Ed Fernandez talks about why taking a contrarian approach to a complex industry has been a smart move.

Palisades was founded as a startup company in 1992 during a difficult time in the New Jersey automobile insurance market, a time, in fact, when most companies did not want to write automobile insurance in New Jersey. The company developed a contrarian business strategy, going against the grain. “We became auto insurance specialists for New Jersey consumers by focusing on safety while providing exceptional service for the needs of our customer,” said Ed Fernandez, president and CEO of a little more than a year. “At Palisades, we strive to distinguish ourselves in a way that provides customer service excellence.”

Because Palisades is focused only on New Jersey, it delivers a depth of expertise that has been cultivated over the years. “Every state has a different regulatory system. Unlike our competitors, Palisades doesn’t have to pay attention to 50 different states,” Fernandez said. “It gives us a competitive advantage because it allows us to be nimble and provide competitive rates for safe drivers.”

Ed Fernandez

Unique experience
The company’s unique approach has enabled it to provide a superior customer service experience. The Department of Banking and Insurance keeps tallies of valid complaints in auto insurance. In the last three years (2004, 2005, and 2006), Palisades has had zero valid complaints, a rather uncommon feat in the industry, noted Fernandez.

“If you look at the published data over the last three years in New Jersey, you can see that it’s very uncommon for companies to have few valid complaints. In our case, it’s zero. We use it as a litmus test of the level of customer service we want to provide,” he said.

Palisades has employees on call 24 hours a day, seven days a week to respond to claims. Rather than keep employees in the office 24/7, the company uses mobile routing, which enables employees to remain on call after business hours. “We have a unique, almost maniacal mentality of focusing on the customer,” Fernandez said.

“If someone has an automobile accident at 2:00 in the morning, they’d expect to call in to their insurance company and reach either an answering machine or an outsourced call center. Our customers get to speak to a Palisades employee.”

To provide access to all customers, Fernandez gives them his personal e-mail address as well as his home phone number. And if by chance the company doesn’t meet a customer’s expectations, it will make a $25 donation to the customer’s choice of charity.

“We occasionally make mistakes,” Fernandez said. “More often than not, we call them on ourselves. If we have a situation where we drop the ball and don’t serve the customer the way we pledge to, we will voluntarily contact the customer to tell them we didn’t meet our standards and would like to make a donation on their behalf.”

Staying put
Palisades also promotes safe driving and is working to reward customers for their loyalty. Customers will soon be able to receive discounts or cash back on products that relate to safety, car care, and other everyday purchases. For example, if a customer wants to buy a safe infant car seat, the rewards program can provide the customer with various vendor options; the customer can then buy the item at a discounted rate or earn cash back. The cash-back option allows customers to receive a check or apply the cash to their Palisades automobile insurance premium. “These initiatives will work to strengthen the customer relationships we have,” said the CEO.

This rewards program is unique, explained Fernandez. “While we know of two other insurance companies in the entire country that have something similar to this, the cash-back component that customers can apply to their premium is something unique to Palisades.”

According to Fernandez, Palisades will maintain its strategy and has no plans to expand out of New Jersey. “Most companies who are successful in one state would typically say, ‘Let’s duplicate this in Pennsylvania and New York,’” he said. “We aren’t thinking that way at all.”

Focusing on New Jersey has enabled the company to become specialists in the industry and its marketplace. “We have no desire to alter that strategy because it gives us a competitive advantage and distinguishes us. There are many more customers we can insure before we run out. I don’t think that day will come any time soon,” Fernandez concluded.