There was little at first to suggest that the young business partners were destined for greatness.
One was a high school dropout who left Kane in 1900 to join the Navy.
Six years later he found himself working as a brakeman for the Pennsylvania Railroad.
The other partner was a college graduate who contracted tuberculosis while teaching at a boys’ prep school in Texas. A series of dead-end jobs led him to a pair of promising opportunities in 1920. Both fizzled within a month.
Two years later found the two men, O.G. “Ollie” Crawford and Henry Orth “H.O.” Hirt working as salesmen in the Erie office of a Philadelphia insurance company.
Both were good at their jobs. In fact, the company asked Hirt to establish a new branch office in Scranton.
He wasn’t interested. He and Crawford had other plans.
As Hirt later explained, they had “already made up their minds to join forces and branch out for themselves.”
A new company is born in Erie
That joining of forces led in April 20, 1925, to the formation of the Erie Insurance Exchange.
There were challenges along the way. No one wanted to serve as president. In fact, the job was offered to more than a dozen people before Hirt accepted.
By any measure, what Crawford and Hirt started has been hugely successful — a Fortune 500 company with 6,800 employees in 12 states and Washington, D.C. Half of those work in Erie County, making it the county’s top employer.
There are other measures of that success, including 14,000 licensed agents who help make the company the 13th largest auto insurer and the 12th largest homeowners insurer in the country.
A century later, business is still shaped by words of co-founder Hirt
What’s the secret to the company’s success?
A long list of ratings organizations, including J.D. Power, U.S. News and World Report and Nerd Wallet give the company high marks, pointing to low rates, high customer satisfaction and efficient claims handling.
Top company leaders, however, point to something else. They say the company’s success flows from an unflinching adherence to the philosophies and direction set down nearly 100 years ago by Hirt.
Folks at Erie Insurance take seriously the blueprint that Hirt left behind. Ask Tom Hagen, the company’s chairman, who went to work for his future father-in-law as a file clerk in 1953.
Hagen, now 89, has been the editor of multiple editions of “H.O. Hirt In His Own Words,” a book of about 180 pages that includes the writings and speeches of Hirt.
The book also includes the company’s founding purpose, which appears prominently today on the company’s website: “To provide our Policyholders with as near perfect protection, as near perfect service, as is humanly possible, and to do so at the lowest possible cost.”
Hagen, who would eventually run his father-in-law’s company as CEO between 1990 and 1993, likens it to the Bible’s Golden Rule that advises treating others as you would like to be treated.
“That is the core value of the company,” he said.
Some roll their eyes, but not company insiders
The words are more than another mission statement drafted and revised by committee.
Those words are seen as the company’s North Star in the way that a nation looks to its founding documents.
Hagen is not naive.
“There are eye rolls from people who think it’s kind of corny,” he said. “It’s real. I have experienced it for the past 70 years.”
Over more than 50 years of leadership, Hirt was able to share his approach widely.
“H.O. Hirt In His Own Words” offers a portrait of the Hagen’s former boss and father-in-law. The book includes jokes, drawings and — improbably — Hirt’s opinions on holiday stuffing.
More importantly, it contains Hirt’s guidance, penned in 1956, for navigating tough times.
According to the book: “We told our Adjusters that we still expected them to treat others as they would like to be treated themselves, that there would be no chiseling. We told them that while the ERIE (Insurance) was losing some money, it did not propose to lose its honor.”
CEO says the company continues to learn from its past
Tim NeCastro, who was named CEO in 2016, said he is humbled when he thinks about the challenges faced by his predecessors.
“I never met H.O., but on a personal level he inspires me,” NeCastro said. “He ran the company four years and five months before the Great Depression hit.
“The pandemic was hard and this hyper-inflation is hard,” NeCastro continued. “When I feel discouraged, I think about what they went through. I try to think, what would H.O. do.”
That approach guided the company’s reaction recently when inflation prompted some other insurance companies to raise premiums by as much as 27% to 30%.
“Our philosophy was we didn’t want to shock anybody so we raised our rates by 7%,” NeCastro said.
“We don’t panic here,” NeCastro said. “We are in a downcycle. We lost some money in the insurance industry. We have also made money. We built this organization to last.”
The more modest rate increase is one that harkens to H.O. Hirt, but it’s not the only respect in which the company takes its cues from its founders.
“Steady as you go is Erie’s foundational principal,” NeCastro said. “That means we want to adhere to values and principals that were put in place by the founder. We still preach from the same mission statement he wrote in the early 1920s.”
Hirt was a one-man complaint department
NeCastro said in the company’s infancy, anyone could walk into Hirt’s office, shake his hand and offer a comment or complaint.
“I can’t be the complaint department, but it’s important to have a complaint department,” NeCastro said. “The world is changing. How people do things is changing. But you can still do things with the human touch.”
Not everyone is going to embrace that.
Even though a newly completed $147 million office building was sitting empty, Erie Insurance was cautious about returning employees to work following the pandemic.
After a series of shifting policies, some of which allowed many employees to work remotely most of the time, the company decided about a year ago that employees would be allotted 52 days a year, to use at their discretion in which they could work remotely. The rest of the time, they would be expected at the office.
At first, “There was some gnashing of teeth,” NeCastro said.
“It has died down,” he said. “We did not experience abnormal levels of attrition. Employee satisfaction is pretty high. I think employees came in and began to enjoy life as it was.”
NeCastro said he understands that childcare makes a conventional work arrangement difficult for some and said the company is working on initiatives to address the problem.
It seems fair to conclude that a CEO who invited customers into his office and chastised insurance agents who didn’t publicly share their home numbers would favor the notion of in-person work.
“There are people who value this kind of culture, this kind of behavior. Those are people who keep the gate,” NeCastro said. “We are trying to find people who believe the same things we do.
“If you don’t care enough about us to come into work, then don’t. That’s fine. There are a lot of other opportunities out there. But relationships are the crux of what makes Erie special.”
A policy of doing the right thing
Matt Cummings, a spokesman for Erie Insurance, said he remembers one of the first messages he ever heard from NeCastro.
Cummings said NeCastro said the most important part of his job was doing the right thing for people, not making money.
As Cummings remembers NeCastro saying, “The profits will happen.”
NeCastro said the company’s priorities were made clear to him when he interviewed with the board.
“I was asked, ‘Do you understand the value system of this company, and what will you do to make sure it continues?
“That was more important than understanding the regulations in Indiana,” NeCastro said. “My job was to espouse what Erie is and to make people feel accountable.”
Like Hagen, NeCastro knows that devotion to the company’s cofounder and his views might strike some as corny.
He makes no apologies. The company’s approach after all, has led to the employment of 3,400 people in Erie, millions of dollars in philanthropy and tens of millions in investment in public projects.
“Those quotes need to bounce off the walls around here,” NeCastro said.
More:Erie Insurance added hundreds of new employees in 2023. Will hiring trend continue?
Hagen went to work alongside Hirt, who served as CEO for more than 50 years, at a time when the company had fewer than 100 employees.
It was easier in those days, Hagen said, for the philosophy of the company’s leader to become engrained in the culture.
More:Erie Insurance added hundreds of new employees in 2023. Will hiring trend continue?
“He left an indelible imprint on the company,” Hagen said. “His values were just well understood. Everyone who worked with him embraced that culture and those values.”
In a year of celebration, Erie Insurance employees can expect to hear more about H.O. Hirt and his blueprint for business and life.
“You’ve got to make money here,” NeCastro said. “We have to operate a business, but we have to do our share for our community, our employees, our agents and our customers.
“Our formula start and ends with people,” he said. “That’s attractive to people. We are not deceiving people. We are not zigging and zagging. We are not changing who we are.”
Contact Jim Martin at jmartin@timesnews.com.
Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.