New Jersey is still called The Garden State, but its economic prominence developed during the Industrial Revolution. Trenton served only secondarily as the capital of state government. It was really the capital of ceramics, rubber products and wire cable. Similar industrial capitals spanned from north to south, from great textile mills in Paterson to huge glassworks around Millville. New Jersey could have been called The Manufacturing State.
Factory jobs attracted European immigrants and American farmers to tightly knit New Jersey cities throughout the 1800s, especially after the Civil War. By the end of the century, factory life affected politics, and the seeds of New Jersey Manufacturers Insurance Company (NJM) were planted.
The Progressive movement swept both political parties and, in some states, succeeded in enacting workplace safety standards, a minimum wage, housing regulations, anti-trust measures and tax reforms. New Jersey political leaders resisted Progressive changes until voters in 1910 installed a Democratic Legislature and an idealistic Governor, Woodrow Wilson, who boldly utilized the office as a stepping-stone from being President of Princeton University to President of the United States.
Fulfilling a Wilson campaign pledge, New Jersey joined nine other states in 1911 to create the nation's first permanent workmen's compensation systems, modeled after European laws of the 1890s. New Jersey employers were now required to provide injured workers with medical care and partial wage replacement. Responsible factory owners were concerned about the financial impact of the new law. They needed to make sure that safe working conditions and a low occurrence of injury in a well-run plant translated into savings in their insurance premiums.
In response to this unprecedented need, the Special Insurance Committee of the Manufacturers Association of the State of New Jersey (now the New Jersey Business & Industry Association ) made a bold recommendation — that representatives of individual employers should capitalize a new insurance carrier that would serve Association members, emphasize safety, and operate in the mutual fashion solely for the service and benefit of its policyholders. To assure NJM's dedication to this mission in perpetuity, the founders loaned capital and placed its stock ownership "in trust for the mutual advantage of policyholders, to avoid any possibility or opportunity for personal benefit or enrichment … other than the policyholders themselves," as still required by today's Deed of Trust.
New Jersey Manufacturers Casualty Insurance Company was incorporated on June 7, 1913, and business began in two small rented rooms in the American Mechanic Building in Trenton. After its initial success and staff growth, the Company moved in 1920 to a Victorian residence at 175 West State Street.
New Jersey's manufacturing-based economy expanded after the United States entered World War I. NJM attracted a strong customer base for both workmen's compensation and, starting in 1917, automobile bodily injury liability coverage for businesses. It also finished repaying the capital originally loaned by its founders. Having accomplished its initial goals of growth, efficiency and financial strength, the Company revised its bylaws in 1917 to authorize the sharing of its success with policyholders by the payment of dividends.
On January 31, 1918, the Company declared the first dividend at the rate of 20% of premiums on contracts effective in 1917. In every successive year without interruption, NJM has returned dividends to policyholders in varying amounts for a grand total of approximately $5.5 billion.
In 1921, New Jersey Manufacturers Association Fire Insurance Company was established to cover property loss or damage to commercial automobiles, private automobiles and homes. Thus NJM became involved in all of the lines of insurance that comprise the vast majority of its business today. In 1951, this Company was reconfigured and renamed New Jersey Manufacturers Indemnity Insurance Company so that it could consolidate auto bodily injury liability and property coverages into one entity.
To improve its workmen's compensation service in the 1920s, NJM started treating injured workers directly at clinics in industrial centers of Newark, Clifton, Trenton and Jersey City. Another clinic was opened in Hillside in 1952. These conveniently located medical teams specialized in evaluating and treating work-related injuries, and proved to benefit the worker and employer alike through most of the 20th Century.
During the Great Depression of the 1930s, premium volume and assets for the two NJM Companies declined, but the organization persevered as a result of its financial strength, operating efficiencies and the staunch determination of employees. Despite the nation's unprecedented economic hardships, NJM continued returning dividends to policyholders every year.
After proving its durability, NJM was an especially attractive insurer to the new and expanding businesses that boomed during and after World War II. By the 1940s, NJM was writing about 20% of all workmen's compensation premiums in New Jersey, far outdistancing its competitors. An important reason for NJM's dominance was its Engineering Department, which methodically assisted policyholders to improve the conditions of their workplaces and thereby avoid accidents that would lead to higher premiums. This discipline prevails today, as does NJM's firm position as New Jersey's largest writer of workers' compensation insurance.
Success and policyholder growth necessitated continued staff expansion and more office space. NJM moved to a low-rise office complex at 363 West State Street in 1947, and enlarged it in 1954.
To further control costs for workers' compensation policyholders, a unit was established to investigate allegations of fraud. Experienced claims adjusters were assigned to follow up clues that a reported injury might be fake, exaggerated or unrelated to the employee's job. By concentrating on such cases, this staff developed specialized knowledge and investigative skills. By the 1960s, the unit was regularly conducting surveillance activities, surreptitiously using both still photography and silent 8 mm films to document evidence.
Today, NJM's Special Investigations Unit (SIU) is a 41-member team of experienced insurance professionals, former police detectives and prosecuting attorneys who use modern investigative tools to probe fraudulent activity in all lines of insurance. The SIU's goal is not only to prevent or recover fraudulent insurance payments, but also to deter fraud by working closely with state prosecutors to thoroughly and fairly punish the wrongdoers.
During the 1950s, NJM established small offices in several industrialized areas to provide both underwriting and claims services. These offices were consolidated into NJM's first Northern New Jersey Branch Office in 1961 in East Orange, which was moved to Roseland in 1984 and to Parsippany in 1996 to permit continued growth.
In 1965, the Indemnity Insurance Company was merged into the Casualty Insurance Company to form today's New Jersey Manufacturers Insurance Company. The next year, the Home Office was relocated to NJM's current 100-acre campus on Sullivan Way in West Trenton, which has enabled the efficient addition of staff and modern, comfortable facilities.
NJM continued to flourish in the late 1960s and early 1970s, but these were tumultuous times. In 1973, New Jersey auto insurance was converted to a no-fault system without effective controls over litigation. NJM continued its focus on cost-efficient service to safety-conscious drivers, providing a haven to its policyholders amid havoc in much of the rest of the auto insurance market.
New Jersey Re-Insurance Company (NJRe) was established in 1977 in response to rising premiums charged in the reinsurance market and the belief that NJM's conservative operating philosophy could provide quality coverage more economically. While NJM continues to purchase reinsurance coverage from independent sources, it also safely secures significant protection from NJRe at a reasonable cost.
During the 1980s and 1990s, NJRe expanded its lines of business by offering reinsurance to other insurers and providing primary coverage for workers' compensation, personal excess liability "umbrella," flood, personal auto and residential insurance in a manner that has opened NJM's products and services to a broader market of customers at appropriate pricing. (As of January 1, 2007, NJRe was no longer issuing or renewing reinsurance contracts with other carriers.)
In 1996, NJM was the first workers' compensation insurer to be state-certified as its own Managed Care Organization (MCO). While some other property/casualty companies utilize outside medical vendors to manage care, NJM seamlessly provides medical evaluation, case management, claim adjustment and, when appropriate, modified return-to-work programs. The MCO designation formalized NJM's long history of utilizing experienced, cost-effective practitioners who specialize in the treatment of job-related conditions.
The MCO today includes health care professionals and facilities that provide treatment and work with NJM to get the employee back to work as quickly as possible. Our MCO network health care providers contract directly with NJM or through our Preferred Provider Organization (PPO) partner, Horizon Casualty Services. As manufacturing declined in New Jersey, NJM gradually closed its clinics, including Clifton and Hillside in 2001, in order to better adapt resources to current business needs.
As a further protection for workers' compensation policyholders, NJM's Medical Utilization Department evaluates and manages cases for both quality of care and appropriate billing.
Employers who are committed to maintaining safe work environments understand the value of NJM's seamless services in all aspects of workers' compensation. A salaried Special Representative is assigned to maintain contact with each policyholder. Specialists from the Engineering Department inspect work locations, and the Claims Department Call Center processes real-time accident reports. When legal defense is necessary, it is provided by an in-house team of 17 attorneys who are assigned solely to workers' compensation files. Each of these attorneys has been specially certified by the New Jersey Supreme Court in workers' compensation law.
In 1999, two wholly owned subsidiaries were formed and were licensed for all property/casualty coverages in order to give NJM immediate flexibility in addressing any future market condition. New Jersey Casualty Insurance Company started writing assigned risk business on behalf of the New Jersey Workers' Compensation Insurance Plan, and New Jersey Indemnity Insurance Company did the same for the New Jersey Personal Automobile Insurance Plan. Such policies are assigned to the NJM Insurance Group proportionally to its share of the market, as required by state law. Previously, NJRe had written the Group's assigned risk policies.
In 2000, NJM opened customer service, claims and sales operations at its first Southern New Jersey Branch Office in Hammonton. The leased facility on South White Horse Pike was enlarged in 2001 and again in 2002, and was moved to more spacious quarters on South Grand Street in March 2004. NJM moved into its newly constructed 147,000-square-foot permanent facility on 12th street in Hammonton in late 2010.
In April 2004, A.M. Best Company, the country's preeminent insurance rating agency, gave its highest grade to New Jersey Manufacturers Insurance Company and New Jersey Re-Insurance Company for their financial strength and demonstrated ability to serve policyholders. The rating of A++ (Superior) was reiterated most recently in January 2013. New Jersey Casualty Insurance Company and New Jersey Indemnity Insurance Company — wholly owned subsidiaries that handle NJM's assigned-risk obligations — continue to be rated A (Excellent). See latest A.M. Best ratings.
In 2008, NJM's Board of Directors elected Bernard M. Flynn as President and Chief Executive Officer, succeeding Anthony G. Dickson, who retired after 32 years of service with the Company, the last 17 as President.
NJM held a Grand Opening celebration for its new Hammonton office in January 2011, after 10 years spent in rental facilities. Visiting dignitaries included Hammonton Mayor Steve DiDonato, Commissioner of Banking and Insurance Tom Considine, Congressman Frank LoBiondo, and Lt. Gov. Kim Guadagno. Guadagno delivered the keynote address at the Grand Opening event.
"NJM is a great New Jersey story," she said during her remarks. "You committed your resources, your human resources, and provide an incredible product."
In 2013, NJM celebrated its centennial anniversary. An integral part of the celebration was a year-long "DNT TXT N DRV" pledge campaign. More than 50,000 people pledged to avoid texting while driving and help make New Jersey's roads safer.