Omaha worker compensation insurer finds niche servicing small-town employers. BlackEnterprise.com. The nation's most profitable commercial insurer, dollar for dollar, is located in Omaha, but it's not the widely known Berkshire Hathaway Inc. It's FirstComp Insurance Co., which is making a name for itself nationwide by selling only workers' compensation insurance and targeting small businesses and small towns. The company's high profits, accompanied by growth, are the result of what FirstComp executives say is dedication to giving small-town business owners and their insurance agents simple, hands-on service that's often lacking in the insurance world. The customers of small-town agents typically include close friends and relatives, FirstComp executives said. Agents don't want to have to apologize if an insurance adjuster is rude or late paying a claim, or if a customer must negotiate a voice-mail maze to get a question answered. "It has to do with making their lives easy" and giving personal, human service, said Bob Phaneuf, president of FirstComp's underwriting group. Voice mail? Outsourcing calls to foreigners? "It'll never happen here," he said. Now FirstComp is taking two steps designed to enhance its growth at home and in the southeastern United States. It will move into five newly renovated floors this month in downtown's Central Park Plaza at 15th and Douglas Streets, and it will open its fourth regional office, in Tampa, Fla. The changes come after National Underwriter, an insurance trade journal, ranked FirstComp's six-year average operating profit, in relation to its premiums, as No. 1 among 116 companies that write commercial property-casualty policies. FirstComp's profitability ranked third out of 219 property-casualty insurers in the country. The rankings don't include earnings from investments but rather reflect a ratio of claims, operating expenses and other costs compared with premium revenue. The lower the "combined ratio," the better the profit picture. FirstComp's combined ratio over the past six years averaged 82.3, which was two points lower than the second-place company. Some companies have ratios over 100 percent and stay in the black through earnings from their investments. FirstComp has investment earnings, too, but Phaneuf said it can be dangerous to expect investments -- which can be volatile -- to bail out operating losses year after year. FirstComp's premiums for 2007 increased 39 percent to $519 million. The company increased its customers from 60,000 businesses in 26 states about a year ago to 85,000 in 28 states today. This year, the company plans to add Alabama, Delaware and West Virginia. That growth has boosted employment from 516 to 615 in the past year, including 400 in Omaha. The total should reach 700 by the end of 2008. That's why the company is adding office space at Central Park Plaza, including the floor that once housed the headquarters of ConAgra Foods, said Chris Reichert, vice president of sales and marketing. FirstComp recruits heavily from the University of Nebraska in both Omaha and Lincoln and from Creighton University, seeking people with what Reichert called an Omaha-style blend of courtesy, articulateness, knowledge, competitiveness and a desire to help customers solve problems. A typical FirstComp customer has never had a workers' compensation claim, he said. The employee involved is likely to be a close friend and key staff member who has suffered an injury or illness that is causing severe personal and business problems. So the business manager who calls FirstComp may be nervous, upset and unfamiliar with the process of filing a claim. That's why FirstComp always answers customer service calls in person, 90 percent of the time by the second ring of the phone, Reichert said. "We sound like we care, because we do care," he said. FirstComp's underwriters, customer service operators and other staff members are motivated by knowing that they can help people in difficult times. FirstComp, from its founding in 1997, also has an advantage in its computer system, which the company developed on its own, Phaneuf said. He said it is fast, easy to use and dedicated to respecting agents' time demands by being efficient and helpful. The result is that the 7,500 local agents who sell FirstComp coverage may recommend its policies even when they cost slightly more, he said. Nearly all new business comes into the company via its Internet Web site, requiring minimal staff time. That's good because each policy sale is small, averaging a $5,000 premium per year. Often it is less than $2,000. Many of the businesses are so small that they haven't been able to get regular workers' compensation insurance and instead have paid for expensive coverage from state-sponsored insurance pools. Adding up all those tiny businesses, FirstComp now has about 1 percent of the nation's workers' compensation business. In states where it has operated for many years, its share can reach nearly 10 percent. That leaves plenty of room for growth, Phaneuf said, both in new states and within states where FirstComp already operates. There are no plans to branch into other types of insurance. "We stick to our knitting," he said.