ohio River, but the river itself belongs to Kentucky and West Virginia. This glaciated region in the northwest and central state is bordered to the east and southeast first by a belt known as the glaciated Allegheny Plateau, and then by another belt known as the unglaciated Allegheny Plateau. Known somewhat erroneously as Ohio's "Appalachian Counties" (they are actually in the Allegheny Plateau), this area's coal mining legacy, dependence on small pockets of old manufacturing establishments, and even distinctive regional dialect set this section off from the rest of the state and, unfortunately, create a limited opportunity to participate in the generally high economic standards of Ohio.

Significant rivers within the state include the Cuyahoga River, Great Miami River, Maumee River, Muskingum River, and Scioto River. The rivers in the northern part of the state drain into the northern Atlantic Ocean via Lake Erie and the St. Lawrence River, and the rivers in the southern part of the state drain into the Gulf of Mexico via the Ohio and then the Mississippi.

Grand Lake St. Marys in the west central part of the state was constructed as a supply of water for canals in the canal-building era of 1820–1850.

Important cities

  • Akron city 212,215,Akron Quickfacts metropolitan area 694,960Population in Metropolitan and Micropolitan Statistical Areas Ranked by 2000 Population
  • Canton city 79,255,Canton Quickfacts metropolitan area 406,934
  • Cincinnati city 317,361,Cincinnati Quickfacts metropolitan area 2,009,632
  • Cleveland city 461,324,Cleveland Quickfacts metropolitan area 2,148,143
  • Columbus city 728,432,Columbus Quickfacts metropolitan area 1,612,694
  • Dayton city 161,696,Dayton Quickfacts metropolitan area 848,153
  • Springfield city 64,483,Springfield Quickfacts metropolitan area 144,742
  • Toledo city 308,973,Toledo Quickfacts metropolitan area 659,188
  • Youngstown city 79,271,Youngstown Quickfacts metropolitan area 602,964

Note: The Cincinnati metropolitan area extends into Kentucky and Indiana, and the Youngstown metropolitan area extends into Pennsylvania.

Economy

Ohio is a major producer of machines, tires and rubber products, steel, processed foods, tools, and other manufactured goods. This is not immediately obvious because Ohio specializes in capital goods (goods used to make other goods, such as machine tools, industrial chemicals, and plastic moldings). Nevertheless, there are well known Ohio consumer items including some Procter & Gamble products, Smuckers jams and jellies, and Day-Glo paints.

Ohio is the site of the invention of the airplane, resulting from the experiments of the Wright brothers in Dayton. On the base are located Wright Hill and Huffman Prairie, where many of the earliest aerodynamic experiments of the Wright brothers were performed. Ohio today also has many aerospace, defense, and NASA parts and systems suppliers scattered throughout the state.

As part of the Corn Belt, agriculture also plays an important role in the state's economy. There is also a small commercial fishing sector on Lake Erie, and the principal catch is yellow perch. Three major amusement parks, Cedar Point, Geauga Lake, and Paramount's Kings Island, are also important to the tourism industry. Of special historical interest are the Native American archaeological sites—including grave mounds and other sites.

The Bureau of Economic Analysis estimates that Ohio's gross state product in 2004 was $419 billionwww.bea.gov/bea/newsrel/gspnewsrelease.htm. Ohio's agricultural outputs are soybeans, dairy products, corn, tomatoes, hogs, cattle, poultry and eggs. Immigration from outside the United States resulted in a net increase of 75,142 people, and migration within the country produced a net decrease of 177,150 people.

As of 2004, Ohio's population included about 390,000 foreign-born (3.4%).

The five largest ancestry groups in Ohio are German (25.2%), Irish (12.7%), African American (11.5%), English (9.2%), and American (8.5%).

German is the largest reported ancestry in most of the counties in Ohio, especially in the northwest. The mixture of urban and rural areas, and the presence of both large blue-collar industries and significant white-collar commercial districts leads to a balance of conservative and liberal population that (together with the state's 20 electoral votes, more than most swing states) makes the state very important to the outcome of national elections. Ohio was also a deciding factor in the 1948 presidential election when Democrat Harry S. Truman defeated Republican Thomas Dewey (who had won the state four years earlier) and in the 1976 presidential election when Democrat Jimmy Carter defeated Republican Gerald Ford by a slim margin in Ohio and took the election.

Ohio's demographics cause many to consider the state as a microcosm of the nation as a whole. Dewey in 1944 (Ohio's John Bricker was his running mate) and Richard M. ISBN 0-271-01876-3.

Education

Ohio's system of public education is outlined in the state constitution's Article VI and Ohio's Revised Code Title XXXIII. Ohio has a Department of Education, a State Board of Education, and then nearly 700 districts that have their own boards of education and administrations. The Ohio Board of Regents governs and assists with Ohio's system of higher education, especially public colleges and universities.

Colleges and universities


  • 13 state universities
    • University of Akron, Akron, Ohio
    • Bowling Green State University, Bowling Green, Ohio
    • Central State University, Wilberforce, Ohio
    • University of Cincinnati, Cincinnati, Ohio
    • Cleveland State University, Cleveland, Ohio
    • Kent State University, Kent, Ohio
    • Miami University, Oxford, Ohio
    • Ohio University, Athens, Ohio
    • Ohio State University, Columbus, Ohio
    • Shawnee State University, Portsmouth, Ohio
    • University of Toledo, Toledo, Ohio
    • Wright State University, Dayton, Ohio (Fairborn, Ohio)
    • Youngstown State University, Youngstown, Ohio
(note: the University of Dayton is not one of Ohio's state universities; it is a private, Roman Catholic university run by the Society of Mary)
  • 24 state university branch and regional campuses
  • 46 liberal arts colleges and universities
  • 6 free-standing state-assisted medical schools
    • Medical University of Ohio (formerly Medical College of Ohio)
      • (note: the Medical University of Ohio will merge with the University of Toledo, effective July 1, 2006)
    • Northeastern Ohio Universities College of Medicine
    • Ohio State University College of Medicine and Public Health
    • Ohio University College of Osteopathic Medicine
    • University of Cincinnati College of Medicine
    • Wright State University Boonschoft School of Medicine
  • 2 private medical schools
    • Ohio College of Podiatric Medicine
    • Case Western Reserve University School of Medicine
  • 15 community colleges
  • 8 technical colleges
  • over 24 independent non-profit colleges

Professional sports teams

Ohio is home to many professional sports teams, including six major professional sports league franchises. Ohio is currently the only state to have teams in each of the major leagues where no one city or metro area could lay claim to the "Grand Slam."

  • Major League Baseball
    • Cincinnati Reds
    • Cleveland Indians
  • National Football League
    • Cincinnati Bengals
    • Cleveland Browns
  • National Basketball Association
    • Cleveland Cavaliers
  • National Hockey League
    • Columbus Blue Jackets
  • Major League Soccer
    • Columbus Crew
  • Arena Football League
    • Columbus Destroyers
  • Minor League Baseball
    • Akron Aeros
    • Chillicothe Paints
    • Columbus Clippers
    • Dayton Dragons
    • Lake County Captains
    • Mahoning Valley Scrappers
    • Toledo Mud Hens
  • Central Hockey League
    • Youngstown Steelhounds
  • East Coast Hockey League
    • Dayton Bombers
    • Toledo Storm
  • National Indoor Football League
    • Cincinnati Marshals
    • Dayton Bulldogs


Transportation

Many major east-west transportation corridors go through Ohio. One of those pioneer routes, known in the early 1900s as "Ohio Market Route 3", was chosen in 1913 to become part of the historic Lincoln Highway which was the first road across America, connecting New York City to San Francisco. In Ohio, the Lincoln Highway linked many towns and cities together, including Canton, Mansfield, Lima, and Van Wert. Major east-west through routes include the Ohio Turnpike (I-80/I-90) in the north, I-76 through Akron to Pennsylvania, U.S. 30 (the Lincoln Highway) a bit further south through Canton, Mansfield, Lima, and Van Wert, I-70 through Columbus and Dayton, and the Appalachian Highway (Ohio 32) running from West Virginia to Cincinnati. Major north-south routes include I-75 in the west through Toledo, Dayton, and Cincinnati, I-71 through the middle of the state from Cleveland through Columbus and Cincinnati into Kentucky, and I-77 in the eastern part of the state from Cleveland through Akron, Canton, New Philadelphia and Marietta down into West Virginia.

State symbols

  • State animal: White-tailed Deer
  • State bird: Cardinal
  • State capital: Columbus
  • State flower: Scarlet Carnation
  • State wildflower: Large white trillium (Trillium grandiflorum)
  • State insect: Ladybug Beetle
  • State song: "Beautiful Ohio"
  • State rock song: "Hang On Sloopy"
  • State tree: Buckeye
  • State fossil: Trilobite genus Isotelus
  • State drink: Tomato juice
  • State reptile: Black racer snake
  • State gemstone: Ohio Flint
  • State motto: "With God all things are possible."
  • Unofficial Motto 1: "The heart of it all." Adopted as part of state bicentennial campaign.

See also

  • List of people from Ohio
  • Ohio Constitution
  • Scouting in Ohio
  • Appalachia
  • Ohio in the Civil War

References

Additional topics

Company HistoryInsurance

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