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When Bruce Kelley was a law student at the University of Iowa in the late 1970s, he focused his studies on corporate insurance issues, topics that weren’t top of mind, to say the least, for most future attorneys.

“I studied both debt financing of insurance companies and demutualizing insurance companies,” he said. “Even though there are a lot of insurance companies in Iowa, relatively few people were interested in that.”

Kelley, 55, remains an enthusiastic lifelong student of the insurance business, and one of its more successful practitioners. For the past 17 years, the low-key executive has led Des Moines-based EMC Insurance Cos. through significant growth as its president and CEO, yet at the same time helped protect it from the periodic economic storms that have pummeled the industry.

“It’s a major accomplishment to stay in the insurance business through good times and bad times,” he said, “to not get overly optimistic in the good times, and to prepare for those tough times that inevitably come because of the cycles.”

Part of Kelley’s long-term perspective may have come from studying history while an undergraduate at Dartmouth College. Or it may be that he’s the fourth generation of his family to serve as president of the company, which his great-uncle, John A. Gunn, founded nearly a century ago as Employers Mutual Casualty Co.

“The family had been involved from the beginning and taken the company through a number of insurance cycles and difficult economic situations,” Kelley said. “So I prepared myself for the opportunity.”

Kelley and his wife, Susy, have three adult children; he said it’s too early to know whether their twin sons or daughter, who are still in college, have any interest in pursuing insurance careers.

Kelley is the first to acknowledge the complexity of the property-casualty business, which is why choosing the right people is essential, he said.

‘Good student’

“I would characterize my leadership style as being one of trying to assemble an excellent staff,” he said. “So the careful hiring of very good, competent people in their area, and then constantly trying to help those people work together to build the company.”

George Kochheiser, who preceded Kelley as EMC’s president and chief operating officer and also seems gifted at understatement, said bringing him on as president and CEO “worked out really well.” Kochheiser, who now lives in Cincinnati, retired from EMC’s board last year.

“He’s a good student and understands the business very well,” Kochheiser said. “He explains things very well to the board, and I think he’s much appreciated.”

In addition to choosing the right people, Kelley said EMC is successful and has grown because it has meticulously maintained a unified computer systems architecture, which makes it easier for agents to do business with the company and helps attract more of their business.

“We’re able to do things very quickly to make adjustments to our systems, and as a result, the functionality of our systems is superior to other companies that have to cobble together systems or they have to completely rewrite their systems,” he said. “For example, when the Internet came out, we were all ready with online assistance with drill-down capability. We were all ready for Y2K because of what we did early on to make our systems work. And when Sarbanes-Oxley came in, our claims system was really second to none, so we really had few issues.”

The severe weather and unusually heavy catastrophic insurance losses in 2008 took their toll on the entire property and casualty industry, Kelley noted.

“We believe we’re writing (policies) in the right places and have adequate reinsurance where necessary in order to handle storms,” he said. “We did extensive rewriting after the late ’90s in some of our storm-affected areas. We’re constantly looking at that to see what we need to do now.

“As for the financial markets, we do have a large stock portfolio that was significantly impacted by the last year’s financial turmoil, and so was our bond portfolio. But last year was an extraordinary year, and we were able to get through it. And although our losses were large, they weren’t so large that they impaired the company.”

EMC’s investment portfolio, made up mostly of stocks, still achieved a return of 2.5 percent in the first quarter compared with double-digit losses in the equities markets. During Kelley’s tenure, the company’s capital surplus, a measure of its net worth, has grown from about $100 million to $850 million.

In the neighborhood

The self-effacing CEO deflects attention from himself whenever possible, whether it’s talking about his role in the company or the organizations he supports, among them Salisbury House and Drake University.

“Oftentimes you don’t know he’s personally involved, he’s so modest and low-key,” said Charlie Edwards, dean of Drake’s College of Business and Public Administration, which a year ago honored Kelley with its Community Leadership Award. “He doesn’t have a big ego; he’s just quietly effective and I think he’s been a terrific personal friend as well as a supporter of this college.”

Under Kelley’s leadership, EMC continues to provide support for the Kelley Insurance Center at Drake, which is named in honor of his parents, Robb and Winifred Kelley. EMC also supports several professorships and scholarship programs at the college. “A lot of our employees have come through Drake,” Kelley said, “so we want to support and have good insurance education at Drake so we can attract good employees from there.”

Kelley also helped to establish the Salisbury House Foundation, which has played an instrumental role in securing funding to preserve the historic Salisbury House mansion.

“It’s in the neighborhood,” said Kelley, whose South of Grand home is located about two blocks from the museum, “so I’m helping the organization to preserve it.”

Through each of its branches, EMC strives to support organizations that are unique to that city. Its Chicago branch, for instance, supports an orphanage in the Windy City. And because the company insures a large number of school districts, it sponsors the Read with Me! program in Iowa, Kansas and Nebraska.

Solid business plans

Much of EMC’s success has come from making incremental changes based on solid business plans, Kelley said.

“We’ve been in about 41 states since the early ’90s and we’ve had some small changes in our underwriting footprint,” he said. “We’ve attempted to avoid writing too much (business) on the coasts. We’ve attempted to spread our risk in the interior (of the country) for property risks. As far as casualty risks go – workers’ comp and general liability – we’ve dealt with agents that are professionals, so we have good books of business. We don’t write certain lines of business in certain states where we don’t believe that we have the ability to make a profit. So we write selectively; we don’t write in every state, every coverage.”

With the emergence of the Internet in the mid-1990s, independent agents have found it easier to increase their market share, Kelley noted.

“So what we do is make it easy for our agents to access our coverages through Real Time (an instantaneous quote system for agents),” he said, “and we also make it easy for our policyholders to access information concerning our policies in our system. A third aspect is claims reporting; we make it easy for agents and policyholders to report claims and to start the claims process.”

EMC also has strong corporate governance structure within its boards, Kelley said.

“We have a very robust committee system in our several boards of directors, one for the policyholders and one for the stockholders,” he said. “Because of that, we have a lot of people involved in leading decisions for the company, whether it’s in the area of compensation, Sarbanes-Oxley or investments. … We’ve had a lot of good businessmen on our board of directors, and I was privileged to work with them and they gave me a lot of help over the years.”

In the future, Kelley said, EMC will continue to look for new opportunities in surety coverage, an area in which it has grown significantly over the years.

“But you have to do it very carefully, because if you get involved in a market that is not profitable, you could really hurt the company going forward,” he said. “So we try to avoid those markets where the liability culture is out of control, or where the weather patterns are such that you can’t make money there.”

Asked if there is any one piece of advice he carries with him, Kelley referred to his company’s brand, “Count on EMC,” and its motto: “Insurance is our business, and we intend to stay in it.”

“If we adhere to both of those phrases, I think we can continue to be a successful company,” he said.