About Church Mutual

The First 100 years of Church Mutual Insurance Company

by Sharon Thatcher


Continued

A New Generation Pushes Church Mutual to the Top

The 1940s were tumultuous times for the world. For the second time in a single century, war was pitting nation against nation. It was a time of great physical challenge and personal introspection.

This mood seemed to reach all factions of life, including the management of Church Mutual Insurance Company. While the decade began on a quiet note under the continued leadership of Herman Daib, his death in 1941 would signal a growing restlessness for change.


It would take several years however, before the conservative old guard would be replaced by a more youthful and aggressive leadership.

Daib's replacement as president of the company was L.J. Kohloff, owner of a large department store in Merrill: Kohloff-Krueger & Company. He was an elderly gentleman by the time he became president in 1942. An employee at the time, Laura Clausen, remembers little about him, other than his quiet, friendly demeanor. A company history she helped prepare notes that he was President on an "inactive basis" until April 1, 1951.

Although Kohloff apparently made no significant advances in company direction, the board itself was beginning to take on a new look. As old members began to retire, or die, a younger set of faces replaced them. Invigorated by their relative youth, and the return of peace on the world front, they came with revolutionary ideas that shook the establishment. The board was now split between those who felt the company should stay the course, and those who wanted the company to strike out in a new direction toward bigger and better things.

Back at the office these new ideas were just that--ideas. Still governed by the conservative W.H. Dicke, his management style kept the company on solid, yet stationary footing, unyielding to the voices of change. The internal conflict, however, did not go unnoticed. "You could feel there was controversy all around," Clausen remembers.

One of the newer arrivals helping to generate the winds of change was Walter Schuster. An auditor for Wisconsin Public Service, the Merrill native came aboard first as a board member in 1941. In 1945, when Dicke retired, Schuster left Wisconsin Public Service to replace Dicke as office manager. Church Mutual would never be the same.


Born in 1906 to the owners of a West Side grocery store, Schuster spent his youth working at the family business.

He graduated from Merrill High School in 1924. That year the high school year book labeled him "Just the sort of fellow you'd like to have around."

Schuster's arrival at Church Mutual was a major foot in the door for the company's progressive faction. He was given five years to turn the company around.

One of his first moves was to change the sales approach. Since the beginning the company had conducted only one annual mail campaign for business. It now became an ongoing process. It was not easy in those early years without computers. The staff spent hours searching through telephone books and updating their files, then individually prepared hundreds, later thousands, of letters and envelopes for mailing. Laura Clausen remembers that the telephone listings came from the torn pages of directories the employees would rip from phone books on trips out of town.

An automatic renewal system was another important program immediately introduced by Schuster. It eliminated the inefficient system of waiting for new policy applications at the end of each expiration. It resulted in a significantly higher rate of renewals.

At the beginning of Schuster's six years as manager, there were three employees. At the end, it was time for a full-time, working president, and Walter Schuster was handed the title in 1951.

One of his first goals as president was to change the name of the company to make it less restrictive in territory and coverage. The decision to convert "Wisconsin Church Mutual Fire Insurance Company" to "Church Mutual Insurance Company" was made in 1952; however, the transformation would take seven years. At first, the entire name was used on letterhead and advertising materials, accentuating the words "Church Mutual." When the board felt comfortable that the public knew the company by its new name, they dropped the words "Wisconsin" and "Fire."


More changes were on the horizon. In all, there were five mergers during the Schuster years, multiplying the number of company policies with the stroke of a pen.

There were changes in the structure of the Board of Directors, in coverage, territory and employee benefits.

The company's first sales representative was hired in 1954.

Not surprisingly, business growth brought physical expansion. From 1927 throughout the Schuster years the company was located at 1004 E. First St., now Merrill City Hall. It under went three additions at this location. Laura Clausen remembers the constant presence of dust. "We were always adding on. Always moving. Especially my department because it was growing so fast. Our files would get so dusty," she recalls.

By the time of Walt Schuster's retirement in 1971 Church Mutual was a much different company than the one started in 1897 and yet a company proud of its history and the strong roots planted by its staid and stoic founders.

It was a tough act to follow. Who could lead the company beyond the larger-than-life persona that Schuster had developed in 26 years of leadership?


The answer came with the arrival of a young attorney named Dieter Nickel.

Dieter Nickel's rise to President of what would become the country's leading insurer of churches would not have occurred had it not been for his somewhat accidental arrival in Merrill back in 1961. He was just finishing a stint on active duty in the Marine Corps and was looking for a place to start his professional life. Armed with a law degree from Valparaiso University in his home state of Indiana, he first considered practicing law in Elkhart, Indiana; but, his love for outdoor sports led him to turn his focus on law firms in Wisconsin and Minnesota. By chance, an opportunity was available in Merrill. The town caught his attention and in May, 1961 he became partners with Ralph Nienow to become Nienow & Nickel (later the firm of Schmitt, Nienow, Nickel & Nolan).

A year later he added 'Lincoln County District Attorney' to his resume, a job that was then only part-time. He would remain as DA until 1966.

A third job also demanded his attention: the Marine Corps Reserve. For five-and-half years he drove to Oshkosh one weekend a month and devoted two weeks each summer to training camp. He simultaneously juggled his law practice and DA duties.

No one can be so active in a small town and escape notice. Church Mutual took a liking to this up-and-comer and, now growing in need of legal expertise, hired him part-time to sift through their claims and handle settlements. It provided him an intricate look inside the insurance business. His appointment to the board further broadened his view. By the time of Walter Schuster's retirement in March of 1971 Church Mutual knew Dieter Nickel well enough to feel comfortable with handing him the reins of control.

While he had some hesitation about leaving the daily practice of law, he was energized by the opportunity to lead a small company. "When the job was offered to me in 1971, I thought I'd try it the first couple of years, and if it didn't work out, I could always go back (to law)," he remembers.

The election of Dieter Nickel as President of Church Mutual Insurance Company became official on March 17, 1971 . As Nickel describes the moment: "On March 17, I was practicing law. On March 18, I wasn't."

The announcement was made at the Annual Meeting. "There was a big check hanging on the wall," Nickel recalls. "On it was written '$8,500,000,' representing the assets of the company. Schuster's command to me was 'take it and run."

He had just been given the challenge to make the company grow even bigger and better.

Nickel, however, chuckles at the memory. The check, he discovered, was bogus. The company wasn't worth $8.5 million, only a little over $8.4 million. He had a little farther to "take it and run."

Nickel took the next year to plan his goals and strategies. "Within a year or so I presented a growth chart to the board showing how we could, in a reasonable amount of time, become a $100 million dollar company. There were eyebrows raised, but I told them that would be an interim goal for me."

It took 15 years before the goal was achieved. Then it was surpassed.

Most of the growth has occurred with the addition of states. "We have not changed our method of operation, we've just expanded on it," Nickel explains. "We're still using some of the basic concepts I inherited. As you get a foothold in one state, you add another, and another."

The company is currently doing business in all states except Hawaii.

As in the past, progress will be calculated and cautious. "We're in the kind of business where you can grow yourself out of business," Nickel says. "You have to put practical limits on how much you grow. At times change is a little slower than others in the industry, but when we do it, we do it right."

Nickel is quick to pass the credit for the company's success to others, including a good team of officers. Three, in fact, worked side-by-side with Nickel for more than 25 years: Jerry Marnholtz, retired Senior Vice President of Underwriting; Carol Holz, Vice President of Office Services; and Tom Young, retired Executive Vice President. His approach to working with them is simple: "I like to empower my officers and let them do their work with a minimum of interference from me," he says.

Behind the scenes Church Mutual is guided by a Board of Directors that has been greatly diversified in Nickel's 30 years. "They come from a variety of walks of life, but one thing they all have in common is that they've been successful in their private lives," he notes.

They are no longer strictly Merrill based. In addition to five local members, there are members from Texas, Iowa, Southern Wisconsin, and Washington, DC, and the Board includes female and minority representation.

Nickel says he doesn't want just "yes" people on the Board and is pleased with their independent nature. "They are not afraid to challenge management where management should be challenged," he says.

Another part of the Church Mutual success equation belongs to the sales staff, nonexistent for the company's first 57 years. In 1974 the President's Circle was established to honor those who meet certain sales objectives. The reward is a company-paid trip for the eligible sales representatives and their spouses.

"I think that has motivated a lot of our sales representatives," Nickel says. "They really work hard to go on these trips and they're disappointed if they don't make it."

Nickel's regard for all the employees can not be underestimated. "One of Church Mutual's absolute strengths is its employees," he notes. "They're a dedicated, hardworking group of people. One of the biggest kicks for me," he adds, is seeing people expand their horizons even beyond what they believed possible."

Turnover is very nominal for a company its size, less than 6%, especially at the home office. "It seems once they get here, they stay," he is pleased to say.

Of course, the present headquarters for Church Mutual easily houses the 462 employees at the home office (an additional 276 employees work in the field), but in 1971 finding adequate work quarters was one of Nickel's greatest challenges.

"We had again planned to expand the office downtown," Nickel recalls. "We definitely needed more space; but, I felt expanding downtown would just cause more parking problems than we already had. We wanted to find property where we could grow indefinitely."

They found the perfect spot on land owned by Elmer and Vernon Koch. In 1977 this would become the new headquarters of Church Mutual Insurance Company.

A deal was struck with the city of Merrill whereby the city would purchase the old Church Mutual building at a price favorable to both parties if Church Mutual would agree to annex their new property to the city, thus keeping a vital tax source for the city.

"It was a good move," Nickel assesses. "It allowed us to take a good look at how the business flowed and to design the building to enhance the flow through the building." The building doubled in size in 1987 with its first addition.

The company would need that extra space in the years ahead as they continued to expand territory and break sales records.

As a new century approached, however, Nickel felt it was time to step aside and let the vitality of a new leader take the company to its next level of achievement. The decision of who would be handed the reins of the stalwart corporation was not taken lightly. An early front runner, however, was Gerald Whitburn, a Merrill native who had watched the company grow in the backyard of his own home town.

After graduating from Merrill High School, Whitburn left the community for several years. He earned a bachelor’s degree in political science and history from the University of Wisconsin - Oshkosh and a master’s degree in political science from UW - Madison. He later studied management at the Kennedy School at Harvard and the Wharton School of Business at the University of Pennsylvania.

With an interest in government, he spent his early career in Washington, D.C.--three years as assistant to Navy Secretary John Chafee at the Pentagon and six years in the United States Senate.

During the 1970s, he owned and operated an automobile dealership in Merrill and developed real estate, but the call of government service was still strong. He accepted positions in senior management that took him to Madison, Massachusetts, and again to Washington, D.C. For eight years, he served in Wisconsin Governor Tommy Thompson’s administration as Deputy Secretary of the Department of Administration (1987 to 1989); as Secretary of the Department of Industry, Labor and Human Relations (1989 to 1991); and as Secretary of Health and Human Services (1991 to 1995). From January 1995 to July 1996, he was Secretary of the Massachusetts Executive Office of Health and Social Services.

After Massachusetts, he decided it was time to come home.

“It’s good to be around one’s roots,” he said. “When I was in government, I knew the time would come when I would want to get back into private business. My goal was to be in central management with a good-sized company.”

Church Mutual was a perfect fit.

Whitburn rose quickly through the ranks: from vice president of administration in 1996 to executive vice president in January 1998 and then president and chief operating officer in 2000. Nickel would remain as chief executive officer a year longer and chairman of the board for another four, but 30 impressive years under his keen supervision were coming to a close as the Whitburn years were just beginning.

Whitburn would not be a slow starter. He brought the company out of the millennium gates running at a feverish pace. At the time he was named president on January 1, 2000, Church Mutual insured 70,569 religious institutions and had assets of $472.7 million. There were 431 workers at the Home Office and 246 in its 40 offices located throughout the country. Local payroll was $15 million annually. It was doing business in 46 states with a sales growth of 2.6 percent.

Just a year later, sales growth doubled to 5.2 percent. The customer base increased to 72,000 religious institutions. Assets were just under the half-billion dollar mark at $496.4 million. Church Mutual was now doing business in every state except Hawaii.

It had accomplished that impressive growth with the help of just 13 new sales staff out in the field and a local payroll of $16.6 million.

It was a great year, but its success was not one that Whitburn would claim alone. Because the leadership transition had been intentionally planned over the course of several years in incremental steps, Nickel was still very involved with the company. As well, a new member of the management team had been added in 2000--Michael Ravn, another Merrill native. He had joined the company in early 1986 and became vice president of administration. It was obvious that the tradition of strong, aggressive leadership was going to remain at Church Mutual.

Even after Nickel retired as CEO at the end of 2001 and left the day-to-day handling of the company to Whitburn, the rise continued. Sales were up 9.4 percent in 2001, a phenomenal 25 percent in 2002, almost 24 percent in 2003, 16.4 percent in 2004, and 8.4% in 2005. Hawaii, the last market frontier, was added to the fold in 2003 making Church Mutual a 50-state company for the first time.

In 2004, for the first time, sales exceeded the half-billion dollar mark. That put the company in the top 10 percent of all property and casualty insurance companies in the United States and made it the 24th largest writer of commercial multi-peril products.

Rapid growth did create one problem--another space crunch. In 2004, it was time to break ground for a second expansion at the Home Office. Completed in 2005, it houses offices, meeting rooms, and a corporate training center.

By year's end in 2005, assets were at an all-time high of $963.9 million with sales of $556.1 million. For the first time, employment exceeded 500 at the Home Office.

Assets passed the coveted $1 billion mark in early 2006, finishing the year at $1.066 billion. Sales were a record $575 million.

In 2007, the upward trend continued with $579.6 million in sales and assets reaching $1.18 billion. For the 55th consecutive year, Church Mutual retained A.M. Best's A+ (Superior) rating.

Sharon Thatcher is a free-lance researcher/writer in Merrill, Wisconsin. This history was prepared in conjunction with Church Mutual's centennial in 1997 and was published in Ins-Spire, Church Mutual's employee news magazine. It is updated periodically.

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