In the late 1990s, growth was good at Meadowbrook Insurance Group Inc.
At that point, Bob Cubbin was the president and COO and in charge of managing the company’s day-to-day operations. The short-term outlook was rosy as the insurance provider glided toward the start of the 21st century, and the company was in the process of branching into new noncore business areas, attempting to increase the breadth of its product offerings.
But then, the situation rapidly changed.
Fast growth coupled with a period of low pricing in the insurance industry led to financial strain at Meadowbrook. The company could no longer adequately support its growth, which caused profits to drop and, in turn, industry ratings agencies to downgrade Meadowbrook’s standing.
“This was all caused by a drive to grow too fast, particularly at a time when pricing in the insurance business was at a low,” says Cubbin, now Meadowbrook’s president and CEO. “Our company really deviated from the business plan, and on top of that, it really wasn’t a favorable environment (for rapid growth).”
The company’s financial situation was stabilized by what Cubbin calls a “get back to basics” approach. It required a willingness on the part of the management team to pull together, evaluate the state of Meadowbrook, reaffirm the vision and mission to the entire company, and refocus everyone on the building blocks that helped construct the company in the first place.
What Cubbin and his leadership team learned then are lessons that last a career. The principles that drove Meadowbrook’s turnaround a decade ago are also helping the company weather the current economic storm.
This is what Cubbin learned then and how it’s still helping Meadowbrook now.
