Company History

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, remembered 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 remembered.

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 yearbook 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. Clausen remembered that the telephone listings came from the torn pages of directories the employees would rip from telephone 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, 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 East First Street, now Merrill City Hall. It underwent three additions at this location. Clausen remembered 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 recalled.

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, Ind.; 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-a-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 1971, Church Mutual knew 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 remembered.

The election of Nickel as president of Church Mutual Insurance Company became official on March 17, 1971. As Nickel described 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 recalled. “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, chuckled 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 occurred with the addition of states. “We had not changed our method of operation — we’d just expanded on it,” Nickel explained. “We were still using some of the basic concepts I inherited. As you got a foothold in one state, you added another and another.”

The company was finally doing business in all states except Hawaii.

As in the past, progress was calculated and cautious. “We were in the kind of business where you could grow yourself out of business,” Nickel said. “You had to put practical limits on how much you grow. At times, change was a little slower than others in the industry, but when we did it, we did it right.”

Nickel was 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, retired vice president of corporate services; and Tom Young, retired executive vice president. His approach to working with them was simple: “I liked to empower my officers and let them do their work with a minimum of interference from me,” he said.

Behind the scenes, Church Mutual was guided by a board of directors that had been greatly diversified in Nickel’s 30 years. “They came from a variety of walks of life, but one thing they all had in common was that they’d been successful in their private lives,” he noted.

The board was no longer strictly Merrill-based. In addition to five local members, there were members from Texas, Iowa, Southern Wisconsin and Washington, D.C., and the board included female and minority representation.

Nickel said he didn’t want just “yes” people on the board and was pleased with their independent nature. “They were not afraid to challenge management where management should be challenged,” he said.

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

“I think it motivated a lot of our sales representatives,” Nickel said. “They really worked hard to go on those trips, and they were disappointed if they didn’t make it.”

Nickel’s regard for all the employees could not be overestimated. “One of Church Mutual’s absolute strengths was its employees,” he noted. “They were a dedicated, hardworking group of people. One of the biggest kicks for me,” he added, “was seeing people expand their horizons even beyond what they believed possible.”

Turnover during Nickel’s tenure was very nominal for a company its size, less than 6 percent, especially at the Home Office. “It seems once they got here, they stayed,” he was pleased to say.

In 1971, finding adequate work quarters was one of Nickel’s greatest challenges.
“We had again planned to expand the office downtown,” Nickel recalled. “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 assessed. “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 hometown.

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, Mass., 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. When he was named president on Jan. 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.

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.

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 percent 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, and Church Mutual used Madison-based Flad and Associates, the company that had overseen earlier construction at the site, to handle the work. The new 70,000 square foot wing was designed to accommodate growth and training needs through 2015 and came in on time and on budget — an accomplishment that, in large part, was due to the efforts of Holz, who served as project manager.

“Church Mutual has always been committed to allowing its employees to explore new opportunities and expand their skills, and this project is a great example,” Holz said. “I had never overseen a project of this type before; yet because I showed interest in learning new things and an enthusiasm for challenges, I was given the chance.”



The expansion’s 2005 grand opening came not a minute too soon as employment at the Home Office exceeded 500 for the first time.

But 2005 was not an entirely rosy year for Church Mutual. Hurricane Katrina, one of the greatest weather catastrophes in U.S. history, hit the southern part of the U.S., and Church Mutual customers felt its wrath. The company paid $114 million to the 1,330 customers directly affected by the hurricane.

Despite the financial challenges this horrendous storm created, Church Mutual ended the year with assets at a then all-time high of $963.9 million with sales of $556.1 million.

Assets passed the coveted $1 billion mark in early 2006, finishing the year at $1.066 billion, and sales were a record $575 million. In 2007, the upward trend continued with $579.6 million in sales and assets reaching $1.18 billion.

In 2008, sales were just under $569 million as Church Mutual surpassed 100,000 religious institutional accounts. However, a record claims year (40,498), combined with a volatile stock market, drove $33 million in losses for the company, and assets fell to $1.14 billion.

Church Mutual stayed the course, and 2009 saw a return to profitability as the company’s policyholders’ surplus reached a record $392.6 million and admitted assets a record $1.19 billion, with sales at $568 million.

This was also the year that a new president took the helm: Michael Ravn. A Merrill native, Ravn’s family has ties to Merrill that date back to 1892. “My great grandfather immigrated from Norway in the early 1880s and established a hospital here,” Ravn said. “For more than a century, there was a Ravn providing medical care to the Merrill community.”

Ravn, who opted for a law degree rather than a medical one, first joined Church Mutual in 1986 as a claims examiner and was promoted to claims attorney the following year. He moved steadily up the ladder over the years, eventually taking over from Jerry Whitburn in 2009.

“Throughout my career, I was exposed to the entire insurance process, from underwriting through claims, which was excellent preparation for my role as president,” Ravn said. “I had the good fortune to serve under two exceptional leaders — Dieter Nickel and Jerry Whitburn. Each had a clear vision for the company and the skills and commitment to make their visions come true: Dieter successfully took the company into all 50 states, and Jerry knew how to mine the growth opportunities in each one.”

Never a company to rest on its laurels, Church Mutual knew that its continued success would require a commitment to its traditional strengths — hard work, fair pricing and customer-first service — tempered by the realities of a changing workplace.

“We’re at a bit of a tipping point,” Ravn said. “In the past, we were able to grow much of our own talent, and there was a strong commitment to promoting from within. In recent years, we’ve sometimes needed to look to outside talent to fill some key positions, such as in technology.”

Economic changes have also driven a more metrics-focused approach to business decisions. “We are committed to creating strategies based on analytics — not anecdotes,” Ravn said.

This focus has led to a number of big changes in recent years:

Broker/Specialty Markets Unit: Across the U.S., a significant piece of religious institutional business is written through brokers, but because Church Mutual didn’t historically sell through this model, many worship centers couldn’t benefit from the exceptional coverage, experience and service that the company has to offer. Recognizing this critical gap, Church Mutual decided to pursue this opportunity more aggressively beginning in 2011 and now has a $130 million book of business through brokers and more than 50 staff members who serve this market.

Closing field offices: Over a three-year period, Church Mutual closed its 40 small sales offices throughout the country and implemented a home-based office model. This saved money and allowed sales staff to live either in or closer to their sales territories.

Centralized customer service representatives: Exceptional customer service has long been a Church Mutual hallmark. To ensure that the company could continue to meet its high standards of service excellence, Church Mutual decided to bring all customer service representatives back to Merrill, rather than allocating a few representatives per service area. This move led to a dramatic increase in customers’ access to customer service, helped ensure training and service consistency and eliminated staffing challenges driven by vacations and other leaves of absence. Customers report that Church Mutual service is efficient, responsive and better than ever.

Commercial Lines Operations: This department is the result of a 2012 merger between Underwriting and Sales and Marketing. “This merger aligned the goals of the sales and underwriting departments,” Ravn said. “It eliminated silos and created a sense of collaboration and synergy that optimized our ability to put good, profitable business on the books that benefited both our customers and our company.”

Entry into the school market: Church Mutual has always been extremely selective about entering new markets. Religious institutions have been core to operations since the company launched in 1897 and as Dieter Nickel often said, much of the company’s success has come from “sticking to our knitting.” In 2013, Church Mutual decided to leverage its vast expertise in workers’ compensation and commercial automobile insurance at religious schools with a move into the public school market. As of third quarter 2013, Church Mutual had written policies in six school districts and believes this market offers a high level of future opportunity.

College outreach: Recognizing that insurance is an industry that many recent college graduates fall into rather than seek out, Church Mutual created a “Think Insurance” retreat designed to educate young people about the benefits of a career in the field. “We’re on the verge of huge turnover in our industry,” Ravn said. “Our goal is to get people excited about the industry by showing them how we protect our customers and their futures.”

These changes have helped Church Mutual to survive in the face of intense competition and myriad challenges. The year 2010 was a record in three categories — policyholders’ surplus hit $413.7 million, sales were at $584.3 million and assets increased to $1.2 billion — but more than 1,700 tornado touchdowns and $156 million in damage to customers’ properties made 2011 an extremely challenging one. Premium volume dropped to $583 million and surplus dropped to $376.2 million. Assets remained at $1.2 billion, and strong surplus growth in previous years allowed the company to remain financially solid.

Church Mutual rebounded in 2012. Assets increased 4.5 percent to $1.23 billion, and premium volume was up 1.5 percent to $591.9 million. The company had the lowest paid claims since 1994 — a number that can be attributed to both a kinder, gentler Mother Nature and strong across-the-board efforts to help customers more effectively manage risk. The company is pleased to report that 2013 is on track to be equally good.

What does the future hold for Church Mutual?

As the old saying goes, the only constant is change, and as Church Mutual has proven time and again, change can be good. Throughout its long history, Church Mutual has found effective ways to respond to change without compromising its core belief that the customer is the owner and all decisions should reflect this.

In its early years, Church Mutual was a small-town insurance company with a small-town mindset. As the years have passed, the company has moved into every one of the 50 states. It has been forced to operate in an increasingly competitive world, and it has become critical for Church Mutual to develop a new approach to business. Today, the company focuses on benchmarks and metrics. It has beefed up its actuarial staff, its finance team and its IT Department. And the emphasis has switched to analytics — not anecdotes. But even as the company focuses on the bottom line, it never forgets that Church Mutual’s customers are the company, and everything is done with that principle foremost in mind.

Thank you for putting your faith in the people and services of Church Mutual Insurance Company.

The Church Mutual history was written by Sharon Thatcher (1897-1997), Rick Schaber (1997-2004) and Vicky Franchino (2004-2013 and sidebars).

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Church Mutual Insurance Company
P.O. Box 357 | 3000 Schuster Lane | Merrill, WI 54452-0357
Telephone (800) 554-2642 or (715) 536-5577

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