Students of business strategy learn that a strategic plan must include a mission statement that clearly describes what the business does.
Two models of elegantly simple and effective mission statements are those at Disney (“To make people happy”) and Lego (“To inspire and develop the builders of tomorrow”). Frank O’Neil, chief communications officer at ProAssurance Corporation, told students on November 29, 2016 in the combined undergraduate capstone and MBA class “Strategic leadership through the eyes of the C-Suite” that ProAssurance’s mission statement is “We exist to protect others.” For an insurance company like ProAssurance that is a powerful summary of what it does.
ProAssurance’s primary line of business is healthcare professional liability insurance. The company was founded in Birmingham in 1975 as a mutual insurance company owned by physicians who found that there were no insurance carriers willing to provide professional liability insurance to physicians in Alabama. Mr. O’Neil described how the company started with $8 million in capital borrowed from a Birmingham-based bank, which was repaid just a few years later. The company went public in 1991. Today, the company has total assets of over $5 billion and a market capitalization of over $2.8 billion. It operates throughout the United States, and continues to be headquartered in Birmingham.
ProAssurance’s strategy has been to respond to trends in the health care market by offering professional liability insurance not only to physicians, but also to those lower-cost health care providers who are increasingly substituted for physicians as the cost of health care increases. For example, ProAssurance offers professional liability insurance to podiatrists, who are treating some patients formerly treated by orthopedic physicians, and to home health care practitioners, who are treating patients formerly treated by physicians in hospitals. The company has also diversified into new lines of health-centric insurance, such as medical device liability insurance, “captive” insurance programs for health care professionals, and workers compensation insurance.
A team of students presented their own analysis of ProAssurance’s strategy to Mr. O’Neil. They asked him about the company’s recent diversification into providing services to clients desiring to self-insure through “captive” insurance programs. Mr. O’Neil noted that such programs have the potential to be profit centers for clients, not only for health care professional liability but also for workers compensation liability.
“Strategic Leadership Through the Eyes of the C-Suite” is taught by Collat School of Business professor Stephen Yoder, and features visits from members of the executive suites of public or other large complex organizations who discuss their organizations’ strategies and how they are developed and implemented.
Pictured left to right: Ryan Creel, Lee Proffitt, Mr. O’Neil, Sam Sullivan, Dalton Bradshaw