HOW CANAL’S APPROACH HAS PAID OFF
The 1980s weren’t always pretty. Shoulder pads, big hair and acid washed jeans – need we say more? How about sharp economic fluctuations – in fact, the prime interest rate in 1980 topped out at a stunning 21.5 percent (compared to today’s rate around 3.25 percent). The price of gas rose 200% from just 50 cents a gallon in the 1970s to $1.50 by the end of the eighties.
Yet Canal never lost focus, and the 1980s was actually one of the best periods in our history. During this decade, policyholder surplus grew, as did the asset base. Premiums rose an incredible 1300% from initial levels in the 1970s of $11 million to $148 million. Canal’s performance was particularly exceptional from 1982-86, even as the insurance market was experiencing difficulties on all fronts, especially in the transportation sector, and the capacity for writing new business was limited.
“Competitors who didn’t understand the transportation industry may have been struggling, but we stayed on course in the niche we know best,” explains David J. Firstenberg, president and chief executive officer. “We celebrated our 50th anniversary in 1989, and I think we had a strong foundation already established, and we understood what clients required to succeed because we had grown with them.”
At the time of this milestone anniversary, the management team had been together for forty years. Canal was, as they say, “humming on all cylinders.” But change was coming. In 1992, Canal moved to its current location on Stone Avenue, and in 1998, Charles M. “Chuck” Timmons, Jr., became president and William R. “Rick” Timmons, III, then senior vice president of investments, also assumed the roles of Canal’s secretary and treasurer. Canal was tested as premiums fell 15% from 1995 to 1999. However, staying true to the model that had been laid by their predecessors, the management team let asset growth and building surplus rule the day, and each year both continued to grow.
“Only true specialists write trucking business,” says Firstenberg. “Department of Transportation regulations and monitoring practices have always been a challenge, yet we grew up in this environment. We get it. We’ve been on this road, quite literally, since the beginning of the interstate.”
Even as Canal headed into the new century, the company remained disciplined. Premiums tripled from 1999 to 2004, reaching $530 million. Assets exceeded $1 billion and surplus was approaching $500 million, all excellent markers by A.M. Best standards. To maintain growth at that rate required more change – and technology. Efficiency and data-driven decision making became king. DOT regulations continued to multiply. Automated rating systems and pricing algorithms were the talk of the day. Every dollar motor carriers could save was critical, and insurance was a huge cost consideration.
“It remains a process today – layering technology and cost savings with good old-fashioned customer service,” says Firstenberg. “And a company like Canal can really find that sweet spot where the two meet. Looking back on how the different decades have molded Canal’s approach highlights why longevity makes a difference – it’s the expertise gained across those years that ultimately helps clients survive the inevitable bumps in every road.”