05.04.09 SOUTH CENTRAL.qxd
4/30/09
50 REASONS Why Agents Choose MGAs
1:52 PM
Page 1
AN AWARD WINNING CSR Shares Success Secrets
FRAUD PREVENTION Agents Can Help
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:34 PM
Page 2
You take on the tough problems Let Rockwood manage your E&O
EjgX]Vh^c\ VYZfjViZ :ggdgh VcY Db^hh^dch : D XdkZgV\Z ^h V Xg^i^XVa XdbedcZci d[ Vcn ^chjgVcXZ egd[Zhh^dcVaŸh dkZgVaa Wjh^cZhh higViZ\n# 9dcŸi Wjn ndjg eda^Xn [gdb _jhi VcndcZ° XdbZ id i]Z ^cYjhign ZmeZgih GdX`lddY Egd\gVbh ]Vh WZZc hZgk^c\ i]Z egd[Zhh^dcVa a^VW^a^in ^chjgVcXZ cZZYh d[ i]Z E 8 6\Zci Xdbbjc^in [dg dkZg V YZXVYZ#
Interested in learning more? Visit our website at www.rockwoodinsurance.com. You can also call us toll-free at 877-242-2487.
s 0 # ,IFE !GENTS % / s .EWLY ,ICENSED 0 # ,IFE !GENTS s 0ROGRAM !DMINISTRATORS s 7HOLESALE )NSURANCE !GENCIES s ,IFE 'ENERAL !GENCIES s 2EGISTERED )NVESTMENT !DVISORS s 7ORKSITE -ARKETERS s #ARRIER 3PONSORED 0ROGRAMS
GdX`lddY Egd\gVbh! >cX# ™ )%%& B^aaZg GdVY! L^ab^c\idc! 9: &.-%'
E=C/ -,, ')'"')-, $ ;6M/ (%' ,+'")'%% sales@rockwoodinsurance.com ™ www.rockwoodinsurance.com
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:34 PM
Page 3
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:34 PM
Page 4
Inside This Issue
May 4, 2009 • Vol. 87, No. 9 • South Central Region
DEPARTMENTS
SOUTH CENTRAL
N12 SPECIAL REPORT: Salute to Super Regionals 2009 Super Regional P/C Insurers™ Leading Multi-State Carriers Revealed
NATIONAL COVERAGE N12 | SPECIAL REPORT: Salute to Super Regionals 2009 Super Regional P/C Insurers™ Leading Multi-State Carriers Revealed N18 | Risk Managers Report ‘Soft Landing’ for Market Pricing Survey Says Commercial Insurance Market Still Overcapitalized
8
| Katrina Flood Victims’ Civil Suit Against Corps Geologist Calls MRGO a ‘Catastrophe’
8
| Public Adjusters Not Permitted in Arkansas In Wake of Tornadoes, Commissioner Issues Reminder
8
| Oklahoma Workers’ Compensation Judges Despite Veto, Senate Continues Fight for Approval Rights
10 | Texas Senate Passes Insurance Department ‘Sunset’ Bill Measure Contains Regulatory Changes 10 | AIG Begins Transitioning P/C Unites to AIU Holdings Special Purpose Vehicle Set Up for the Spin Off
9 | 9 | 12 | 13 | N24 |
It Figures Declarations People Business Moves MyNewMarkets
15 Fighting Insurance Fraud How Agents Can Help
14 | Crime Warp: Vehicle Dumping Numbers Rise with Recession 15 | Fighting Insurance Fraud How Agents Can Help
IDEA EXCHANGE 16 | For Award Winning CSR Going ‘Above and Beyond’ is Part of the Job
N18 | Bad Economy Not Impacting Essential Insurance Coverages Industry Study Says Most Keep Auto, Homeowners Insurance
N1 | Don’t Expect Top Dollar if Your House Is in Chaos Keep Financials, Book of Business in Order
N22 | Closer Look: Agency Technology Social Networking, Web 2.0 Changing the Way the Industry Does Business
N6 | Minding Your Business How to Improve Productivity in a New Economy
N26 | Special Report: AAMGA Issue ‘Red Flags’ to Watch For When Choosing an MGA Partner
N10 | Survey: Regional Carriers Agents, Rate Your Regional Carriers in a New IJ Sponsored Survey
N27 | Special Report: AAMGA Issue 50 Reasons Why Retail Agents Choose MGAs
N36 | Closing Quote Being Prepared: Don’t Lose Sight of the Greater Risks We Face
N30 | Spotlight: 2009 Premium Finance Directory
4 | INSURANCE JOURNAL-SOUTH CENTRAL REGION May 4, 2009
16 Secrets of an Award Winning CSR ‘Above and Beyond’ Part of the Job
N22 Social Networking In an Insurance World
www.insurancejournal.com
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:34 PM
Page 5
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:34 PM
Page 6
Idea Exchange Opening Note
What Agents Want
M
oney is the lifeblood of any business. But when it comes to running insurance agencies, money isn’t the main thing that principals look for w hen they do business with a certain carrier. Claims handling, it turns out, is the truly coveted prize — at least that’s according to more than 450 agency owners and senior executives who were surveyed by a regional affiliate of the Professional Insurance Agents of America. Agents in New York, New Jersey, Connecticut and New Hampshire participated in the survey. Respondents consistently ranked “adjust claims fairly” and “pays claims promptly” as the top two factors they look at when evaluating an insurer. Rounding out the top 10, in decreasing order of importance w ere: Communicates clearly, honestly; resolves issues quickly; underwriter knowledge, experience; listens, responds to agents; easy, intuitive technology; stable markets; consistent underwriting; and competitive pricing. Anecdotally, the comments from agents bore out the results of the survey. Ellen Kiehl, a senior research analyst for PIA, shared some of those comments with Insurance Journal. Some of the more poignant ones: “When it is hard to work with a company, we don’t use them a lot.” “A company can have bad enough service that no compensation will offset it.” There’s “Perhaps insurance companies should concern themselves more with another reason customer service to their agencies. ... It is very frustrating to be unable to speak with a person and solve a problem in a timely manner.” the survey The agents’ answers very closely match a survey conducted by Insurance Journal last September — “How Independent results are so Agents View Carriers” — that found that quality claims service interesting: is valued above all else. Given the ways the market has changed The absence of in the ensuing period of time — an extended economic crash, collapse of AIG, the persistent soft market, to name a few ‘compensation’ the — one can infer that agents still place the highest premium on how their carriers will treat their customers. as a top-10 Although hinted at in some of the comments, there’ s item. another reason the survey results are so interesting: The absence of “compensation” as a top-10 item. Its conspicuous absence did not go unnoticed by the PIA, whose members — particularly in New York where agents’ pay is a heated issue — rightly or wrongly feel there is a perception in some parts of the co untry that agents’ sole area of concern is their paychecks. Or as Jim Pittz, business issues director for the four state associations, put it: “Quality of service clearly overrides the ‘profit-only’ motive that agents are falsely accused of being driven by.” If nothing else, the survey lends some scientific weight to the knowledge that anyone who has worked in this business has known for years: When it comes to dedication, independent agents’ biggest concern is that their clients are happy and well taken care of when they have a loss. Stephanie K. Jones Then again, the agents out there didn’t South Central Editor sjones@insurancejournal.com need a survey to tell them that. 6 | INSURANCE JOURNAL-SOUTH CENTRAL REGION May 4, 2009
Publisher Mark Wells Chief Executive Officer Mitch Dunford
EDITORIAL Editor-in-Chief Andrea Ortega-Wells | awells@insurancejournal V.P. Content/ and Interim Midwest/Southeast Editor Andrew Simpson | asimpson@insurancejournal.com East Editor Kenneth J. St. Onge | kstonge@insurancejournal.com South Central Editor Stephanie K. Jones | sjones@insurancejournal.com West Editor Patricia-Anne Tom | ptom@insurancejournal.com MyNewMarkets Associate Editor Chris Boggs | cboggs@insurancejournal.com International Editor Charles E. Boyle | cboyle@insurancejournal.com Columnists Catherine Oak, Bill Schoeffler Contributing Writers Cain Burdeau, Daniel Price, James Quiggle, Richard Ward, Nicole Bissett
SALES V.P., Sales & Marketing Julie Tinney (800) 897-9965 x148 jtinney@insurancejournal.com West Dena Kaplan (800) 897-9965 x115 dkaplan@insurancejournal.com South Central Eric Jeter (281) 655-0234 ejeter@insurancejournal.com
Midwest Lauren Knapp (800) 897-9965 x161 lknapp@insurancejournal.com Southeast Howard Simkin (800) 897-9965 x162 hsimkin@insurancejournal.com East Dave Molchan (800) 897-9965 x145 dmolchan@insurancejournal.com
MARKETING Marketing Administrator Gayle Wells | gwells@insurancejournal.com Advertising Coordinator Erin Burns | eburns@insurancejournal.com (619) 584-1100 x120 New Markets Sales Manager Kristine Honey | khoney@insurancejournal.com Classified and Ancillary Sales Manager Nicola Coghill | ncoghill@insurancejournal.com (619) 584-1100 x125 New Media Producer Chad Reese | creese@insurancejournal.com
DESIGN/WEB Vice President/Design Guy Boccia | gboccia@insurancejournal.com Vice President/Technology Joshua Carlson | jcarlson@insurancejournal.com Graphic Designer Jamie Bethell | jbethell@insurancejournal.com Web Developer Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Chris Thompson | cthompson@insurancejournal.com
A D M I N I ST R AT I O N Accounting Manager Megan Sinclair | msinclair@insurancejournal.com Admin./ Marketing Asst. Kristina Delavega | kdelavega@insurancejournal.com Cover designed by: Guy Boccia
Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semi-monthly by Wells Publishing, Inc., 3570 Camino del Rio N orth, Suite 200, San Diego, CA 92108-1747. Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $7.95 per copy, $12.95 per special issue cop y, $195 per y ear in the U .S., $295 per year all other co untries. DISCLAIMER: While the information in this p ublication is deriv ed from so urces believed reliable and is subject to reasonable care in preparation and editing, it is not intended to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Cop yright 2009 W ells Publishing, Inc. All Rights R eserved. Content ma y not be photocopied, reproduced or redistrib uted without written permission. Insurance J ournal is a p ublication of Wells Publishing, Inc. POSTMASTER: Send change of address form to Insurance Journal, Circulation Department, PO Box 9049, Maple Shade, NJ 08052 FOR QUESTIONS REGARDING SUBSCRIPTIONS: please call 856-380-417 6 or email subscribe@insurancejournal.com. You may subscribe or change your address online at insurancejournal.com/subscribe. ARTICLE REPRINTS: For reprints of articles in this issue, contact Rhonda Brown at 1-866-879-9144 ext. 194 or rbrown@fostereprints.com. Visit insurancejournal.com/reprints for more information.
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:35 PM
This is my
customer.
Page 7
This is my
lunch hour.
tt
m m
This is my
motivation.
This is my
insurance company.
Agents are like everyone else – we just know more about insurance. Like how to get just the right coverage for our policyholders. With Universal North America® I give my customers one-stop shopping with Homeowners and Auto coverage together – and a 15% discount on both. Rock-solid thals py, R: to her ictoof
(866) 338-4262, ext. 6540 UniversalNorthAmerica.com
financial strength, diligent claim service and exceptional support for agents – now that’s my insurance company.
49, ur-
Universal North America Insurance Company is rated A - (Excellent) by A.M. Best & Company.
44 n.
Insurance products are issued and underwritten by one of Universal North America’s insurance companies: Universal North America Insurance Company or Universal Insurance Company of North America. Issuance of coverage is subject to underwriting review and approval. Products may not be available in all states.
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:35 PM
Page 8
South Central Coverage News & Markets
Katrina Flood Victims’ Civil Suit Against Corps Underway Mississippi River-Gulf Outlet (MRGO), dug in the 1960s, “one of ong awaited court proceedings the greatest catastrophes in the history of the pitting the United Army Corps of States.” Engineers against The nonvictims of flooding jury trial is in New Orleans as being heard a result of Hurriby U.S. Discane Katrina got trict Judge underway April 20 Stanwood with the testimoDuval Jr. If ny of a coastal the plaintiffs geologist who said are victorihe warned the ous, more Army Corps of than 120,000 Engineers decades other individuago about the danMississippi River-Gulf Outlet. Photo: als, businesses gers of the shipping Michael Maples/U.S. Army Corps of and governchannel that funEngineers ment entities neled Katrina’s could have a shot at claiming bilstorm surge into New Orleans. Testifying for plaintiffs in a civil lions of dollars in damages. “It will be used as a guide,” said lawsuit that charges the Corps Duval, who noted the case was with responsibility for flooding the first major trial against the during Katrina, Sherwood Gagligovernment since Katrina. ano called construction of the
By Cain Burdeau
L
Fight to Approve Workers’ Comp Judges in Oklahoma Goes On
U
ndeterred by the governor’s veto, the Oklahoma Senate is forging ahead with the push to gain authority to approve judicial appointments in the state. The Senate has passed a referendum HJR 1041, which would allow voters to decide the issue. The Senate took the action after Gov. Brad Henry vetoed Senate Bill 609, which he said “would have modeled Oklahoma’s judicial selection process after the highly partisan system in Washington, D.C., and reduced the number of judges on the workers compensation court from 10 to eight.” The governor also said SB 609
was unconstitutional because it impermissibly eliminated two judges from the court in the middle of their terms. In an announcement released by Senate President Pro Tempore Glenn Coffee, the Senate leader said legislators “are disappointed in the governor’s veto, because we’ve worked very hard to bring responsible reform and increased accountability to the Oklahoma’s workers’ compensation system. Contrary to what the governor said, this legislation removes the politics from the process, and we look forward to sending this to the people for them to have the final say.” IJ
8 | INSURANCE JOURNAL-SOUTH CENTRAL REGION May 4, 2009
Gagliano, considered a father of coastal science in Louisiana, said he studied initial proposals for the channel, which links the Gulf of Mexico with the port of New Orleans, in the 1950s and prepared reports for the Corps on environmental and flood risks. In the ’70s, Gagliano warned that the MRGO could cause catastrophic flooding and destroy protective wetlands. Plaintiffs say more than 140 square miles of wetlands were destroyed by the MRGO. The government said that the Corps took steps to make the shipping channel less dangerous, such as planting grass on the channel’s banks
and stabilizing them with rocks. Residents say poor maintenance of the MRGO led to the wipeout of St. Bernard Parish and the city’s Lower Ninth Ward. They are asking for damages of $300,000 to $400,000 for each individual. The Corps said it is immune from liability because the channel is part of New Orleans’ flood control system; The judge is allowing the case because of claims the channel was a navigation project. IJ Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Commissioner: Public Adjusters Not Permitted in Arkansas
A
rkansas Insurance Commissioner Jay Bradford said in the wake of violent storms that swept through the state on April 9, public adjusters are not permitted in Arkansas. Only adjusters whose salaries are paid by the insurance company he or she represents are allowed. The insurance department has received reports that public adjusters have approached citizens in Mena, which suffered extensive tornado damage. In a departmental announcement, Bradford advised consumers to call their insurance agent with questions “as he or she is the first link between you and your insurance company.” The April 9 storm system racked up nearly $12 million in damages in five counties: Ashley, Howard, Miller, Polk and Sevier, according to figures on the insurance
department Web site as of April 23. Polk was the hardest hit. The governor’s office said April 14 that assessment teams had tallied 659 damaged homes in Miller, Polk and Sevier Counties, 157 of which were destroyed. Another 140 homes suffered major damage. Damage assessments were continuing. IJ
Mena, Ark., April 15, 2009. Little remains of a commercial building destroyed by an F3 tornado that struck the city on April 9. Win Henderson/FEMA
www.insurancejournal.com
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:35 PM
Page 9
South Central Coverage Snapshot
It Figures
Declarations 5,500
The Oklahoma Employment Security Commission reported that the Social Security numbers of more than 5,500 people are on a flash memory drive that was lost by an employee who put the information on it after his laptop was infected with a virus. The employee then accidentally took the flashdrive to a conference in Dallas where he lost it. A commission spokesman said there have been no reports of identity theft because of the lost information. A letter from the OESC informed all the workers to contact the Federal Trade Commission to report the incident, and state A ttorney General Drew Edmondson said those whose Social Security numbers were compromised by the data breach should take immediate steps to protect their credit.
$1 Million If Texas State Representative Brandon Creighton has his way, all businesses in the state that have a gross revenue of $1 million or less would be provided tax relief through exemptions from the state franchise tax. Currently, any business with total revenue of $300,000 or less does not pay any tax. Last session, Rep. Creighton spearheaded an effort that led to a sliding scale of discounts for businesses with revenue between $300,000 and $900,000. The comptroller has estimated that the ne w measure raising the limit to $1 million w ould protect an additional 130,000 businesses from the franchise tax. HB 720 has the support of more than 35 co-authors.
1,700 The number of tornadoes that occurred in the United States in 2008, the second most active year for tornadoes on record. They accounted for 25 percent of about $10.5 billion in insured losses, according to Risk Management Solutions.
60% The percentage of average annual property loss in the U nited States attributable to hail storms. Why so high? Primarily because hail storms cover a large area plus they occur more frequently and in coordination with tornadoes rather than straight wind storms, according to Risk Management Solutions. www.insurancejournal.com
Nothing Doing “Doing nothing is not an option.” — Texas Sen. Troy Fraser, R-Horseshoe Bay, said efforts to improve the state’s troubled windstorm insurance system are “way off track” in the Texas Senate. Fraser, author of Senate legislation intended to address the issue, said a compromise remains elusive and warned the state could be on the hook for $68 billion if legislation does not pass. The Texas Windstorm Insurance Association serves as a last resort for wind insurance along much of the Gulf Coast. It took a hug e financial hit with last year’s Hurricanes Ike and Dolly.
Coverage or No Coverage? “Texas mandates liability insurance for drivers but if ordinary Texans are unprotected from those who speed or run red lights, but intend no harm to others b y doing so, then Texas is replete with non-coverage notwithstanding its mandatory-coverage requirement.” — Justice Don R. Willett in a written opinion of the Texas Supreme Court, which ruled in Greg Tanner and Maribel Tanner, et al v. Nationwide Mutual Fire Insurance Co. that the insurance company must pay a family’s claim for their child who was critically injured by a truck that was fleeing fr om police. The child’s parents, Greg and Maribel Tanner, sued the speeder, who was insured by Nationwide Mutual. The company claimed motorist R ichard Gibbons violated his policy by being involved in a hig h-speed police chase that was certain to end in a wreck. The Supreme Court denied Nationwide’s reliance on the “intentional act” exclusion in its policy , stating that the company didn’t prove “as a matter of law that Gibbons believed his conduct was substantially certain to injur e the Tanners.”
Near Bottom “Over the next quarter, our view points toward a continuing favorable market with the realization that we are at — or very near — the bottom of the pricing cy cle.”. — Mark Moreland of Lockton’s Risk Management team on the casualty insurance market, noting that most casualty buyers have still seen favorable renewals, but that may soon change.
Threatened Coasts “Our coasts are threatened, there are reasonable steps to counter those threats, and we as a nation are not y et taking them. … Evidence shows we can reduce our risks and our costs by 50 percent or more.” — Statement from the Resilient Coasts Blueprint, which outlines policy changes and common sense actions that could r educe economic losses from future storms and rising sea levels by as much as half along U.S. coastlines. The initiative is endor sed by a coalition of insurers, public officials, risk experts, builders and conservation groups. May 4, 2009 INSURANCE JOURNAL-SOUTH CENTRAL REGION | 9
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:35 PM
Page 10
South Central Coverage News & Markets
Texas Senate Passes Insurance Department ‘Sunset’ Bill
A
fter a temporary block by Democrats in the Texas Senate, a bill allowing continuation of the Texas Department of Insurance passed the Senate and headed to the House of Representatives for deliberation. Sen. Glenn Hegar of Katy, the author of SB 1007, said the legislation “better defines” the file-anduse system of setting insurance rates “with stronger prior approval protections as a back drop, to bring greater stability and consistent regulation in Texas.” Currently, insurance companies file rate changes with TDI and implement the changes while the agency reviews them. Hegar said the current system is confusing, causing nearly all insurers to operate under a quasi-prior approval system, where insurers negotiate with TDI to determine whether or not a rate would be approved.
SB 1007 clarifies under what cir- prime rate are levied on the disapcumstances the commissioner proved rate. If the insurer still could place an insurer under a refuses to roll back its rates, the prior approval system and would interest on the rates increases to 18 require him or her to approve or percent, payable to consumers if disapprove rate changes within 30 the hearing and appeals process days, according to information confirms the state’s decision. released by the Some Senate. The bill also Democrats in was amended to the Senate had The legislation shorten the agency’s more ‘better defines’ sought sunset period, from extensive the usual 12 years to the file-and-use modifications six. Another amendto the insursystem ment creates penalance regulatoties for insurers who of setting ry system, drag out the approinsurance rates. including val process with rolling back lengthy appeals. some of the If an insurer’s rate change is changes advocated by the insurrejected for being excessive or dis- ance industry in 2003 when the criminatory, the company has 60 legislature passed SB 14, signifito 90 days to refile a new rate. cantly revamping the way Texas During that time, interest penalregulates insurance. ties equal to 6 percent plus the The Texas Coalition for
Senator Glenn Hegar of Katy said his bill would clarify the insurance regulatory system in Texas. Photo: Texas Senate
Affordable Insurance Solutions (TCAIS), an insurer-backed organization, expressed concerns about portions of the bill. TCAIS Executive Director Beaman Floyd asserted that “some amendments to SB 1007 signal a giant step ba ckward toward prior approval, a regulatory system that will hurt — not help — both consumers and the insurance marketplace.” IJ
AIG Transitioning Insurance Units to AIU Holdings
A
merican International Group Inc. (AIG) has begun the process of rebranding of its insurance units as an independent entity , AIU Holdings, by transferring the company to a special purpose vehicle (SPV) in preparation for the potential sale of a minority stake in the business, which ultimately may include a pubAIU Holdings will lic offering of shares, dependserve as the holding on market conditions. AIG announced March 2 that ing company for AIU Holdings will have a AIG’s Commercial board of directors, manageInsurance, Foreign ment team and brand distinct from AIG. Under the plan, AIU General Insurance, Holdings will serve as the holding company for AIG’s and Private Client Commercial Insurance, Foreign Group units. General Insurance, and Private Client Group units. “Placing AIU Holdings into an SPV marks the latest significant step to position o ur strong insurance companies as independent businesses, which will benefit all stakeholders, including policyholders, employees and distribu10 | INSURANCE JOURNAL-SOUTH CENTRAL REGION May 4, 2009
tion partners,” said Edward Liddy, AIG chairman and CEO. Under the SPV arrangement, AIG intends to contribute the equity of AIU Holdings into an SPV in exchang e for preferred and common interests in the SPV. AIG also intends to purchase from AIU Holdings its equity interests in International Lease Finance Corp., U nited Guaranty Corp. and Transatlantic Holdings Inc. The sale of these interests to AIG further separates the property/casualty operations from AIG and its other affiliates. “Taken together, these actions accelerate the move of AIU Holdings toward greater independence,” said Kristian P. Moor, president, AIU Holdings. “Securing the value of these well capitalized insurance companies, which had net written premiums of about $36 billion in 2008 serving millions of clients aro und the world, is in the best interests of policyholders and the American taxpayer.” The Federal Reserve Bank of New York called the move “an important next step in the company’s efforts to place key business units in the best position to optimize their operations and maximize their value.” Ratings analysts at A.M. Best and Standard & P oor’s said the move would have no immediate effect on ratings of an y AIG companies but both saw the move as a positive step. IJ www.insurancejournal.com
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:35 PM
Page 11
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:35 PM
Page 12
South Central Coverage People
Joseph Tracy
William Krivoshik
Gregory V. Grosfield
Joseph Tracy has been named president of Travelers Inland Marine business unit. Tracy, who joined Travelers in 2006, most recently served as chief underwriting officer for the Inland Marine business unit. Prior to joining Travelers, Tracy was the head of OneBeacon Insurance’s Inland Marine operations. He also has held positions with the Chubb Group of Insurance Cos. and Kemper Insurance Cos. Tracy succeeds Richard Rowley, who founded Travelers Inland Marine in 1982. Rowley will continue as a senior adviser with the organization. New York-based brokerage Marsh & McLennan Cos. named William Krivoshik chief information officer and senior vice president for the firm. In the ne wly created position, Krivoshik will oversee MMC’s technology strategy and architecture. Krivoshik most recently served as the chief technology officer at Thomson Financial, where he oversaw the company’s technology and information operations globally. He has also held senior technology positions with Citigro up, Travelers and American International Group, where he was chief information officer. Engle Martin & Associates Inc., a national insurance adjusting and claims administration firm, appointed Jay T. Campbell to serve in the newly created role of executive vice president of operations. Since 1993, Campbell has served in a variety of senior level positions with Crawford & Co., a global provider of claims management services. Most recently he was vice president and director of operations overseeing the Field Operations and Catastrophe Services divisions. Campbell is the fifth member of Engle Martin’s executive management team, which includes Kevin L. Engle, CEO; John J. Quinn, president and chief operating officer; W. Todd Evans, executive vice president for Business Development; and Bob Gambell, executive vice president for Claims and Administration Services and Casualty Operations. Houston-based HCC Insurance Holdings Inc. named Susan L. Howie to head its corporate Human Resources Department as vice president of Human Resources. Howie previously worked for HCC from 1997-2005, serving as head of the company’s Human Resources Department. Before joining HCC, she was a senior vice president at BetaWest Properties Inc. in Denver, Colo. HCC Insurance Holdings Inc. is an international specialty insurance gro up with offices across the United States and in Bermuda, Ireland, Spain and the United Kingdom. The Insurance Council of Texas (ICT) awarded academic scholarships to 12 students of insurance at the University of Texas at San Antonio, Huston-Tillotson
12 | INSURANCE JOURNAL-SOUTH CENTRAL REGION May 4, 2009
University and the University of Texas Pan American in Edinburg. The University of Texas at San Antonio scholarship recipients were Calley Brahm, Safoora Sohaib, Gregory English, Kimberly Cox and Selvin Guevara. Huston-Tillotson University students were Lorianna Archer and Gabriel Gibbons. The University of Texas at Pan American scholarship recipients were Juan Chavez, Jon Obie Valdivia, Juan Perales, Annisa Olivia Chavez and Marcos Cantu. ICT’s Education Foundation was created to administer both academic and achievement awards that are now provided to seven Texas universities. The universities include Baylor, University of North Texas, UT Austin, UT San Antonio, UT Pan American, Huston-Tillotson and Texas Southern. Since the scholarship program began in 2002, ICT has awarded $162,500 in scholarships to 136 students stud ying insurance and risk management. Bermuda-based specialty insurer Ironshore Inc. appointed Anthony Mammolite executive vice president of its U.S. Property unit. Mammolite will oversee strategy for the unit, which focuses on broker-sourced specialty commercial business. He has more than 35 years of experience in underwriting and field marketing, including more than 20 years in property lines. Mammolite most recently served as senior vice president of Property for Lexington Insurance Co. Prior to that, he held various senior level management positions for AIG in the greater New York region. Eqecat Inc., a subsidiary of ABSG Consulting Inc. announced William M. Keogh was appointed senior vice president, strategic initiatives. Keogh, who was previously group executive of global client development at Risk Management Solutions, will be responsible for setting and implementing corporate strategy. Keogh began his career in 1982 as an underwriter . His underwriting experience includes property and casualty insurance and reinsurance and spans the U nited States, the United Kingdom, Europe, Asia, and Latin America and the Caribbean. Michael J. Morrissey was appointed president and chief executive officer of the International Insurance Society Inc. (IIS). Morrissey previously served as chairman and chief executive officer of Firemark Investments. He has advised insurance company management and served on several insurance company boards, as well as chairing the firm’s fund boards. Morrissey succeeds Patrick W. Kenny, who will retire in June. Kenny has served as IIS president and CEO since 2001. IJ www.insurancejournal.com
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:35 PM
Page 13
South Central Coverage Business Moves Key & Piskuran, Higginbotham Key & Piskuran Insurance Agency LLC, a commercial P/C insurance broker in Arlington, Texas, joined forces with Higginbotham & Associates, a Ft. Worth-based insurance and financial services broker with statewide operations. Key & Piskuran Partner Carrol Key founded a property/casualty insurance agency in 1983, and Bill Piskuran joined him shortly thereafter to form Key & Piskuran. Larry Gallemore was made a partner in 2004. The firm employs a staff of six and specializes in risk management services to commercial entities. Its practice is grounded in the public sector, serving Texas municipalities and school districts. Higginbotham is aggressively expanding its operations in Texas by aligning with insurance firms that have strong footholds in their local markets or niche practices. In addition to Key & Piskuran, Higginbotham has expanded into Houston, Wichita Falls, Henrietta, Granbury and Waco via partner firms within the past 15 months. Higginbotham has provided broad commercial and personal insurance and financial services since 1948. Gibraltar Group, Sitkins The Gibraltar Group, headquartered in Lubbock, Texas, announced it was selected to become a part of Sitkins International, an organization whose membership includes independent insurance agencies and brokerages in the United States, Canada and Latin America. Through membership in the organization, The Gibraltar Group executives, as well as its sales, service and active risk management teams, gain access to a range of intellectual capital and resources provided by Sitkins Group Inc., a consulting company that delivers solutions and support for the 132 insurance firms that make up Sitkins International. A highlighted benefit offered to members is The Vertical Growth Experience, a series of training, coaching and networking services and programs that positions agencies and brokerages to increase top-line revenues and bottom-line profits by 15 percent to 25 percent or more per year. Sitkins International membership status is awarded to a limited number of firms a cross www.insurancejournal.com
the Western Hemisphere, maintaining territorial exclusivity with a limit of one agency or brokerage per marketing area. Farmers, AIG, 21st Century Los Angeles-based Farmers Insurance Group of Companies is acquiring American International Group’s (AIG’s) Personal Auto Group, which includes 21st Century Insurance Co. The transaction excludes AIG’s Private Client Group, which provides P/C insurance to high net worth individuals. Under the agreement, 21st Century Insurance Group, the wholly owned subsidiaries comprising AIG’s U.S. personal auto insurance business, will be sold to Farmers Group Inc., a subsidiary of Zurich Financial Services Group. Farmers Group Inc. will sell the underlying insurance entities to the Farmers Exchanges, which Farmers Group Inc. manages, but does not own. FGI will pay AIG $1.9 billion, consisting of $1.5 billion in cash and $400 million in fa ce amount of subordinated, euro-denominated capital notes backed by Zurich Insurance Co., Zurich’s principal operating unit. FGI also assumes 21st Century’s outstanding debt of $100 million. The acquisition is expected to close no later than by the third quarter of 2009. This acquisition by the Farmers Exchanges will position Farmers as the third-largest overall, personal lines insurer in the United States, according to the company’s most current insurance industry data. 21st Century, which includes the former AIG Direct business and Agency Auto business, operates in 49 states and Washington, D.C. 21st Century has more than 2.4 million customers and insures more than 4 million vehicles across the country. 21st Century is the third largest traditional direct writer of insurance in the United States. Farmers CEO Robert Woudstra described the acquisition as a “win, win, win, win” for Farmers, 21st Century, Farmers agents, and most importantly, insurance consumers across the United States. Woudstra said Farmers’ national network of insurance agents will benefit from the proposed acquisition by gaining additional multiline product sales opportunities from 21st Century customers. IJ May 4, 2009 INSURANCE JOURNAL-SOUTH CENTRAL REGION | 13
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:35 PM
Page 14
South Central Coverage News & Markets
Crime Warp: Recession Driving a Rise in Vehicle Give-Ups By James Quiggle
A
s America’s economy slogs through this once-in-a-generation recession, stressed-out consumers are literally being driven to desperation.
Growing numbers of drivers are illegally dumping their vehicles for insurance money. Blackened hulks are turning up in remote deserts outside of Las Vegas, for instance.
People’s motives for so-called vehicle giveups are diverse. Greed often plays a leading role. Many drivers who bought pricey vehicles on easy credit, beyond their financial means also can’t afford their vehicles. Other consumers are grasping for insurance cash as their overall financial misery increases, the Coalition Against Insurance Fraud said. Most of these drivers aren’t hardened criminals. They’re average, normally honest people pushed off a financial and moral cliff. The y’re looking for any lifeline they can find. As the vehicle-fraud trend gains steam, it reveals much about people’s desperation to escape their economic troubles. This crime trend also shows how easily many people will bilk their insurers whenever financial pressure reaches critical mass. The trend appears to be surging around the United States, often in locales where layoffs, foreclosures and other metrics of misery have invaded. The Coalition investigated locations around the United States early last fall. Warning signs were spreading. Investigators are clamping down on cons, often with aggressive auto fraud task forces that were in place well before the recession increased their caseload. Some fraud indicators: No damage to the ignition or steering lock; leased vehicle has exceeded its allotted mileage; vehicle was recovered before the time the insured reported it stolen; the vehicle is too expensive for the suspect’s income; and the suspect is behind on lease or loan payments. With America’s moral compass wobbling, fraud fighters must change the lenient consumer attitudes that make insurance schemes so widespread. It’s impossible to simply arrest this crime out of existence. In fact, sentences for vehicle give-ups often are light, CAIF said. A spike in public-outreach efforts thus must accompany this spike in auto insurance crimes. Get-tough deterrent messages make people think twice about committing what many consumers think is a harmless prank against insureds. IJ Quiggle is director of communications for the Coalition Against Insurance Fraud. Quiggle’s Crime Warp column is featured on ClaimsJournal.com. www.InsuranceFraud.org.
14 | INSURANCE JOURNAL-SOUTH CENTRAL REGION May 4, 2009
www.insurancejournal.com
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:35 PM
Page 15
South Central Coverage News & Markets
Agents Can Help Fight Insurance Fraud Employee Background Checks Essential By Patricia-Anne Tom
I
nsurance agents can play a big role in helping states to fight insurance fraud. In fact, because they are on the front lines of insurance transactions, agents might see and hear things before the insurance company, claims department or insurance investigator even hears about a problem, according to Howard Goldblatt, director of government affairs for the Coalition Against Insurance Fraud. “They are the grassroots. They are in the streets, in the neighborhoods,” Goldblatt said. As a result, an agent may see things in a neighborhood that would raise questions with an anti-fraud department. “They may know of someone that they’ve insured who is having economic problems, and all of a sudden there’s a claim filed by that person,” Goldblatt said. When that happens, there are steps an agent can take to help with an insurance department investigation, said Fraud Bureau Chief Cindy Schmell of the Iowa Division of Insurance and Anti-Fraud Division Director Ted Clark of the Kansas Department of Insurance. “Insurance agents can help us immensely with our insurance fraud investigations if they document information,” Schmell said. “For instance, if someone comes to an agent wanting to purchase insurance, they can verify the identity of that person. If they uncover something that indicates the person maybe isn’t who he says he is, [the agent] can document that and provide that to [the insurance department] when we come interview them in our investigation.” Clark agreed, noting that agents should obtain positive identification from the person proposing to be insured. He also recommended agents actually inspect vehicles prior to insuring them, to determine whether there is pre-existing damage or problems with a car. “Agents can certainly assist us in fraud investigations,” Clark said “In many fashions they are the gatekeepers of information of the insured. Second, there are things [insurance agents] acquire as far as identification, preexisting condition of vehicles and such, before www.insurancejournal.com
Oftentimes, companies will do background checks on senior management, but not examine other personnel such as janitors or office assistants, Schmell said. She noted it is important to evaluate all employees, looking at such areas as their criminal history, civil litigation history, collections/credit history, employment history, address history, claims history, mental illness or addition, education and professional licensure. Outside vendors can assist with researching Analyzing Employees a person’s background, Clark Beyond scrutinizing cusand Schmell said. Checking tomers, Clark and Schmell the person out on cybersaid insurance agencies should space, such as on Google, scrutinize their own employYouTube, and social netees when hiring, as well. working sites like Facebook Based on a survey of 2.6 miland MySpace also can prolion job applicants, 44 percent vide insight on a person’s lied about their work experibackground. Nevertheless, ence, 23 percent fabricated they noted “there is no suitcredentials or licenses and 41 able substitute” for an inpercent lied about their educaperson interview. tion. And “past behavior is the “You’d be surbest predictor of future behavprised what potential ior,” Schmell said. job applicants tell you,” Considering that occupa‘[Agents] may Schmell said. tional fraud and abuse costs While researching a potenorganizations about $600 bilknow of sometial employee’s background lion annually, or roughly 6 perone that they’ve might seem like an invasion cent of gross revenues, accordof privacy, remember that ing to the Austin, Texas-based insured who is insurance agencies are Association of Certified Fraud having economic entrusted with a lot of perExaminers, and the fact that sonal information, both for insurance agents have access problems, and the insureds and insurance to a wealth of customers’ perall of a sudden companies they represent, sonal information, it’s imporSchmell said. The law also tant to examine a potential there’s a claim is on the agency-employer’s employee’s track record, Clark filed by that side. and Schmell said. “There is a federal law “Agencies should screen person.’ that says someone who’s their employees prior to been convicted of a felony employment because there are for a breach of trust crime cannot participate many issues that can be addressed by prein the business of insurance — unless they are screening employees,” Clark said. “One would provided a waiver by that state’s insurance be to make certain that the information that commissioner,” Schmell concluded. IJ the agency has is not subject to identity theft. Other things would be [to make certain] that Clark, Goldblatt and Schmell were speakers at the the agency is less likely to have an employee National Association of Insurance Commissioners that might themselves perpetuate some sort of Insurance Fraud Seminar held in March 2009 in internal theft or participate in some sort of San Diego. insurance fraud scheme.” they are insured.” It’s important for agents also to report any kind of false information they receive from someone trying to purchase insurance to their state insurance fraud bureaus, Schmell recommended. “And then, of course, agents can cooperate with the authorities when we proceed with our investigations.”
May 4, 2009 INSURANCE JOURNAL-SOUTH CENTRAL REGION | 15
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:35 PM
Page 16
Idea Exchange Great Customer Service
For Award Winning CSR, Going ‘Above and Beyond’ is Part of the Job
W
hat does it take to deliver outstanding customer service? Kimberly J. Muesse, a senior account manager with the Lockton Companies in Houston, should know. She’s won a string of awards during
her 25-plus years in the insurance industry, the most recent being named the Accredited Customer Service Representative (ACSR) of the Year by the Independent Insurance Agents & Brokers of America.
Muesse joined the Lockton team two years ago and works exclusively with commercial customers. She holds three ACSR designations, having earned the personal lines designation in 1991, the commercial line designation in 1994 and the life/health designation 2004. The Big “I” said Muesse stood out among the candidates for the ACSR of the Year honor because she consistently goes beyond the call of duty. Her professionalism, time management skills, and exceptional work ethic were among her many attributes highlighted in letters recommending her for the prestigious award. Shortly before she took off on a cruise with her three teenage sons ‘My adage is to (paid for with her ACSR always deliver award money), what I promised, Muesse shared with Insurance when I promised, Journal some of but to excel at the secrets of her success.
that promise.’
Insurance Journal: What kinds of service do b usiness customers want in this economic environment? Kimberly Muesse: What do they expect today? … They expect precision customer service. What do I mean by precision customer service? They want what they want, when they want it and at a price these da ys that they are willing to pay. And as insurance professionals we’d better be able to deliver that or they will go look somewhere else. IJ: What are some of the pra ctices agencies should follow in order to assure that customers are getting what they need? KM: When you’re trying to place coverage you have to go to multiple markets. When you look at those markets you not only have to look at the price b ut you have to look at their products as well. For the 16 | INSURANCE JOURNAL-SOUTH CENTRAL REGION May 4, 2009
www.insurancejournal.com
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:35 PM
price that clients are paying these days they want everything possible that they can get. It’s up to us to be able to find it. IJ: How can insurance professionals enhance the quality of their customer service? KM: My adage is to always deliver what I promised, when I promised, but to excel at that promise. I always have to go beyond that and deliver better and more, ahead of the deadline I set. It’s the concept of going above and beyond. IJ: Do you try to assess things that clients maybe have not thought about? KM: Always. That’s part of the reason we are here, because they may be thinking only inside of the box. Part of the reason they have us working for them is for us to think o utside of the box. We think of the “what ifs.” What’s keeping them up at night? Or maybe it’s not keeping them up at night and it should be. That’s where we come in. When we do think of an item that they may need, not only do we suggest it, we need to have a solution in order to provide that coverage for them. IJ: How do you assure clients they are receiving value in their insurance decisions? KM: We make sure we bring them more than just products and price. Specifically at Lockton, not only do we bring that, but we bring our expertise and our knowledge and additional service to our clients. Because that’s what adds the value to them.
Page 17
limited to the roadblocks that he or she places in front of himself of herself. In any difficult situation, there is always a way around the roadblock; the key is not to rush into it head-on at 100 miles per hour. The key is to slow down, take a break or detour, get navigation assistance, and eventually a solution will present itself and that hurdle, that self-imposed roa dblock, can be jumped, so you can sprint to the finish line. IJ: Is constant staff retraining on technology necessary as it evolves? KM: I wouldn’t say retrain, I would say refresh. For example, when an agency migrates to a new version of Microsoft Office, there will always be new bells and whistles on the newer version. You’re not going to have to go back to the basic training; you’re going to be trained on the updates. And that’s always important. If you update the technology but don’t let people know what the new bells and whistles are, they’re not going to utilize it. IJ: Do you do that in house or go outside for help with training?
IJ: What do you see as the most significant hurdle to great customer service?
KM: At Lockton we are able to do it in house. That may not be true for smaller agencies. They would have to go to a local vendor to present onsite, or if you can’t pull your entire staff in at one time, send them o ut two or three at a time to get that training.
KM: The most significant hurdle is o ur own self-imposed roadblock. A CSR is only
IJ: How can agencies develop and retain great CSRs?
www.insurancejournal.com
KM: The real estate adage is location, location, location. My reply to that one is education, education, education. … I see education as a key. At Lockton Houston we are Musse very lucky in that we offer the ACSR program in-house. Our office is dedicated to that program. … W e have an associate staff development consultant here that takes care of that. But we do use other staff members to offer different types of classes. We have somebody here in the Houston office that has been doing a series of inhouse risk management classes. We also implemented an internal training program for individuals with no insurance experience at all. Several different employees at different levels, background and experience took different areas to specifically train the trainees in. So they got a broad background, broad spectrum training that they were immediately able to put to use. What they would do is attend the training session and they would immediately be able to go work on that item. I happened to do a two-day session with them on the basics of insurance. Someone else trained them on the technical system. Here’ s the training, let’s go back to your desk and do a practical application. IJ: How would you describe the quality control process you call “record and recite?” KM: In a nutshell, sometimes in communications, whether it’s written or verbal, what the speaker says and what the listener hears aren’t absolutely the same thing. With record and recite, I make sure that in a verbal conversation I’m recording and documenting that information. And before I take action on it, I recite it to mak e sure that my understanding is the same understanding as the person who was giving directions. IJ
May 4, 2009 INSURANCE JOURNAL-SOUTH CENTRAL REGION | 17
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:35 PM
Page 18
Classifieds
Ad Index
Insurance Journal Texas / South Central • 3570 Camino del Rio North, Ste. 200 • San Diego, CA 92108-1747 Fax: 619/584-1200 • Phone: 800/897-9965 x125 • classifieds@insurancejournal.com For Ad Rate and Information
National Agency Ideas www.agencyideas.com
N29
Agribusiness Conventions
N18
American Modern Insurance Group
N19
www.amig.com American Reliable
N9
www.americanreliable.com AMIS/Alliance Marketing & Insurance Srvcs.
N4
Applied Underwriters
56
www.applieduw.com Astonish Results Capitol Insurance Companies CDS Business Mapping
N11
SOFTWARE
FREE Web-based Insurance Management System Multi-user, management system for reciprocal medical liability insurance providers – www.insurancesoft.com Covering; Underwriting, Risk Management, Accounting and Claims . For more information visit www.smartstone.com or email info@smartstone.com
N3 N28
www.riskmeter.com Demotech
AGENCIES
N5
Great American- Specialty Human Services DivisionN29 www.hsd.gaic.com Insurbanc Iroquois Group Midlands Management Corporation
N26 13 N20
www.midlandsmgmt.com NAS Insurance Services, Inc.
N10
www.nasinsurance.com NBIS - NationsBuilders Insurance Services, Inc.
N7
I would like to purchase a Managing General Agency or Independent P&C Agency in Texas or New Mexico. I am an individual willing to pay cash and will come meet you in person. Completely Confidential, call me at 432-664-1205.
www.nbis.com PersonalUmbrella.com
5
www.personalumbrella.com Rockwood Programs
SERVICES
2
www.rockwoodinsurance.com Scottsdale Insurance Co.
55
www.scottsdaleins.com The Mechanic Group Western Heritage
N20 N8
Guards • Investigators • Alarms South Central M.J. Hall & Company, Inc. www.mjhallandcompany.com
16
RSI International, Inc.
14
GL/Professional Umbrella • WC • Crime 1-800-665-7304 www.brownyardprograms.com
www.rsimga.com Tejas American General Agency
11
www.taga1.com Texas Mutual Insurance Company
3
www.texasmutual.com Universal Insurance
7
Be Seen...
in the Yellow Pages Basic Listings are FREE!
The Insurance Journal’s Yellow Pages website is a national online directory of services, products and solutions for the insurance industry, powered by Insurance Journal. The site is searchable by anyone, without having to register or logon to use it. Choose from over 90 categories including Agents, Claims, Education, Finance, Legal Services, Marketing, Markets, Reinsurance, Technology and Underwriting Services.
www.insurancejournal.com/yellowpages 18 | INSURANCE JOURNAL-SOUTH CENTRAL REGION May 4, 2009
www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:19 AM
Page 1
Idea Exchange Agency Management
Don’t Expect Top Dollar if Your House is in Chaos Get the Highest Bid When Selling Your Agency by Keeping Financials, Books in Order Price
By Daniel B. Price agreements that serve to protect business assets.
W
hether one is looking to sell, buy or grow organically, the preparation and organization of an agency’s financial, book of business and corporate information as if a sale is imminent should start today. In reality, a sale may not be in the cards right now. However, running the agency today as if it were going on the sales block will inevitably improve management practices and overall efficiency and effectiveness; thus translating into higher earnings and undoubtedly increasing long-term shareholder value. In short, the one surefire way to increase shareholder value is to get your house in order. This is something that can be started today that does not require selling a thing. Get your books and records in order. In an actual transaction, the amount and detail of information a particular a cquirer will request varies. But one thing is for sure — the quality of information a seller is able to provide goes directly to the overall quality of the agency itself and its management team. When it comes to the sale of www.insurancejournal.com
Financial Statements Historical financial statements are often one of the best indicators of future performance of a business. To these ends, buyers will put your financial information under a microscope. Audited financial statements provide the highest level of assurance that the financial picture of an agency is in fact as it has been presented to be. The greater reliability a buyer can place on the financial statements, the more lik ely it is that a seller will receiv e additional purchase consideration either through a higher overall price and/or through a more favorable transaction structure (i.e., more upfront or an earn out with lower performance metric thresholds). This is simply the an insurance agency, all things being equal, old risk/reward trade off: By having quality the higher the perceived quality of inforfinancial statements, you are helping to mation the higher the ultimate p urchase reduce the buyer’s perceived level of risk price and/or greater likelihood of improved and thus he or she is more lik ely to provide transaction terms. Buyers want to see that you with more return. a business is being run like a business.This It is a fact that historical financial statemeans mimicking professional standards ments of closely held businesses rarely often found within publically traded organreflect the true profitability izations and best practices industry leaders. The one sure-fire of the business without certain adjustments. Whether Such beneficial stanway to increase the adjustments would be dards and practices to eliminate owner perks include: shareholder such as country club dues • The routine developvalue is to get or personal automobiles, or ment of accurate and to remove one-time expenstimely financial stateyour house in es related to moving or ments complete with all order. sponsorship of a local charisupporting schedules ty event, it is of no matter. and documentation; The key to getting a buyer to sign-off on • Full implementation of a first class any suggested financial statement adjustclient management system that includes ment is the amount of tangible support drill down and custom query capabilities; and justification a seller can provide. • Thoughtfully developed business and Simply saying that 25 percent of this strategic plans, complete with budgets and expense line item and 50 percent of that management projections; and • In force and updated requisite legal continued on page N2 May 4, 2009 INSURANCE JOURNAL-NATIONAL REGION | N1
05.04.09 NATIONAL.qxd
4/29/09
9:20 AM
Page 2
Idea Exchange Agency Management Chaos, continued from page N1
expense line item are “personal” and therefore these line items should be adjusted will not suffice. If a b uyer is expected to give “full credit” in the p urchase price for discretionary items, extensive and detailed records are required. Buyers will only recognize and pay for earnings that are easily discernable and clearly documented. On a related note, b uyers become more skeptical with each “normalizing” adjustment required to arrive at the true economic run rate of a b usiness. Bottom line: even if all of the supporting documentation is available, it does not always make sense to make adjustments for every little immaterial non-business item. Revenue adjustments are related but can also sometimes come under the guise of a slightly different animal. You may have the usual non-recurring agency and it is not req uired for ongoing revenue adjustments, such as a one-time operations, then mechanisms for removing gain from the sale of eq uipment, and these it from the balance sheet sho uld be considadjustments are understandable. However, what is clearly unacceptable to most buyers ered. An example of this type of a djustment is is revenue that has not been recorded on automobiles owned by the agency (includthe financial statements and tax returns. An unrecorded revenue adjustment is clear- ing the accompanying debt), that are in reality personal automobiles of the agency ly straddling the line between tax avoidowners. By cleaning up the balance sheet a ance, which is perfectly acceptable, and tax more accurate picture of the true financial evasion, which is obviously not acceptable. position of the agency is often revealed. This type of situation should be cleaned up Most likely a buyer is going long before contemplatto uncover the true finaning a sale, or do not Buyers will only cial picture of the agency expect a buyer to give recognize and pay at some point during his or you credit for this revher review, so you might as enue. for earnings that well approach it honestly Effectively, Uncle Sam are easily discern- right from the start. has already compensated you for this revenue able and clearly First Class Client through reduced taxes. If documented. Management System a buyer gets wind of this I cannot tell you the type of situation the deal number of times I have asked for something will likely be stopped in its tra cks as this as basic as a production report by line of type of a situation goes right to the integrity of management and the underlying quali- business and been looked at as if I w ere from another planet. If you cannot provide ty of the agency. reports that at least break do wn the book The removal of non-operating assets and of business by general and specific line of liabilities from the balance sheet is another business, producer and underwriting marimportant aspect of cleaning up financial ket, then you have substantial work to do. statements. Their presence will just comAt the same time, just because you can plicate and confuse matters if and w hen provide these basic reports does not mean you decide to sell. If an asset is not conthat they are accurate. Too often, records tributing to the earning power of the N2 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
in an agency’s client management system do not reconcile to what is presented by the financial statements or payroll reports. All accounting and agency management systems should be communicating and reflecting the same information. There is nothing more frustrating to perspective buyers than to be provided with numerous reports generated from varying systems and to have the reports not reconcile with each other. Business and Strategic Plans – Budgets and Projections You may have considered developing a business or strategic plan in the past b ut decided to hold off as it w as determined that such planning and strategizing w as unnecessary given the size of the agency and its relative level of complexity. To this I say no way — if for no other reason than the existence of a well-thought out business plan and a thorough strategic plan reflect well on an agency’s management. What are the short and long-term g oals for the agency? What are the tactics that are being employed to reach these goals? Acquirers want to know that there is a plan and that the agency is being proactively managed for future growth. Buyers almost always request budgets and management projections. Unfortunately, these continued on page N4 www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:20 AM
Page 3
FIFTY YEARS OF STRONG PROTECTION FOR UNIQUE MARKETS AND COMMITMENT TO COMMUNITY SUPPORT. Building strength, stability, and trust starts with our commitment to superior customer service along with contributing to the health and well being of our communities. We are proud to be celebrating 50 years, together!
1600 Aspen Commons, Middleton WI 53562
Call 800.475.4450 or visit us at www.capitol.net
Insurance coverage offered through Capitol Indemnity Corporation, Capitol Specialty Insurance Corporation and/or Platte River Insurance Company.
05.04.09 NATIONAL.qxd
4/29/09
9:20 AM
Page 4
Idea Exchange Agency Management Chaos, continued from page N2
requests tend to fall on deaf ears as most agencies do not prepare such information on a regular basis. When a b uyer requests reasonable information and the seller comes back with “we don’t prepare that,” the buyer gets an immediate window into the sophistication level of the seller’s management team and business acumen. Remember, more than likely the seller will be joining the acquirer for a period of time post transaction, so the entire selling process should be looked at as a prolonged job interview. Establish and Update Requisite Legal Agreements Time and time again, sellers present themselves to the market without having property leases, employment agreements, first updated their legal agreements and underwriting market contracts, confidenlicensing files. Frankly, it is a prerequisite tiality agreements, compensation discloto sale that can easily go overlooked. When sures, etc. It is also v ery important to codiis the last time you updated your articles of incorporation or operating agreement, or fy and formalize any relationships your agency has with external parties such as reviewed your “standard” restrictive cross referral agreements or third-party covenant agreements (e.g., non-solicits, non-competes, confidentiality) in regard to producer arrangements. If you take too long to gather requested current case law? Perhaps a previous shareinformation, or it is not available, the stage holder was bought out a few years ago and has been set for your corporate documents agency to be viewed as and the stock ledger If you take too long not well-organized and were never updated. not on top of its b usiWhatever it may be, to gather requested ness. Remember, a there is often a need information, or it is buyer has to factor in to update legal docuthe future costs of ments in the middle not available, the organizing your busiof a transaction, stage has been set ness if you have not which does two things. for your agency to be already done so. An investment in time and One, it slows down viewed as not welldiligence today making the process as an additional element is organized and not on sure your agency is well-organized and added to the overflowtop of its business. capable of providing ing pile of things to standard information is do. And two, it raises an investment in the future value of the a red flag to buyers with respect to the business. Planning and preparation sellers’ overall organization and business throughout all stages of ownership are acumen. essential if one is to realize an agency’s full All legal documentation should be value at the time of disposition. IJ reviewed to make sure they are available and in good order prior to speaking with any potential buyers. This includes articles Price is a vice president with Hales & Co., located in Hales’ of incorporation or operating agreements, Harrisburg, Pa., office. Email: dprice@halesgroup.com. Phone: corporate and individual producer licenses, 717-541-9300, ext. 102. Web site: www.halesgroup.com. N4 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:20 AM
Page 5
05.04.09 NATIONAL.qxd
4/29/09
9:20 AM
Page 6
Idea Exchange Minding Your Business
How to Improve Productivity in a New Economy Agencies Must Stop Money Wasting Financial Leaks By Bill Schoeffler and Catherine Oak
T
he economy is in the tank and so is the stock market. Thousands are unemployed and many people do not know where to turn. No one is setting up charities for insurance agents just yet, but the industry is at the end of the economic w ave. Even within the ranks of the agents there is a sliding scale of growth, profitability and future potential. Those that focus in certain niches, like construction are reeling and it seems that the smaller the ag ency, the tighter the financial squeeze. The long-term soft market has wreaked havoc for the typical agency owner. Commission dollars earned to sell and service accounts have dropped. The problem is the client and the companies expect more and more o ut of the agents for less and less. Typical agency profitability levels have dropped from 25 percent of revenue or more 20 years ago, to today’s typical profit margin range of just 15 percent to 25 percent. The growth in expenses has outpaced the growth in revenue. Personnel, the biggest single agency expense, typically costs 52 percent to 73 percent of re venue. In general, owner and producer compensation costs between 25 percent and 35 percent of revenue, while office staff compensation ranges from 20 percent to 28 percent of revenue, and benefits and taxes cost 7 percent to 10 percent of revenue. Automation did not turn out to be the productivity panacea that was expected. How many agencies have cut staffing after they bought a new computer system? Sometimes staff was increased to add on an automation person or data entry person. Besides, automation expenses did not exist 30 years ago. Other expenses are going up as well. Office rent has shot through the roof in many areas. Advertising, office supplies, travel and automobile expenses all have gone up.
N6 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
Oak
Schoeffler
How to Help So can anything be done to help the typical ag ency owner stop the erosion of profits? The answ er is yes. Plugging the financial leaks in an agency can add up to sizable savings. Performing an efficiency study is the first step to understanding where these leaks exist. The place to start is with the people doing the w ork. Employees know what works and what does not Plugging the work. Management’s role is to determine which is financial leaks the most cost effective in an agency solution, if any. To start, management should ask can add up to employees the following sizable savings. question: What three things can be done to make your job more efficient? Bring the staff together to discuss the suggestions. Brainstorm on the issues. Map out workflow on a wall chart. See if there are any roadblocks to getting the job done. Is the staff double entering data? Is the agency paperless? Is the layout of the office efficient? Does the staff ha ve to go long distances or are they impeded when retrieving commonly used files, copy or fax machines, etc. Is the office too small? Does the agency have enough properly functioning and up-to-date office equipment? Sometimes one extra fax machine or printer can make a big difference in productivity. Is the telephone system efficient? Delegate some of the problem solving to the staff and have follow-up meetings. The best suggestion should win a reward, perhaps $100 or more depending upon the sa vings. This process should be repeated annually. Other Areas to Review Next, the owners and management should explore other areas that might be causing financial leaks. Compare the agency’s productivity to peer groups using one of the published benchmark studies. Is the agency overstaffed or understaffed? If overstaffing exists, why and what can be done? Get rid of under-performing employees and reward the high performers. continued on page N8 www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:21 AM
Page 7
05.04.09 NATIONAL.qxd
4/29/09
9:21 AM
Page 8
Idea Exchange Minding Your Business New Economy, continued from page N6
Has management provided the employees with a clear direction for the ag ency? Employees need to be pointed in the right direction and told what their purpose is. Having a purpose will prevent employees from getting bogged down in the minutia. How is employee morale? Any number of
things can cause poor morale. Often it is related to perceived unequal treatment. Make sure all employees are expected to meet the same high standards. Be consistent with your relationship. The annual performance review is the time to clearly communicate performance expectations
Celebrating Entrepreneurial Spirit
@#@# NZjc\ VcY H]^gaZn NZjc\
Meet Shirley Yeung, President, and K.K. Yeung, Excess & Surplus Line Department Manager, d[ JH6h^V >chjgVcXZ HZgk^XZh! V LZhiZgc =Zg^iV\Z <ZcZgVa 6\Zci h^cXZ '%%)# H]^gaZn [djcYZY ]Zg XdbeVcn ^c &..* VcY ]Vh \gdlc ]Zg Wjh^cZhh l^i] Vc jchideeVWaZ ZcigZegZcZjg^Va he^g^i# ¹> kVajZ i]Z hZXjg^in d[ LZhiZgc =Zg^iV\Z¼h 6 MK gVi^c\ VcY WgdVY heZXigjb d[ egdYjXih# I]Z^g jcYZglg^i^c\ Y^hX^ea^cZ VcY adc\"iZgb Xdbb^ibZci bV`Z djg gZaVi^dch]^e higdc\ VcY kVajVWaZ# > VeegZX^ViZ i]Z [VXi i]Vi LZhiZgc =Zg^iV\Z \VkZ jh i]Z deedgijc^in id eVgicZg l^i] i]Zb VcY WZa^ZkZ djg gZaVi^dch]^e l^aa Xdci^cjZ id i]g^kZ#º ¸H]^gaZn NZjc\ Western Heritage celebrates entrepreneurial spirit that is the foundation for loyal and dedicated partnerships. westernheritageins.com Western Heritage and design is a federally registered service mark of Scottsdale Insurance Company.
N8 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
and past results. Is the staff properly trained? On the job training is convenient, but it perpetuates the same old inefficient ways of working. When possible, it is better to send the employees outside the agency for new ideas. Have the employee inform the rest of the staff on what they learned after they return from trainings. Does the agency cross-sell on its accounts? Relationships are strengthened when an agency sells more than one coverage to its clients. Efficiencies are g ained by earning more commission per account and spending less time generating the sale since they are already familiar with the firm. Does the agency have any program business? Selling a unique product that is slot rated can be an incredible income g enerator. Usually these sales require less work to sell and service. The similarity of the book of business can create high productivity. Do the producers pre-screen their prospects? Pre-screening will help eliminate business that the firm cannot write or sho uld not write. Know the price, product and politics needed to close the sale as soon as possible. It is best to find o ut the quality of the prospect in the phone call before the visit, than to find out during the marketing process. Summary Starting this process will take a commitment on the part of all o wners, managers and employees. Keep in mind the first step is the hardest. Sometimes it helps to bring in an outside partner to get the process started. Oak & Associates can assist an agency in performing a Management & Organizational Efficiency study. Small gains when compounded over time result in enormous savings. The goal is to work smarter not harder. Implementing the ideas that are laid out in this article will take some time, but will change the way you do business forever. IJ Oak and Schoeffler are partners at the international consulting firm Oak & Associates, providing services for mergers, acquisitions, management and financial consulting. Contact: 707-935-6565. E-mail: bill@oakandassociates.com. Web site: www.oakandassociates.com. www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:21 AM
Page 9
A Perfect Fit
Homeowners & Dwellings Mobile Home Motorcycle & ATV
Boats Flood Personal Watercraft
Farm & Ranch and more
Whether coverage is for motorcycle, agriculture, watercraft, or personal property, American Reliable Insurance Company, a member of Assurant Specialty Property has the programs and experience to be your insurance company of choice. Look to American Reliable Insurance Company for a perfect fit to all your specialty insurance product needs.
Building Relationships. Celebrating Partnerships. For more information, call toll-free at 1-800-535-1333, or visit us online at americanreliable.com.
American Reliable Insurance Company is proud to be a member of: AR28432-1005 todl Š Assurant, Inc. 2005
05.04.09 NATIONAL.qxd
4/29/09
9:21 AM
Page 10
Idea Exchange Survey Regional Carriers
Agents, Rate Your Regional Carriers in a N ew Insurance Journal Sponsored Survey C
hannel Harvest Research and Insurance Journal have announced a major new study in the independent agency system that will probe agents’ attitudes toward carrier relationships and the insurance companies they represent — with a special focus on larger regional carriers, often called “Super Regionals.” The survey is designed for carriers seeking to understand in an unbiased fashion what agents look for from carriers, and ho w specific carriers and their competitors are rated b y agents. The survey will provide strategic, actionable information for: • Super-regional carriers (about their peer companies). • Smaller regionals (that are growing and/or competing with larger regionals). • National carriers competing head-to-head with regionals in certain areas of the co untry. The syndicated research — with multiple
subscribers sharing the cost — will pro vide an objective complement to any proprietary surveys carriers may do. This project will provide hard data and a strategic roa dmap for carriers looking to boost their b usiness in the challenging year ahead. The survey will address such key questions as: • What are the most important chara cteristics in agency benefits and service from carriers when agents choose those to place business with? • How do agents rate regional carriers they have worked with — on 20 different fa ctors? • How do agents rate specific carriers overall compared with the industry? • And many other important issues. To participate in this survey of independent insurance agents, sponsored by Insurance Journal, visit: http://www.insurance journal.com/carriersurvey2009. The survey takes just 15 minutes to com-
Turnkey Reinsurance NAS provides full turnkey reinsurance of specialty products that includes underwriting, risk management, distribution alternatives, expert claims handling, risk transfer up to 100%, and marketing, sales and PR assistance. NAS delivers products on a reinsurance basis to insurers such as package carriers, specialty insurers and RRG’s. With NAS’ turnkey reinsurance, carriers can offer state-of-the-art products to their insureds and avoid the cost of research, development of human resources and risk of a new product. NAS Insurance Services is an independent Underwriting Manager with full binding authority to underwrite on behalf of highly rated carriers. For over 30 years, NAS has remained a product-oriented company, ever on the leading edge of innovation with a constant commitment to the development of specialty products.
To participate in a survey about agents’ attitudes toward regional carriers, which is sponsored by Insurance Journal, visit: http://www.insurancejournal.com/ carriersurvey2009. plete — and survey participants will receive a summary of the findings if an e-mail address is provided when taking the survey. All agent responses are anonymous to any carrier purchasing the report of survey findings. Data are reported only in the aggregate. The findings also will be released in a special report, “How Independent Insurance Agents View Business with Large Regional Carriers,” in an upcoming issue of Insurance Journal. For more information about the survey or Channel Harvest Research, go to www.channelharvest.com. IJ
Employment Practices Healthcare Professional Liability e-MD™ NetGuard™ MEDEFENSE™ Identity Theft Miscellaneous E&O Tax Audit writeNOW! Programs
16501 Ventura Blvd., Suite 200 Encino, CA 91436 www.nasinsurance.com LIC #0677191 N10 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:21 AM
Page 11
05.04.09 NATIONAL.qxd
4/29/09
9:21 AM
Page 12
Special Report Salute to Super Regionals
T
he original criteria and objective definition for Super Regional P/C Insurersâ&#x201E;˘ were established in the Feb. 12, 2007 issue of Insurance Journal. Prior to the establishment of an industry-wide definition, a number of property/casualty insurers had referred to themselves as Super Regionals. Demotech Inc., the official research partner of Insurance Journal, has been called on to examine the criteria, make changes to the composition of that criteria and update the list of Super R egionals. To continue the discussion on the subject of what constitutes a Super Regional and to give definition to this important group of
insurers, Demotech, an actuarial services firm based in Columbus, Ohio, analyzed year-end 2008 data. This data was utilized to classify and stratify those insurers reporting data to the National Association of Insurance Commissioners (NAIC). Company Classification System The experts at Demotech have refined their classification system for property/casualty insurance companies. The Demotech Company Classification System categorizes all property/casualty insurers into one of 11 categories based on an analysis of data reported by the companies to the NAIC.
N12 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
The 11 categories that comprise the system are: Nationals, Near Nationals, Super Regionals, Regionals, State Specialists, Coverage Specialists, Strategic Subsidiaries, Risk Retention Groups, Surplus Lines Carriers, Reinsurers and companies with less than $1 million in direct written premium. A company cannot be assigned to more than one category. Therefore, a company not designated as a Super Regional is given another classification, perhaps Near National, Regional, or State Specialist. Super Regional Criteria and Thresholds To select the companies for the Super www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:21 AM
Page 13
Regional Property/Casualty Insurer™ list, Demotech used these specific, objective qualifying criteria and thresholds: • Active, individual companies not under regulatory supervision at Dec. 31, 2008; • Reporting data to the NAIC using the property/casualty annual statement format; • At least $1 million of direct written premium in each of two to 34 states at Dec. 31, 2008; • Less than 90 percent of Dec. 31, 2008, direct written premium in any one state; • Less than 90 percent of Dec. 31, 2008 direct written premium in any one line of
business; • Policyholders surplus of at least $100 million at Dec. 31, 2008; • Net written premium of at least $ 50 million at Dec. 31, 2008; • Direct written premium of at least $ 25 million at Dec. 31, 2008.
2009 Property & Casualty Insurance Cos. Demotech Company Classifications Direct Premium Written Less than $1 million 5.2%
Nationals 1.6% Near Nationals 2.4%
Reinsurers 2.3%
Super Regionals 5.4% Surplus Lines Carriers 4.8% Risk Retention Groups 8.0%
In general, a Super Regional Property/ Casualty Insurer™ is an individual company writing multiple lines of insurance in multiple states. Risk retention groups, surplus lines insurers and reinsurers are not eligible for the Super Regional category.
Regionals 10.7%
Strategic Subsidiaries 15.9%
State Specialists 31.3%
Coverage Specialists 12.4%
continued on page N14
2009 Super Regional Property/Casualty Insurers™ Alphabetical Listing Acuity a Mutual Insurance Co. AIG Centennial Insurance Co. AIG Premier Insurance Co. AIU Insurance Co. Alaska National Insurance Co. All America Insurance Co. American Commerce Insurance Co. American Family Home Insurance Co. American Family Mutual Insurance Co. American Hardware Mutual Insurance Co. American International Insurance Co. American Mercury Insurance Co. American Road Insurance Co. Amerisure Insurance Co. Amerisure Mutual Insurance Co. Atlantic States Insurance Co. Auto Club Insurance Assn. Auto Owners Insurance Co. Automobile Insurance Co of Hartford CT Bankers Standard Insurance Co. Berkley Regional Insurance Co. Bituminous Casualty Corp. Bituminous Fire & Marine Insurance Co. Brotherhood Mutual Insurance Co. Builders Mutual Insurance Co. California Casualty Indemnity Exchange Cambridge Mutual Fire Insurance Co. Canal Insurance Co. Capitol Indemnity Corp. Central Mutual Insurance Co. Century-National Insurance Co. Chicago Insurance Co. Citizens Insurance Co. of America Columbia Mutual Insurance Co. Companion Property & Casualty Insurance Co. Concord General Mutual Insurance Co. Cornhusker Casualty Co. Country Mutual Insurance Co. Courtesy Insurance Co. Cumberland Mutual Fire Insurance Co. Cypress Insurance Co. Daimlerchrysler Insurance Co. Darwin National Assurance Co. Delos Insurance Co. Donegal Mutual Insurance Co. Erie Insurance Co. Erie Insurance Exchange Farm Bureau Mutual Insurance Co. Farm Family Casualty Insurance Co. Farmers Alliance Mutual Insurance Co.
www.insurancejournal.com
Farmers Automobile Insurance Assn. Farmers Mutual Hail Insurance Co. of IA Farmers Mutual Insurance Co. of NE Farmington Casualty Co. Farmland Mutual Insurance Co. FCCI Insurance Co. Federated Service Insurance Co. Fidelity National Insurance Co. Fire Insurance Exchange First Colonial Insurance Co. Frankenmuth Mutual Insurance Co. General Casualty Co. of WI General Fidelity Insurance Co. Grange Insurance Association Grange Mutual Casualty Co. Guideone Mutual Insurance Co. Harco National Insurance Co. Harford Mutual Insurance Co. Harleysville Mutual Insurance Co. Harleysville Preferred Insurance Co. Harleysville Worcester Insurance Co. Hartford Insurance Co. of IL Hastings Mutual Insurance Co. Hudson Insurance Co. IMT Insurance Co. Mutual Indiana Insurance Co. Insurance Co. of North America Insurance Co. of the West Jewelers Mutual Insurance Co. Keystone Insurance Co. Lightning Rod Mutual Insurance Co. Lititz Mutual Insurance Co. Lyndon Property Insurance Co. Memberselect Insurance Co. Merchants Mutual Insurance Co. Mercury Casualty Co. Merrimack Mutual Fire Insurance Co. MHA Insurance Co. Mid-Century Insurance Co. Mid-Continent Casualty Co. Middlesex Insurance Co. Milbank Insurance Co. Mitsui Sumitomo Insurance Co. of America Motorists Mutual Insurance Co. Motors Insurance Corp. Mountain West Farm Bureau Mutual Insurance Co. Mutual of Enumclaw Insurance Co. Nationwide Mutual Fire Insurance Co. Netherlands Insurance Co. New York Marine & General Insurance Co.
NGM Insurance Co. North River Insurance Co. North Star Mutual Insurance Co. Occidental Fire & Casualty Co. of NC Old Republic General Insurance Corp. Old United Casualty Co. OneBeacon Insurance Co. Owners Insurance Co. Pacific Specialty Insurance Co. Peerless Insurance Co. Penn National Security Insurance Co. Pennsylvania General Insurance Co. Pennsylvania Manufacturers Assn. Insurance Pennsylvania National Mutual Casualty Insurance Preferred Mutual Insurance Co. Preferred Professional Insurance Co. Progressive Gulf Insurance Co. Progressive Northwestern Insurance Co. Protective Insurance Co. Public Service Mutual Insurance Co. Quincy Mutual Fire Insurance Co. Republic Indemnity Co. of America Republic Underwriters Insurance Co. Safeco Insurance Co. of IL Secura Insurance a Mutual Co. Selective Insurance Co. of America Selective Way Insurance Co. Seneca Insurance Co. Inc Shelter Mutual Insurance Co. Sompo Japan Insurance Co. of America State Auto Property & Casualty Insurance Co. State Automobile Mutual Insurance Co. Stonebridge Casualty Insurance Co. Technology Insurance Co. Inc. Tower Insurance Co. of NY Toyota Motor Insurance Co. Trinity Universal Insurance Co. Triton Insurance Co. Unigard Insurance Co. United Fire & Casualty Co. Utica Mutual Insurance Co. Vanliner Insurance Co. Vermont Mutual Insurance Co. Virginia Surety Co. Inc. West Bend Mutual Insurance Co. Western National Mutual Insurance Co. Westfield Insurance Co. Westfield National Insurance Co. Yosemite Insurance Co.
May 4, 2009 INSURANCE JOURNAL-NATIONAL REGION | N13
05.04.09 NATIONAL.qxd
4/29/09
9:21 AM
Page 14
Special Report Salute to Super Regionals Super Regionals, continued from page N13
The 2009 Super Regional Property/Casualty Insurers™ Utilizing these quantitative criteria, Demotech identified 149 Super Regional Property/Casualty Insurers™ for 2009, based upon year-end 2008 annual statement data. They are presented in this exclusive Insurance Journal Special Report both alphabetically and by size as ranked by direct premiums written as of Dec. 31, 2008. Also included in this special report are the 14 companies that are new to the Super Regional list, as well as 17 insurers that are no longer classified as Super Regionals, but have been reclassified into another one of Demotech’s categories based on year-end 2008 information. “Super Regional insurers are critically important to the insurance industry and to
their agents, producers and insureds,” said Joseph Petrelli, president, Demotech. “These companies are strong, stable markets that have been working hard for their agents and insureds. This is why Insurance Journal initially expressed interest in quantifying and identifying what criteria can be used to define an insurer as a Super Regional.” Insurance Journal and Demotech want this year’s report to continue the discussion on the role of Super Regionals, as well as the definition and criteria used in determining the classification, so that future reports can continue to refine an industry definition of Super Regional Property/Casualty Insurers™. “Insurers and interested readers are encouraged to examine the selection crite-
NEW 2009 Super Regionals Company Name All America Insurance Co. American Road Insurance Co. Auto Club Insurance Assn. Bankers Standard Insurance Co. Canal Insurance Co. Daimlerchrysler Insurance Co. Occidental Fire & Casualty Co. of NC Republic Indemnity Co. of America Tower Insurance Co. of NY Toyota Motor Insurance Co. Triton Insurance Co. Netherlands Insurance Co. Safeco Insurance Co. of IL Westfield Insurance Co.
2009 Demotech Company Classification
2008 Demotech Company Classification
Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional
Regional Coverage Specialist Coverage Specialist Strategic Subsidiary Near National Coverage Specialist Regional Coverage Specialist State Specialist Regional Coverage Specialist Strategic Subsidiary Coverage Specialist Near National
ria and thresholds used to determine the list of 2009 Super Regionals. Our selection criteria are quantitative and transparent. We remain committed to setting benchmarks at levels that accurately categorize the industry,” said Barry J Koestler II, CFA, senior financial analyst and chief ratings officer, Demotech. The authors stress that this is an o bjective stratification of the companies that comprise the industry, not ratings of the individual insurers. Inclusion on the list of Super Regionals is not meant to suggest that a company is superior to companies not categorized as Super Regionals. Future issues of Insurance Journal will report on State Specialists, Coverage Specialists, Regionals and other classifications created and defined by Demotech. Since 1985, Demotech Inc. has been providing independent Financial Stability Ratings® of property/casualty insurers and title 2007 Demotech insurance underwriters. Its services Company Classification also include statements of actuarial Regional opinion and pricing assistance. For Coverage Specialist Coverage Specialist more information, visit Strategic Subsidiary www.demotech.com. Near National Coverage Specialist Please send suggestions, comSuper Regional ments and criticisms to Joseph Coverage Specialist Petrelli at e-mail: State Specialist Regional jpetrelli@demotech.com, or Andrew Coverage Specialist Simpson, vice president of editorial Strategic Subsidiary Coverage Specialist for Insurance Journal at e-mail: Super Regional asimpson@insurancejournal.com. IJ
RECLASSIFIED 2008 Super Regionals Company Name Alfa Insurance Corp. Central States Indemnity Co. of Omaha EMCASCO Insurance Co. Everest National Insurance Co. Hartford Steam Boiler Inspection & Insurance Co. Lumbermens Underwriting Alliance Michigan Millers Mutual Insurance Co. National Farmers Union Property & Casualty National Liability & Fire Insurance Co. Navigators Insurance Co. OneBeacon America Insurance Co. Pennsylvania Lumbermens Mutual Insurance Providence Mutual Fire Insurance Co. Travelers Casualty Insurance Co. of America Truck Insurance Exchange Trumbull Insurance Co. US Fidelity & Guaranty Co.
2009 Demotech Company Classification
2008 Demotech Company Classification
2007 Demotech Company Classification
Reason Not 2009 Super Regional
Strategic Subsidiary Regional Regional Near National Coverage Specialist Regional Regional Regional Near National Near National Near National Regional Regional Near National Near National Regional Coverage Specialist
Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional
Super Regional Super Regional Regional Super Regional Near National Regional Super Regional Regional Super Regional Super Regional Super Regional Regional Regional Coverage Specialist Super Regional Super Regional Near National
PHS, NPW NPW PHS States > 34 LOB > 90% PHS PHS PHS States > 34 States > 34 States > 34 PHS PHS States > 34 States > 34 PHS LOB > 90%
PHS = Policyholders’ Surplus; LOB = Line of Business; NPW = N et Premium Written N14 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:21 AM
Page 15
2009 Super Regional P/C Insurers
TM
As Developed by Demotech Inc. for Insurance Journal, Ranked by Direct Written Premium as of 12/31/08. Company
12/31/08 DPW 000’s omitted
Group Name
1
American Family Mutual Insurance Co.
5,272,230
American Family
WI
2 3
Erie Insurance Exchange AIU Insurance Co.
3,146,696 2,770,742
Erie American International
PA NY
4
Nationwide Mutual Fire Insurance Co.
2,576,627
Nationwide
OH
5
Mid-Century Insurance Co.
2,461,429
Zurich
CA
6
Auto Owners Insurance Co.
2,119,833
Auto Owners
MI
7 8
Fire Insurance Exchange Westfield Insurance Co.
1,686,491 1,460,344
Zurich Westfield
CA OH
9
Safeco Insurance Co. of IL
1,352,538
Liberty Mutual
IL
10
Owners Insurance Co.
1,198,095
Auto Owners
OH
11 12
Country Mutual Insurance Co. Peerless Insurance Co.
1,146,917 1,073,459
Country Ins./Financial Liberty Mutual
IL NH
13 14 15
Shelter Mutual Insurance Co. Citizens Insurance Co. of America Netherlands Insurance Co.
931,235 927,098 790,738
Shelter The Hanover Liberty Mutual
MO MI NH
16 17 18 19 20 21
Farm Bureau Mutual Insurance Co. Acuity a Mutual Insurance Co. Mercury Casualty Co. Grange Mutual Casualty Co. West Bend Mutual Insurance Co. Automobile Insurance Co. of Hartford CT
787,823 783,483 756,465 704,217 668,505 636,607
Iowa Farm Bureau N/A Mercury General Grange Mutual Casualty West Bend Mutual Travelers
IA WI CA OH WI CT
22 23
NGM Insurance Co. State Auto Property & Casualty Insurance Co.
623,471 612,395
Main Street Amer State Auto Mutual
FL IA
24 25 26 27 28 29 30
Farmers Mutual Hail Insurance Co. of IA Central Mutual Insurance Co. Progressive Northwestern Insurance Co. Selective Way Insurance Co. Tower Insurance Co. of NY Pennsylvania National Mutual Casualty Ins. Harleysville Mutual Insurance Co.
555,396 525,862 507,064 505,944 469,578 462,920 433,462
Farmers Mut Hail Central Mutual Progressive Selective Tower Pennsylvania National Harleysville
IA OH OH NJ NY PA PA
31
State Automobile Mutual Insurance Co.
427,502
State Auto Mutual
OH
32 33
Motorists Mutual Insurance Co. American International Insurance Co.
413,035 412,201
Motorists Mutual American International
OH NY
34 35 36 37
Erie Insurance Co. Selective Insurance Co. of America Frankenmuth Mutual Insurance Co. General Casualty Co. of WI
407,630 407,016 399,711 399,301
Erie Selective Frankenmuth Mutual QBE
PA NJ MI WI
38
Virginia Surety Co. Inc.
399,183
Warranty
IL
39 40 41 42
Amerisure Mutual Insurance Co. Memberselect Insurance Co. Farm Family Casualty Insurance Co. Technology Insurance Co. Inc.
398,301 389,425 380,728 359,553
Amerisure Automobile Club MI American Natl. Financial Amtrust
MI MI NY NH
43
Bituminous Casualty Corp.
345,575
Old Republic
IL
www.insurancejournal.com
State of Domicile
Number/States with Greater Than $1 Million DPW 12/31/2008 18 - AZ,CO,ID,IL,IN,IA,KS,MN,MO,NE,NV,ND,OH,OR, SD,UT,WA,WI 10 - DC,IL,IN,MD,NC,OH,PA,TN,VA,WI 25 - AL,AK,CA,CO,CT,DE,GA,KS,LA,ME,MD,MI,MO, NJ,NY,OH,OR,PA,TN,TX,VT,VA,WA,WV,WI 31 - AL,AZ,AR,CA,CT,DE,DC,FL,GA,IL,IN,KY,ME,MD,MI, MS,NH,NY,NC,OH,OK,OR,PA,RI,SC,TN,TX,VT,VA,WA,WV 30 - AL,AZ,AR,CA,CO,ID,IL,IN,IA,KS,MI,MN,MO,MT, NE,NV,NM,ND,OH,OK,OR,SD,TN,TX,UT,VT,VA,WA,WI,WY 25 - AL,AZ,AR,CO,FL,GA,ID,IL,IN,IA,KS,KY,MI,MN, MO,NE,NC,ND,OH,SC,SD,TN,UT,VA,WI 14 - AL,CA,CO,MI,MO,MT,NE,NV,ND,SD,TX,UT,WI,WY 34 - AZ,AR,CO,DE,FL,GA,ID,IL,IN,IA,KS,KY,LA,MD,MI,MN,MS, MO,MT,NE,NM,NC,ND,OH,OK,PA,SC,SD,TN,TX,VA,WA,WV,WI 29 - AL,AK,AR,CA,CT,FL,GA,ID,IL,IN,KY,MD,MI,MN,MS,MO, MT,NE,NV,OH,OR,PA,TN,TX,UT,VA,WA,WI,WY 24 - AL,AZ,AR,CO,FL,GA,ID,IL,IN,IA,KS,KY,MN,MO,NE,NC,ND, OH,SC,SD,TN,UT,VA,WI 14 - AK,AZ,CO,IL,IA,KS,MN,MO,NV,ND,OK,OR,WA,WI 32 - AR,CA,CT,DE,DC,GA,IL,IN,IA,KS,KY,LA,ME,MD,MA,MI,MN, MO,NE,NH,NY,NC,OH,OK,PA,RI,SC,TN,TX,VT,VA,WI 13 - AR,CO,IL,IN,IA,KS,KY,LA,MS,MO,NE,OK,TN 15 - CT,GA,IL,IN,ME,MA,MI,NH,NJ,NY,OH,PA,RI,VA,WI 32 - AR,CA,CT,DE,GA,IL,IN,IA,KS,KY,LA,ME,MD,MA,MI,MN,MO, NE,NH,NJ,NY,NC,OH,OK,PA,RI,SC,TN,TX,VT,VA,WI 8 - AZ,IA,KS,MN,NE,NM,SD,UT 17 - AZ,CO,ID,IL,IN,IA,KS,KY,MI,MN,MO,NE,ND,OH,SD,TN,WI 5 - AZ,CA,NV,NY,VA 6 - GA,IL,IN,KY,OH,TN 7 - IL,IN,IA,MI,MN,OH,WI 34 - AL,AZ,AR,CO,CT,DC,GA,ID,IL,IN,KS,KY,LA,ME,MD,MI,MN, MS,MO,MT,NV,NH,NY,NC,OH,OK,OR,PA,SC,TN,UT,VA,WA,WI 16 - CT,DE,FL,ME,MD,MA,NH,NY,NC,PA,RI,SC,TN,TX,VT,VA 26 - AL,AZ,AR,FL,GA,IL,IN,KS,KY,MD,MI,MN,MS,MO,NC,ND, OH,OK,PA,SC,TN,TX,UT,VA,WV,WI 15 - AR,CO,IL,IN,IA,KS,MI,MN,MO,NE,ND,OH,OK,SD,WI 18 - AZ,CO,CT,GA,IL,IN,MA,NH,NJ,NM,NY,NC,OH,OK,SC,TN,TX,VA 17 - AK,AZ,AR,CT,HI,ID,IN,KS,ME,MO,MT,NV,NY,ND,RI,VA,WA 10 - DE,DC,GA,MD,MI,NJ,NY,PA,SC,VA 17 - AZ,AR,CA,CT,FL,GA,ID,IL,MA,MN,NV,NJ,NY,PA,SC,TX,WA 12 - AL,DE,GA,MD,NJ,NY,NC,PA,SC,TN,TX,VA 21 - AL,AR,CA,CT,DE,DC,FL,GA,LA,MD,MA,MS,NJ,NC,OH,PA, RI,SC,TN,TX,VA 24 - AL,AZ,AR,CO,GA,IL,IN,IA,KS,KY,MD,MI,MN,MS,MO,NC,OH, PA,SC,TN,TX,VA,WV,WI 5 - IN,KY,OH,PA,WV 34 - AL,AK,AZ,AR,CO,DE,DC,FL,GA,ID,IL,IN,IA,KY,LA,MD,MA, MI,MN,MS,MO,MT,NE,NV,NH,NM,NY,OK,PA,RI,SC,TX,UT,WA 10 - IL,IN,MD,NY,NC,OH,PA,TN,VA,WI 11 - CA,DE,DC,GA,HI,MD,NJ,NY,PA,SC,VA 9 - GA,IL,IN,MI,NC,OH,SC,TN,WI 20 - AR,CO,CT,IL,IN,IA,KS,KY,MA,MI,MN,MO,NE,NY,ND,OH, PA,SD,TX,WI 30 - AZ,AR,CA,CT,DE,DC,FL,GA,IL,IN,IA,KS,LA,MD,MA,MI,MN, MO,NE,NY,NC,OH,OK,PA,SC,TN,TX,VA,WA,WI 19 - AL,AR,CA,FL,GA,IL,IN,KS,KY,LA,MI,MS,MO,NC,OK,SC,TN,TX,WI 7 - IL,IN,IA,MI,NE,ND,OH 10 - CT,DE,ME,MA,NH,NJ,NY,RI,VT,WV 26 - AL,AZ,AR,CT,DE,FL,GA,ID,IL,IN,KS,MD,MA,MN,MS,MO, MT,NH,NY,NC,PA,SC,TN,TX,VT,VA 31 - AL,AZ,AR,CO,FL,GA,IL,IN,IA,KS,KY,LA,MD,MI,MN,MS, MO,MT,NE,NM,NC,OK,OR,PA,SC,TN,TX,UT,VA,WI,WY
May 4, 2009 INSURANCE JOURNAL-NATIONAL REGION | N15
05.04.09 NATIONAL.qxd
4/29/09
9:21 AM
Page 16
Special Report Salute to Super Regionals Company
12/31/08 DPW 000’s omitted
Group Name
44
Pennsylvania Manufacturers Assn. Ins.
337,846
PA Manufacturers
PA
45
Delos Insurance Co.
319,717
Lightyear Delos
DE
46 47 48 49
Auto Club Insurance Assn. Mutual of Enumclaw Insurance Co. Indiana Insurance Co. United Fire & Casualty Co.
302,054 300,844 298,040 297,973
Automobile Club MI Mutual of Enumclaw Liberty Mutual United Fire & Casualty
MI WA IN IA
50
Motors Insurance Corp.
296,305
GMAC Insurance Holding
MI
51 52
Hastings Mutual Insurance Co. Guideone Mutual Insurance Co.
291,534 286,655
N/A Guideone
MI IA
53 54
Merrimack Mutual Fire Insurance Co. Hudson Insurance Co.
286,580 269,567
Andover Fairfax Financial
MA DE
55 56 57 58
Progressive Gulf Insurance Co. Harleysville Worcester Insurance Co. Quincy Mutual Fire Insurance Co. Farmington Casualty Co.
269,379 264,127 263,152 261,958
Progressive Harleysville Quincy Mutual Travelers
MS PA MA CT
59 60 61
Insurance Co. of the West Westfield National Insurance Co. Old Republic General Insurance Corp.
258,771 257,473 257,086
ICW Westfield Old Republic
CA OH IL
62
California Casualty Indemnity Exchange
256,312
California Cas Mgmt
CA
63 64 65 66
Companion Property & Casualty Insurance Co. Unigard Insurance Co. Secura Insurance a Mutual Co. Triton Insurance Co.
252,624 252,292 239,263 231,299
BCBS of SC QBE Secura Citigroup
SC WA WI TX
67 68
FCCI Insurance Co. Utica Mutual Insurance Co.
228,471 227,234
FCCI Mutual Utica
FL NY
69 70 71
Amerisure Insurance Co. Vermont Mutual Insurance Co. AIG Centennial Insurance Co.
225,241 215,176 212,890
Amerisure Vermont Mutual American International
MI VT PA
72 73 74 75 76
Mid-Continent Casualty Co. Western National Mutual Insurance Co. Preferred Mutual Insurance Co. Farmers Automobile Insurance Assn. Brotherhood Mutual Insurance Co.
211,459 211,280 208,502 208,013 207,725
American Financial Western National N/A Pekin N/A
OH MN NY IL IN
77 78 79
Donegal Mutual Insurance Co. Farmers Mutual Insurance Co. of NE American Road Insurance Co.
207,332 204,169 199,326
Donegal N/A American Road
PA NE MI
80 81
Alaska National Insurance Co. Canal Insurance Co.
196,913 196,538
N/A Canal
AK SC
82
American Family Home Insurance Co.
191,855
Munich Re
FL
83
Courtesy Insurance Co.
189,417
JM Family
FL
84
Sompo Japan Insurance Co. of America
187,516
Sompo Japan
NY
85
Mitsui Sumitomo Insurance Co. of America
185,003
Mitsui Sumitomo
NY
86
North River Insurance Co.
182,574
Fairfax Financial
NJ
87 88
American Commerce Insurance Co. Stonebridge Casualty Insurance Co.
179,965 179,672
Commerce Aegon US Holding
OH OH
89 90
North Star Mutual Insurance Co. Vanliner Insurance Co.
175,720 172,041
North Star N/A
MN MO
91
New York Marine & General Insurance Co.
164,797
New York Marine & General NY
92
Lyndon Property Insurance Co.
162,031
Protective Life
N16 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
State of Domicile
MO
Number/States with Greater Than $1 Million DPW 12/31/2008 31 - AL,AZ,AR,CA,CO,CT,DE,FL,GA,IL,IN,KS,KY,MD,MA,MI,MN, MS,MO,NV,NH,NJ,NY,NC,PA,SC,TN,TX,VA,WV,WI 30 - AL,AZ,AR,CA,CT,DE,DC,FL,GA,HI,IL,IN,KS,LA,MD,MI,MN, MS,MO,NE,NV,NJ,NY,OH,PA,TN,TX,VA,WA,WI 5 - MI,MN,NE,ND,WI 4 - ID,OR,UT,WA 7 - IL,IN,KY,MI,NJ,OH,TN 22 - AL,AR,CO,FL,ID,IL,IN,IA,KS,LA,MN,MS,MO,NE,NM,ND,SD, TN,TX,UT,WI,WY 26 - AL,AR,CA,CO,FL,GA,IL,IN,IA,KS,LA,MI,MN,MO,NE,NJ,NM, NY,NC,OH,OK,PA,SC,TN,TX,WI 5 - IL,IN,MI,OH,WI 34 - AL,AZ,CA,CO,CT,DC,FL,GA,IL,IN,IA,KS,KY,LA,MD,MI,MN, MS,MO,NE,NJ,NY,NC,ND,OH,OK,OR,PA,SC,TN,TX,VA,WA,WI 8 - CT,IL,ME,MA,NH,NJ,NY,RI 30 - AL,AZ,AR,CA,CO,DC,FL,GA,HI,IL,IN,LA,MD,MA,MI,MN,MO, NV,NJ,NY,NC,OH,OR,PA,SC,TN,TX,UT,VA,WA 3 - GA,MS,VA 7 - CT,ME,MA,NH,NY,RI,VT 5 - CT,MA,NJ,NY,RI 26 - AL,CA,CO,CT,DE,DC,GA,IL,IN,IA,KS,KY,MD,MI,MN,MS,MO, NM,NY,NC,OK,OR,PA,SC,TN,TX 14 - AK,AZ,CA,CO,FL,ID,MS,MO,NV,OR,TN,TX,UT,WA 9 - CA,IL,IN,IA,KY,MN,OH,PA,TN 22 - AZ,CA,CO,CT,DC,FL,GA,HI,IL,MD,MA,MO,NV,NH,NJ,NY, NC,PA,RI,SC,TX,VA 22 - AL,AZ,CA,CO,CT,DE,GA,ID,IN,IA,KS,KY,MD,MN,NV,NM,OK, PA,TN,TX,VA,WA 17 - AL,FL,GA,IL,IN,KY,LA,MD,MS,NJ,NC,PA,SC,TN,TX,VA,WI 8 - AZ,CA,ID,MT,NV,OR,UT,WA 12 - AZ,CO,IL,IN,IA,KS,KY,MI,MN,MO,ND,WI 25 - AL,AZ,CA,CO,DE,FL,GA,HI,IN,IA,KS,MN,MO,NJ,NM,NC,OH, PA,SC,TN,TX,VA,WA,WV,WI 10 - AL,FL,GA,IL,IN,KY,MI,NC,SC,TN 25 - CO,CT,DE,FL,GA,IL,IN,KY,MD,MA,MI,MN,MO,NH,NJ,NY, NC,OH,PA,SC,TN,TX,VA,WA,WI 15 - AL,AR,FL,GA,IL,IN,KS,KY,MI,MS,MO,NC,SC,TN,TX 7 - CT,ME,MA,NH,NY,RI,VT 31 - AL,AZ,CT,DE,DC,FL,GA,IN,KS,LA,ME,MI,MN,MO,MT,NH, NJ,NY,NC,OH,OK,PA,RI,SC,TN,TX,VT,VA,WA,WV,WI 14 - AR,CO,FL,KS,MI,MO,MT,NM,ND,OK,OR,TX,UT,WY 5 - IA,MN,ND,SD,WI 4 - MA,NH,NJ,NY 4 - IL,IN,IA,WI 25 - AZ,AR,CA,CO,GA,IL,IN,IA,KS,KY,MD,MI,MS,MO,NM,NC,OH, OK,OR,PA,SC,TN,VA,WA,WV 5 - DE,MD,OH,PA,VA 2 - NE,SD 28 - AL,CA,CO,FL,GA,IL,IN,KS,KY,LA,MD,MA,MI,MN,MS,MO,NE, NJ,NY,NC,OH,OK,PA,SC,TN,TX,VA,WI 6 - AK,CA,ID,LA,OR,WA 29 - AL,AZ,AR,CO,CT,DE,FL,GA,IL,IN,KY,ME,MD,MS,MO,NV,NC, OH,OK,OR,PA,RI,SC,TN,UT,VA,WA,WV,WI 30 - AL,AZ,AR,CA,CO,FL,GA,IL,IN,KS,KY,LA,MD,MI,MS,MO,NV, NJ,NM,NY,NC,OH,OK,OR,PA,SC,SD,TN,VA,WA 21 - AZ,AR,CA,CO,FL,GA,IL,ME,MD,MN,MS,MO,NC,OH,OK, OR,PA,SC,TN,VA,WI 31 - AL,AR,CA,CT,FL,GA,IL,IN,IA,KY,LA,MD,MA,MI,MN,MS,MO, NH,NJ,NY,NC,OH,OK,OR,PA,SC,TN,TX,VA,WA,WI 28 - AL,AZ,CA,CO,CT,FL,GA,HI,IL,IN,KY,LA,MA,MI,MO,NV,NJ, NY,NC,OH,OR,PA,RI,SC,TN,TX,VA,WA 29 - AL,AZ,CA,CO,CT,DE,FL,GA,HI,IL,IN,KY,LA,MD,MA,MI,MN, MO,NJ,NY,NC,OH,OK,PA,SC,TN,TX,VA,WI 14 - AZ,CT,ID,IL,IN,KY,NJ,OH,OK,OR,PA,RI,TN,WA 29 - AL,AZ,CA,CO,CT,FL,GA,IL,IN,IA,LA,MD,MA,MI,MN,MO, NV,NJ,NY,NC,OH,OR,PA,SC,TN,TX,VA,WA,WI 5 - MN,NE,ND,OK,SD 32 - AL,AK,AZ,CA,CO,CT,FL,GA,IL,IN,KS,KY,MD,MA,MI,MN,MO, MT,NE,NJ,NY,NC,OH,OR,PA,SC,TN,TX,VT,VA,WA,WI 25 - AL,CA,CO,CT,FL,GA,IL,KS,KY,LA,MA,MO,NV,NJ,NM,NY,NC, OH,OK,PA,SC,TN,TX,VA,WA 27 - AL,AZ,CA,CO,CT,FL,GA,IL,IN,IA,KY,ME,MD,MI,MN,MO,NE, NJ,NC,OH,OR,PA,TN,TX,VA,WA,WI
www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:21 AM
Page 17
Company
12/31/08 DPW 000â&#x20AC;&#x2122;s omitted
Group Name
State of Domicile
93 94 95 96
Century-National Insurance Co. Concord General Mutual Insurance Co. Trinity Universal Insurance Co. OneBeacon Insurance Co.
161,406 159,637 156,401 153,157
N/A Concord Unitrin White Mountain
CA NH TX PA
97
Protective Insurance Co.
151,242
Baldwin & Lyons
IN
98 99 100 101 102 103 104 105
Hartford Insurance Co. of IL Fidelity National Insurance Co. Cypress Insurance Co. Merchants Mutual Insurance Co. Builders Mutual Insurance Co. Pacific Specialty Insurance Co. Public Service Mutual Insurance Co. First Colonial Insurance Co.
144,298 142,296 139,637 138,021 136,928 135,050 130,126 118,390
Hartford Fire & Casualty Fidelity Natl. Financial Berkshire Hathaway Merchants Mutual Builders Western Service Contract Public Service Allstate
IL CA CA NY NC CA NY FL
106 Jewelers Mutual Insurance Co.
117,289
N/A
WI
107 108 109 110 111
116,609 116,545 115,768 114,174 111,596
American Financial Mercury General N/A Andover N/A
CA OK WY MA MI
112 Harleysville Preferred Insurance Co 113 Grange Insurance Association 114 Preferred Professional Insurance Co
110,041 109,540 108,894
Harleysville Grange N/A
PA WA NE
115 Farmers Alliance Mutual Insurance Co. 116 Chicago Insurance Co.
105,693 103,396
Alliance Allianz
KS IL
117 118 119 120 121 122 123 124
101,957 101,255 100,747 99,651 96,326 93,110 92,474 90,926
Donegal Fairfax Financial Van Enterprises Cumberland IAT Reins Columbia Fincor Holdings Federated Mutual
PA NY KS NJ NC MO MI MN
125 Toyota Motor Insurance Co.
90,700
N/A
IA
126 IMT Insurance Co. Mutual 127 Harco National Insurance Co.
89,804 88,967
IMT Mutual Holding IAT Reins
IA IL
128 Darwin National Assurance Co.
85,574
Allied World Assur. Holding DE
129 Middlesex Insurance Co. 130 AIG Premier Insurance Co. 131 American Hardware Mutual Insurance Co.
84,259 83,715 83,062
Sentry American International Motorists Mutual
WI PA OH
132 Harford Mutual Insurance Co. 133 Farmland Mutual Insurance Co.
77,359 74,882
Harford Nationwide
MD IA
134 Capitol Indemnity Corp.
73,876
Alleghany
WI
135 136 137 138 139 140 141 142 143 144 145 146 147 148 149
72,396 72,194 70,472 68,797 62,652 57,090 56,782 56,231 53,558 43,608 41,419 39,350 38,521 31,353 29,209
Ace Ltd. White Mountain State Auto Mutual Western Reserve AAA Mid Atlantic Pennsylvania National Central Mutual WR Berkley Lititz Mutual Berkshire Hathaway American International Delek Old Republic Ace Ltd Bankamerica
PA PA SD OH PA PA OH DE PA NE IN TX IL PA SC
Republic Indemnity Co. of America American Mercury Insurance Co. Mountain West Farm Bureau Mutual Ins. Co. Cambridge Mutual Fire Insurance Co. Daimlerchrysler Insurance Co.
Atlantic States Insurance Co. Seneca Insurance Co. Inc. Old United Casualty Co. Cumberland Mutual Fire Insurance Co. Occidental Fire & Casualty Co. of NC Columbia Mutual Insurance Co. MHA Insurance Co. Federated Service Insurance Co.
Insurance Co. of North America Pennsylvania General Insurance Co. Milbank Insurance Co. Lightning Rod Mutual Insurance Co. Keystone Insurance Co. Penn National Security Insurance Co. All America Insurance Co. Berkley Regional Insurance Co. Lititz Mutual Insurance Co. Cornhusker Casualty Co. Yosemite Insurance Co. Republic Underwriters Insurance Co. Bituminous Fire & Marine Insurance Co. Bankers Standard Insurance Co. General Fidelity Insurance Co.
Number/States with Greater Than $1 Million DPW 12/31/2008 4 - AZ,CA,IL,NV 3 - ME,NH,VT 8 - AL,AR,ID,LA,MT,OK,TX,UT 30 - AZ,AR,CA,CO,DC,FL,IL,IN,IA,KS,KY,LA,MA,MI,MN,MS,MO, MT,NJ,NM,NY,OH,OK,OR,PA,SC,TX,VA,WA,WI 21 - AZ,CA,CO,FL,GA,IL,IN,MD,MI,MO,NJ,NY,NC,OH,OR,PA, TN,TX,UT,WA,WI 4 - CT,IL,NY,PA 15 - AZ,CA,FL,HI,LA,MS,MO,NE,NV,NY,PA,SC,TX,VA,WA 3 - AR,CA,GA 9 - MA,MI,NH,NJ,NY,OH,PA,RI,VT 4 - NC,SC,TN,VA 4 - AZ,CA,GA,TX 13 - AZ,CA,CO,CT,IL,MA,NJ,NY,OR,PA,RI,TX,WA 30 - AZ,AR,CO,FL,GA,IL,IN,IA,KS,KY,LA,MD,MA,MI,MN,MO,NE, NV,NJ,NM,NC,OH,OK,PA,SC,TN,TX,UT,VA,WA 30 - AL,AZ,AR,CA,CO,CT,FL,GA,HI,IL,LA,MD,MA,MI,MN,MO, NV,NJ,NM,NY,NC,OH,OK,PA,SC,TN,TX,VA,WA,WI 10 - AK,AZ,CA,CO,GA,IL,NV,NM,OH,UT 6 - CA,CO,FL,GA,OK,TX 2 - MT,WY 7 - CT,IL,ME,MA,NH,NY,RI 28 - AL,CA,CO,FL,GA,IL,IN,KS,LA,MD,MA,MI,MN,MS,MO,NE, NJ,NM,NY,NC,OH,OK,PA,SC,TN,TX,VA,WA 9 - CT,DE,MD,MA,NJ,NC,PA,TN,VA 6 - CA,CO,ID,OR,WA,WY 20 - CA,CO,FL,IL,IN,IA,KS,KY,LA,MD,MO,MT,NE,NJ,NY,OH, PA,TX,WA,WI 9 - CO,ID,KS,MO,MT,NE,ND,OK,SD 24 - AZ,CA,CO,CT,DC,FL,GA,HI,IL,IN,IA,MD,MA,MI,MO,NJ,NY, NC,OH,PA,TN,TX,VA,WA 7 - DE,GA,MD,NY,OH,PA,VA 17 - AZ,CA,CO,CT,FL,IL,KY,MD,MA,MI,NV,NJ,NY,NC,OH,PA,VA 7 - AZ,CA,FL,KS,MI,MO,TX 4 - DE,MD,NJ,PA 17 - AL,AZ,CA,FL,GA,IL,IN,KY,LA,MO,NV,NJ,OH,SC,TN,TX,VA 8 - AR,IL,IA,KS,MO,NE,OK,SD 8 - IA,KY,MI,MN,ND,OH,SD,WI 28 - AL,AR,CA,CO,GA,IL,IN,IA,KS,KY,MI,MN,MO,NE,NV,NM,NC, ND,OH,OK,PA,SC,SD,TN,TX,VA,WA,WI 19 - AZ,AR,CA,CO,FL,IN,KY,MD,MA,MI,MS,NV,NJ,OK,OR,PA, TN,VA,WA 5 - IL,IA,NE,SD,WI 25 - AZ,CA,CT,FL,GA,IL,IN,LA,MI,MS,MO,NE,NV,NJ,NY,NC,ND, OH,OK,OR,PA,TN,UT,WA,WI 21 - AZ,CO,CT,FL,GA,IL,MD,MA,MI,MN,NJ,NY,NC,OH,OK,OR, PA,TX,VA,WA,WI 15 - CA,CO,CT,FL,GA,IL,IN,KS,MN,MO,NJ,OH,TN,TX,WI 16 - CA,CT,FL,ME,MI,MN,MO,MT,NV,NJ,NY,OH,PA,VA,WA,WY 19 - AZ,CA,CO,ID,IL,IA,KY,MA,MI,MN,NV,NJ,NY,OH,OR,PA, TX,WA,WI 7 - DE,DC,MD,NC,PA,TN,VA 24 - AL,AR,GA,ID,IL,IN,IA,KS,KY,MN,MS,MO,MT,NE,NC,ND,OH, OK,SD,TN,TX,WA,WI,WY 20 - AZ,CA,CO,GA,IL,IN,KY,MI,MN,MO,MT,NV,ND,OH,OK,OR, PA,SD,WA,WI 5 - CA,FL,MA,NY,WA 8 - CA,CT,MA,NH,NM,NY,RI,TX 6 - AZ,IN,MN,ND,SD,UT 2 - IN,OH 5 - DE,MD,NJ,PA,VA 8 - AL,DE,MD,NC,PA,SC,TN,VA 14 - AZ,CT,GA,IL,IN,MA,NJ,NY,NC,OH,OK,SC,TN,VA 8 - FL,GA,ME,NV,NY,NC,TN,TX 9 - DE,KS,MD,MO,NC,PA,SC,VA,WV 10 - AK,CO,ID,IA,KS,NE,NC,SC,VA,WA 15 - AZ,CA,CO,FL,GA,IL,IN,KY,NC,OH,PA,SC,TN,VA,WI 5 - LA,MS,NM,OK,TX 12 - FL,IL,IA,MI,MO,NE,NC,OK,PA,TX,VA,WI 7 - CT,FL,GA,IL,NJ,NY,PA 11 - AL,FL,GA,IN,LA,MO,NJ,NM,NY,OH,WA
Data Source: The National Association of Insurance Commissioners, Kansas City, Mo., by permission. Information derived from a Highline Data product. The NAIC and Highline Data do not endorse any analysis or conclusion based upon the use of its data. www.insurancejournal.com
May 4, 2009 INSURANCE JOURNAL-NATIONAL REGION | N17
05.04.09 NATIONAL.qxd
4/29/09
9:22 AM
Page 18
National Coverage News & Markets Risk Managers Report ‘Soft Landing’ for Market Pricing
I
nsurance premiums for businesses continued to slide towards a “soft landing” rather than an abrupt reversal resulting in rate increases, according to risk managers. While banks and other financial institutions bought directors and officers (D&O) insurance at substantially higher rates, the rest of the commercial insurance market in the first three months of 2009 saw a continuing trend of little or no change in rates, according to RIMS Benchmark Survey, a survey of policy renewal prices as reported by North American corporate risk managers. General liability premiums fell 3.8 percent for policies renewing during the first quarter of 2009, as compared to a 5.9 percent decline in the fourth quarter of 2008, risk managers reported. The average workers’ compensation premium fell 2.5 percent, which is similar to price decreases in the past several quarters. The average property renewal was flat for the first quarter as compared to a decline of
3.8 percent in the fourth quarter of 2008, the survey revealed. Also noted was a wide range of changes in recent renewal premiums for individual property risks: Premium changes ranged from a decrease of 11 percent to an increase of 14 percent. Risk managers said the D&O market continued to be split between financial institution (FI) risks and all other (commercial) risks. Overall, the average D&O premium increased by 3 percent, but the increase was driven entirely by financial companies. Excluding FI firms, the average renewal was down 3 percent, the survey found. Higher FI premiums are the outcome of massive losses from the meltdown of the subprime mortgage market and the ensuing credit crisis. By comparison, overall D&O rates fell 1.2 percent in the fo urth quarter of 2008 and fell 4.5 percent during that period excluding FI firms. “Even though the credit crisis and the
N18 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
continued on page N20
Bad Economy Not Impacting Essential Insurance Coverages
M
any Americans have taken steps to reduce personal insurance costs in response to the economic downturn, but a new industry study suggests that maintaining essential auto and homeowners coverage remains a priority for the most consumers. Twenty-eight percent of those with auto insurance coverage surveyed by the Insurance Research Council (IRC) reported shopping for lower rates when they normally would not have done so. Among those with auto or homeowners insurance, 15 percent said they had increased their insurance deductibles or reduced the amount of coverage to reduce premium costs. Most Americans, however, have maintained essential homeowners and auto insurance coverage despite the challenges posed by the ecocontinued on the bottom of page N20
www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:22 AM
Page 19
Vacant Home?
Yeah, we write that. American Modern gives you the products that ďŹ ll your niche needs â&#x20AC;&#x201C; with the underwriting appetite that lets you take full advantage of them. Like competitively-priced policies on vacant homes valued to $500,000.
You can write it, too.
Find out how you can begin writing our slate of niche products.
Go to www.amig.com/writeit or call 800-759-9008. Dial 9 then ext. 2744. MANUFACTURED HOME s MOTORCYCLE !46 s BOAT s PERSONAL WATERCRAFT s SNOWMOBILE s MOTOR HOME s COLLECTOR CAR s DWELLING s TRAVEL TRAILER Coverages underwritten by the companies of American Modern Insurance Group, which includes American Modern Home Insurance Company
05.04.09 NATIONAL.qxd
4/29/09
9:22 AM
Page 20
Insurance for Security Officer, Investigation, Background Screening and Electronic Alarm Firms Marc Katz I Principal, Open Brokerage mkatz@mechanicgroup.com 800 -214- 0207 Ext.105
We will work for your business. Find out why hundreds of retail agencies depend on us for comprehensive insurance products, expertise and competitive pricing. We offer Broad Form programs with a wide range of coverage options: Commercial Liability Workers Compensation Commercial Umbrella/Excess Liability Third Party Fidelity (Employee Dishonesty)
We work for it. Our exclusive programs utilize “A” or better A.M. Best rated insurers and are available in all 50 states.
www.mechanicgroup.com
N20 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
National Coverage News & Markets Risk Managers, continued from page N18
global recession have had a negative impact on insurers’ top and bottom lines, so far financial institution D&O is the only segment tracked by RIMS Benchmark Survey to respond with higher premiums,” said Dave Bradford, Advisen’s executive vice president and editor-in-chief of RIMS Benchmark Survey. “Insurers struggle against falling rates, increased losses in some lines, and sharply lower investment income due to the credit crisis, but the commercial insurance industry is still overcapitalized.” RIMS Benchmark Survey is produced by Advisen Ltd., which collects and analyzes the data and provides the technology infrastructure for the survey’s online services. IJ
Bad Economy, continued from page N18
nomic downturn, according to the study. Nine percent of those with at least one ho usehold vehicle reported canceling or not renewing coverage for a household vehicle in response to the economic downturn. However, almost one-third (31 percent) of those canceling auto insurance coverage also reported selling a vehicle as a way to save money, so many of those vehicles for which insurance coverage was canceled were also likely sold. Five percent of homeowners and 14 percent of renters reported canceling homeowners or renters insurance coverage. The study also reported on the frequency with which consumers have taken other steps in response to the downturn. For example, 65 percent reported greatly reducing their expenditures on entertainment. Thirty-seven percent reported postponing the purchase of a major household appliance. “These findings confirm that most Americans recognize the importance of maintaining essential insurance coverage on their homes and cars,” said Elizabeth A. Sprinkel, senior vice president of the IRC. “But they also show that Americans are willing to shop and reevaluate their insurance needs in order to reduce insurance costs.” The results of the IRC’s report, “Public Attitude Monitor 2009, Consumer Response to the Economic Downturn,” are based on 1,000 telephone interviews conducted with adults age 18 and older in December 2008 by GfK Custom Research North America. Copies of the study are available for $65 each in the U.S. at: www.ircweb.org. IJ www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:22 AM
Page 21
The Insurance Professional’s Guide to Workers’ Compensation: From History History through through Audit Audit From Author: Christopher J. Boggs, CPCU, ARM, ALCM, LPCS, AAI, APA Price: $55.00 for paperback and $49.95 for a pdf download Available at: http://ijmag.com/wcbook
Key Take-Aways
1 2 3 4
Legal and contractual concepts surrounding workers’ compensation presented in simple, non-legal terms.
Provides selected statutory information for every state.
Allows the reader to understand the framework on which workers’ compensation coverage is built.
Designed to combine statutes, common law, contracts and the human element of workers’ compensation into one resource.
I've worked in the insurance industry for almost 50 years, including periods as an underwriter, educator, agent and consultant. Of all the textbooks, reference sources, etc. that I have read on the subject of WC, these articles are by far the best I have ever encountered. Congratulations and thanks for a job well done!! Russ Taylor Risk Management Tactix Spring, TX
"A must read for everyone wishing to truly understand workers' compensation sales. Chris's writing style makes complex issues easy to understand even for beginners. This book should be the standard for our industry." Chris Burand President – Burand & Associates, LLC www.burand-associates.com Excellent book - even for those of us whose primary occupation is not in the insurance industry. This book explains insurance terminology in a way that anyone can understand. I may not understand all of the finer points of worker's compensation, but I now know what questions I need to ask! Ricky Horton, CMA Vice-President of Finance McCombs Steel Company, Inc
05.04.09 NATIONAL.qxd
4/29/09
9:22 AM
Page 22
Closer Look Agency Technology
Social Networking in an Insurance World Web 2.0 Tools Enhance the Face-to-Face Interactions in the Industry By Nicole Bissett
I
nsurance firms that have used the tools with their agents and prospective clients. of Web 2.0 appear to be won over for They are experimenting with Twitter to keep good, and have little to say that is negatheir agents up-to-date with what’s happentive. ing in the markets. Snyder says social McAuley, Woods & Associates, a privately networking tools held boutique wholesale brokerage based in only enhance facePalm Beach, Fla., is one company that has to-face interaction benefitted. McAuley, Woods & Associates, between customers. which uses a select group of retail agents “You can start a conthroughout the United States, began using a versation and relawiki, a internal collection of Web pages that tionship in person allows anyone in the company to contribute and then continue it content,just nine months ago. in the community So far reviews from the McAuley, Woods & getting input from Associates’ employees are positive. everyone,” he said. Jim Snyder, a property/casualty broker who heads up marketing efforts for McAuley, Community Woods & Associates says, the brokerage is Benefits currently putting all of its corporate knowlMike Wise, the edge into the wiki. “We have our corporate vice president of IdeaStar, also believes agents processes there as well as training videos and will benefit from these tools. marketing information for all of our carriers,” “My opinion is the social web is really putSnyder says. The wiki, Snyder says, can be ting the agents back in the driver’s seat after updated by anyone in the company. Everyone being sort of disenfranchised a little bit o ver contributes by entering their knowledge in to the past few years because of search engines,” the firm’s wiki. Wise said. “Everybody’s focused on going and Their main use for it is to mark et, and to doing a search on a particular insurance share their success stories. They also receive product or need. The big direct consumer updates from underwriters on a daily basis marketers were dominating the search concerning their appetites and where they are results and the agents were open and closed. The brokerkind of left out when it came age also uses the wiki for ‘The social web to all that traffic.” forums and blogs to share IdeaStar, based in information with each other. is really putting Cleveland, Ohio, provides Snyder says it is now faster the agents back Web-based software applicaand easier to access informations to help customers create tion when answering quesin the driver’s online initiatives. Wise says tions over the phone. “We can seat ...’ Web 2.0 tools such as Twitter, look into the wiki and see blogs, podcasting, videocastwhat we’ve done in the past,” ing, YouTube, and others, are excellent from a he said. “It helps us market faster and give prospecting standpoint. them answers quicker.” These tools are appreciated by other Snyder believes the wiki will be an excelexperts in the field of technology as w ell. lent teaching tool for new employees. He also Rick Morgan, a board member for the believes the firm’s underwriting guides will Agents Council for Technology (ACT), who become more robust as they build the library has four decades of experience in technology, of risks and how to place them. marketing, and publishing in the independThe firm also uses LinkedIn to keep up N22 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
ent insurance agency system, says these tools are easy to use, and very inexpensive. He believes in the concept of social networking, not just because the tools are inexpensive. “When you engage in the social networking world, you build relationships, and relationships are important,” Morgan said. “In the agency world of sales, service, and marketing, what they do in small, home-town, Main Street businesses, is they depend a great deal on relationships and on trust. P art of what social networking does is help in that area. It enables, in a digital way, relationship.” Morgan’s message is that social networking is not a fad; it is a way of tapping in to a core, human desire to belong to a community. Downsides So with all the benefits of Web 2.0, is there a downside? As with anything, Snyder believes there are some concerns. Loss of control and mis-information are always possible contingencies. “For our internal wiki, if you have rogue employees that deliberately want to try and put false information in, they can certainly do it,” he said. Future revenue possibilities can’t yet be determined from the use of these tools. E ven so, Snyder believes they increase the company’s marketing efficiency. “We’re looking for ways to open this up to o ur retailers and underwriters so we can all communicate as one team in the future,” he said. “This is a bit far off since there are many issues to consider, but it is my vision to help make our business more transparent to our customers.” IJ www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:23 AM
Page 23
Social Media Marketing for Insurance Professionals Live Webcast: June 16, 2009 10AM Pacific / 1PM Eastern with guest presenter Lorrie Thomas What you must know before you take action Techniques for employing social media as a marketing arketing tool toool Specific steps for Insurance professionals to develop veloop a
successful social media strategy This power-packed webinar will leave you with ann edia ed understanding of the breadth and depth of social m media as a low-cost (or no-cost!) marketing tool.
Early Bird Exclusive Offer - Save $50! Hurry and register by June 1, 2009 and save $50 off the cost of registration!
All registrants will receive: Registration for live webcast on June 16 Access to the webcast archive, so you can watch again MP3 download of the webcast A comprehensive whitepaper, "Social Media
Marketing for Insurance Professionals" authored by Lorrie
Presented By Lorrie Thomas Lorrie is the principal of Web Marketing Therapy, a full-service web marketing agency that helps small businesses get BIG with strategic web marketing. She teaches Web Marketing Applications, Social Media Marketing and Search Engine Marketing Applications classes at UCSB Extension and UC Berkeley Extension. Ms. Thomas was on the founding team at ValueClick Media. She speaks nationally on a number of marketing-related topics and caters her presentations to the business, niche, skill sets and professional concerns of her attendees
Register Now: www.insurancejournal.com/socialmedia/ www insurancejournal com/socialmedia/
05.04.09 NATIONAL.qxd
4/29/09
9:23 AM
Page 24
New Markets The following markets were selected from the MyNewMarkets database of 25,000 coverages and programs. To find additional markets, or to submit markets, go to www.MyNewMarkets.com.
Products Liability for Roller Coasters and Rides Market Detail: MarketScout (www.marketscout.com) offers agents access to products and completed operations coverage for amusement ride manufacturers and importers. In addition to general liability, the insured can purchase protection for discontinued products, excess liability and workers’ compensation. Minimum premiums begin at $20,000 and the insured can apply as high as $10,000 SIR’ s. Available Limits: $1 million to $5 million. Carriers: Unable to disclose. “A++” rated by A.M. Best. Non-admitted. States: All. Contact: John Gaskill at 972-934-4212 or e-mail jgaskill@marketscout.com.
Workers’ Comp Programs Market Detail: Chamber Insurance Agency Services (www.chamberagent.com) makes it easier for agents to find workers’ compensation coverage for hard-to-place risks. This featured program provides access to coverage for accounts with high experience modification factors, multi-state operations and what are usually considered difficult risks. Available Limits: As needed. Carriers: Various carriers. Ratings not provided. Admitted. States: All except where not allowed. Contact: John P. Ferreira at 973-669-2309 or e-mail jpferreira@chamberagent.com.
offered for claims in connection with professional and pollution liability; 4) Coverage for independent contractors; 5) A worldwide coverage territory; 6) “Innocent insured” and mediation credit coverage offered; 7) The availability of an aggregate deductible endorsement; and 8) An available blanket waiver of subrogation. Minimum premiums begin at $2,500 and deductibles begin at $2,500. Available Limits: $500,000 to $10 million. Carriers: Ace, Admiral, AIG, Beazley, CNA, Hiscox, Houston Casualty, Lloyds
rated by A.M. Best. Admitted and nonadmitted. States: Ala., Ariz., Ark., Calif., Colo., Conn., Del., Fla., Ga., Idaho, Ill., Ind., Iowa, Kan., Ky., La., Mich., Minn., Miss., Mo., Mont., Neb., N.H., N.J., N.M., N.Y., N.C., N.D., Ohio, Okla., Ore., Pa., S.C., S.D., Tenn., Texas, Utah, Vt., Va., Wash., W. Va., Wis. and Wyo. Contact: Josh Hancock at 800-977-9884 or email underwriting@transportationrisk.com.
Bringing Market Seekers and Market Providers Together
Market Detail: Professional Program Insurance Brokerage (www.ppibcorp.com) offers professional liability coverage to interpreters and translators. Coverage is offered on a claims made basis and protects against claims alleging errors, omissions or negligent acts arising out of professional interpreting or translating services. Coverage can be included for the applicant, applicants owned company, employees and contractors. The option to include general liability protection is also available. Applications, quotes and purchase requests can all be done online. Minimum premium begins at $275. Available Limits: $250,000 to $1 million. Carriers: Lloyds of London. “A” rated by A.M. Best. Non-admitted. States: All except Alaska and Mississippi. Contact: Susan Preston at 415-475-4300 or e-mail susan@medispa-ins.com.
• Find markets in our database • Promote your markets on our site • Join our community forums • Membership is free! and Navigators. “A” rated by A.M. Best. Admitted and non-admitted. States: All. Contact: Robert J. McIntyre at 610-3373200 or e-mail rmcintyre@apogeeinsgroup.com.
Architects & Engineers Market Detail: Apogee Insurance Group, a Berkshire Hathaway Co. (www.apogeeins group.com) offers a broad architects and engineers program with the following coverage features: 1) Definition of professional service includes engineering, architecture, construction management and environmental consulting; 2) Offerings can include cyber liability, pollution liability and an option for first dollar defense; 3) Bodil y injury and property damage coverage
Interpreters and Translators Professional Liability
Household Goods Truck Cargo
Mortgage Broker/Banker Professional Liability
Market Detail: Transportation Risk Underwriters Inc. (www.transportation risk.com) brings agents a cargo market for all household goods movers. Less than two years experience, no problem. Insureds can also get contingent auto liability, contingent cargo, and commercial general liability for brokers. Deductibles begin at $1,000. Available Limits: $25,000 to $100,000. Carriers: Multiple carriers. “A-” to “A+”
Market Detail: Gresham & Associates (www.greshaminc.com) has facilities for mortgage broker/banker professional liability which includes sub-prime loans and prior acts coverage. Investor required errors and omissions coverage is also available through a Special Mortgage Bankers Bond naming the investor as the loss payee. Minimum premiums begin at $2,500. Available Limits: $1 million to $5 million.
N24 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:23 AM
Page 25
Carriers: Unable to disclose. “A” rated by A.M. Best. Non-admitted. States: All. Contact: Art Hays at 888-473-7444 or email ahays@greshaminc.com.
Fire Protection Contractors Market Detail: McNeil & Co. (www.mcneilandcompany.com) brings agents the FireWatch Program. This is a comprehensive insurance and risk management program offering high quality, specialty insurance products to the complete fire protection market including firms that engage in the sales, service, and installation of fire suppression systems, fire extinguishers, burglar and fire alarm systems, and those involved in selling or distributing fire equipment or emergency apparatus. The program can be tailored to provide an unequaled coverage portfolio.
Available Limits: As needed. Carriers: Arch Insurance Co. “A” rated by A.M. Best. Admitted. States: Alaska, Ariz., Ark., Calif., Colo., Conn., Del., Fla., Ga., Idaho, Ill., Ind., Io wa, Kan., Ky., La., Maine, Md., Mich., Minn., Miss., Mo., Mont., Neb., Nev., N.H., N.J., N.M., N.Y., N.C., N.D., Ohio, Okla., Ore., Pa., R.I., S.C., S.D., Tenn., Texas, Utah, Vt., Va., Wash., W. Va. and Wis. Contact: Shawn Yingling at 717-646-8886 or e-mail syingling@mcneilandcompany.com.
Medical Property Protection Market Detail: RPS of New York (www.rpsins.com) offers agents a property protection program designed specifically for the healthcare industry equipment. The medical diagnostic equipment coverage form is crafted to provide protection for: MRI’s, CAT scanners, X-ray equipment and
other portable diagnostic equipment. Power units and specialized trailers part of mobile units can also be covered. Blanket limits of $250,000 are also available on items such as accounts receivable, EDP (including extra expense), extra expense, food spoilage and contamination, loss data preparation costs, personal property of patients and valuable papers and records. Minimum premiums and deductibles begin at $5,000. Available Limits: $1 million to $100 million. Carriers: Unable to disclose. “A” rated by A.M. Best. Admitted. States: All. Contact: Robert Hecht at 631-969-1900 or e-mail bob_hecht@rpsins.com. IJ Submit your company’s property/casualty markets to the industry’s leading searchable database at www.mynewmarkets.com.
There’s a better way to find Markets. Searching for a Particular Market? Find it here. From Dude Ranches to Pizza Delivery, we have markets covered. Stop Searching and Start Finding. Our database of over 25,000 markets makes it quick and easy to find that obscure market you are searching for. Best of all the service is FREE! So sign up today!
www.insurancejournal.com
May 4, 2009 INSURANCE JOURNAL-NATIONAL REGION | N25
05.04.09 NATIONAL.qxd
4/29/09
9:23 AM
Page 26
Special Report AAMGA Issue
‘Red Flags’ to Watch For When Choosing an MGA Partner in a Bad — and Good — Economy or Market
I
n today’s tough economy and proaround for a long time with a fe w differWhat should agents watch out for longed soft market, some insurance ent markets, then it’s generally one of the when questioning whether an MGA is firms are likely to get into stronger players,” he added. in good financial health or if they are financial trouble. Smaller Donoghue advises agencies to a good firm to partner with? wholesalers and managing always have backups to their priAre there ‘red flags’ to consider? general agencies (MGA) maybe mary markets, Kevin Donoghue: Not havat risk. Their ability to stay especially ing much experience in If they keep afloat with working capital when they are the business is a flag. It’s could be a challenge, says placing surswitching markets, very difficult for an agent Kevin Donoghue, managing plus lines to assess the financial sitit’s an indicator director for Mystic Capital business uation of an MGA or Advisors Group LLC, a New because “anyMGU because financials that they might York-based firm that provides thing can hapare not shared, just as an Kevin Donoghue not be the best financial consulting services to pen.” agency generally doesn’t the retail insurance, wholesale insurance In this interview share their financials. … MGA to be doing and financial services industries. with Insurance Journal’s Check on references business with. Andrea Wells, and experience. Checking If an MGA loses a market or loses key Donoghue outlines a with the markets they insurance lines, the fallout could make it few “red flags” agents should be aware of represent is always good due diligence, if difficult for those groups to stay in busiwhen trying to gauge the health of their they (agents) are not familiar with a cerness, Donoghue says. “But if it’s a sizeable MGA partners. Here’s what he had to say: wholesaler or MGA, or one that’s been continued on page N28
We’ve Been Lending ... Garden City, NY Senior Term Facility Cash Management Remote Deposit
Orlando, FL Senior Term Facility Line of Credit Cash Management
And we haven’t stopped. When successful agencies need capital for agency acquisition and perpetuation, they turn to InsurBanc. Your agency too can count on InsurBanc for all your financial needs. We are fully committed to the insurance industry. Our strength and unmatched expertise make us your most reliable source of capital. • • • •
Checking & Cash Management Online Banking & Remote Deposit Premium Trust Accounts Agency Acquisition & Perpetuation Loans
• • • •
Commercial & Residential Mortgages Equipment Leasing Lines of Credit & Credit Cards Debt Refinancing
(866) 467-2262 agencyfinancing@InsurBanc.com www.InsurBanc.com N26 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:23 AM
Page 27
Special Report AAMGA Issue
50 Reasons Why Retail Agents Choose Managing General Agency Partners In an Insurance Journal online survey, 304 independent agents wrote criteria on how they choose their MGA partners. Here’s what some of those agents had to say: 1. As a large broker, this is decided based on relationships, successes, volumes, commissions levels, service. In other words we are dictated by volume. 2. Service, service, service, markets, price, service. 3. Personal relationships.
4.Must know their products and give quick turnaround on quotes. 5. It’s very important to work with someone who will walk me through situations I may be unfamiliar with. 6. Basically we have two MGAs with relationships but will use others for exclusive specialty programs. Sometimes response time can be an issue as to who we write the business with. 7. If they have been in business a long time and have markets that we know are competitive and cutting edge, we give them a chance. If they do their job quickly and accur ately, we continue to use them. If their underwriter s are fickle and sometimes incoherent, we go elsewhere. We prefer to not swim upstream. Any difficulty in dealing with them is the quickest way for them to lose our interest. 8. What other agents say about the MGA and how they are treated and services offered. 9. Contract with known brokers. Specialty programs influence use. When known agents move, we will follow them to their new MGA.
18. Dedicated underwriters is crucial. 19. The more the MGA can automate their services including upload and download the more we would want to work with them. 20. Ease of submission. Sense that MGA understands nature of risk and will respond accordingly. 21. Financial ratings of companies used, expertise and knowledge of products/markets by brokers/assistants, ease of doing business with my CSRs after I have bound the business as the producer. 22. I like MGAs that are in the Midwest because that’s where my agency is. I feel that puts me in touch with an underwriter who may be feeling the same issues as my customers. 23. I consider those who can provide good service, quick response time and a good selection of companies. 24. Expertise and ease of doing business. 25. The three things all agents want: competitive markets, ease of doing business and the highest rate of commission possible.
26. I choose them based on commitment to service, response time and access to markets. 27 We prefer to limit the number of E&S brokers and MGA/program adminstrators with whom we work; believing that carefully selected relationships will be more rewarding in the long term.
11. Their honesty, expertise, quickness, and quality of the carriers they offer. Their pleasantness in personality is also always preferred.
28. Experience and expertise are very important. They need to have good markets and they need to respond quickly.
12. I work with MGAs who respond quickly to our requests and try to earn our business by strong communication.
29. Most important to me is the ease to work with a particular MGA.
13. Reputation and how quickly they respond to inquiries along with market availability. Customer service has been decreasing over the years.
30. Here’s the priority list: 1) availablity of markets; 2) reliable response; 3) expertise; 4) price; 5) compensation. Everything else is a consideration, but not critical.
14. To place business that can’t be written in the standar d market. Most of our MGAs have been around for many years. We only pursue new MGA relationships to gain a market for placement.
31. The relationship with a wholesaler/MGA is dependent on the carriers they represent as well as the responsiveness of their organization.
15. Continuing to place additional business with an MGA does depend on the relationships and service that are given.
32. We go to an MGA because we have a client with a need that our markets cannot handle.
16. Length of time in market. Reputation. Good reports from other agents that use them. Good working relationship with the underwriter staff.
33. Consistent quality level of service is most important.
www.insurancejournal.com
38. Three reasons: expertise, product or price. 39. I choose them via peer referrals. I stay with them according to the response time. 40. Service, reputation and recommendation of other agents.
41. I only want to work with a couple. We receive tons of e-mail, mail and advertising, but I tend to stay with MGAs I have used in the past. 42. We select our wholesalers based upon their expertise, references and our employees’ past working experiences with a wholesaler or MGA.
10. Early response to my needs extremely important. In the future being able to quote online with MGAs will become more and more important.
17. Most important factors are the ability to have the most attractive markets for our clients, in conjunction with providing top level service and to believe that the number one priority is taking care of the client.
37. Recommendation of peers is very important and the input of company reps who pass along comments and/info from multiple sources.
34. Service, response time and and a competitive premium are a must. 35. Ease of doing business, service, and financing. 36. We discuss with similar agencies outside our marketing territory and also evaluate their market representation.
43. Met personnel at convention or conference, gained insight to their markets and experience. Tried and liked. 44. Print ads. 45. I work primarily with construction related accounts so even in the soft market it is important to work with brokers and MGAs who know the markets, have good relationships with the companies and understand the need for a timely response to all requests. Those that can do this will keep our business even when their price is slig htly higher. 46. In my experience, over many years, wholesalers make a lot of promises in their ads that they will respond quickly to quote requests but for the most part they do not. Their underwriters are overwhelmed and do not respond to newly appointed producers. This is counterproductive and I don’t have time to deal with them. M y quote requests die on their desks.
47. We work with the brokers who have expertise in a niche and expect quick response and results. 48. I look for a firm who has good relationships with their carriers and can provide expertise when it comes to questions regarding the quotes. I also look for a g ood response time for new business, renewals and for everyday service problems. 49. I appreciate brokers that take the time to help me understand the some of the peculiarities of a particular coverage form or company’s way of doing business. 50. Choice. Variety. Access. Today, the little guy can’t obtain many appointments by himself/herself. Agents must band together to meet quotas via MGAs. IJ
May 4, 2009 INSURANCE JOURNAL-NATIONAL REGION | N27
05.04.09 NATIONAL.qxd
4/29/09
9:23 AM
Page 28
Special Report AAMGA Issue Red Flags, continued from page N26
When a wholesaler or MGA is having tain MGA and they want to write with financial difficulties, what happens? Is them. … the department of insurance involved? Ask for a company referral. Say XYZ Donoghue: A lot of times when they get in managing general agency underwrites on trouble they sell themselves. They try to get behalf of the Lexington. Don’t be hesitant out of trouble via sale. If there’s been a misto ask for a reference from Lexington. appropriation of funds, then the insurance If an agent is talking to an MGA and that department would definitely be alerted to MGA tells them that they represent XYZ (carrier), a follow up question is, “How long it. And then there’s just that gray area where have you represented them?” And if the they are not able to sell answer is a year or two, or they haven’t found the the agent should find out sale so they are kind of who they represented With the times, using fiduciary funds to before that and how long and the soft maroperate their business, they represented them. having yet been caught And here’s the point, if ket, if you get into to playing the float. they represent a company financial hardships due So sometimes it’s difficult that they have only represented for a few years, there’s more pres- to know who’s in solid financial shape and who’s and did the same previsure to do somenot. ous to that, it’s a bad business practice because thing that is probaGiven the current they are probably burnbly inappropriate. financial crisis and ing markets. That’s a soft market, and huge red flag. heightened pressure to increase revWe look at that when we look at the enues, is it more likely for someone to value of an MGA. If they keep switching be dishonest now than in the past? markets, it’s an indicator that they might Donoghue: I don’t know that it’s more likely not be the best MGA to be doing business for someone to be dishonest if the y weren’t with. It certainly begs the question, “Why dishonest to begin with. It’s almost like are you changing markets?” “what cloth are you cut out of ?” With the times, and the soft market, if you get into Any examples of failed companies you financial hardships there’s more pressure to can share? do something that is probably inappropriate. Donoghue: None that have been made public But for the most part, in insurance, y ou are but we work with some that have been in still dealing with the 90 percent pl us that trouble and they needed to secure financare honest folks but there’s 10 percent out ing, working capital to stay afloat. None there that give the rest a bad name. that have gone out of business, but in the past we have seen situations where you If an MGA or even a retail agency is have unscrupulous individuals that misaphaving financial difficulty, what propriate funds, on both the retail side and chance do the owners have of securing the MGA side. capital to help given today’s credit It’s always important to do your due dilimarkets? gence on a group before starting to write Donoghue: Well there are good operations out with them. It’s always good to know that there that lend. So to the extent that the y your client, your insured, is actually in are in trust and they have solid business place with the insurance company. The practices and they just need working capiMGA may have been paid but you always tal, there’s potential that they can get there. want to make sure that that payment was If they need money tomorrow, they are remitted on to the company and your poligoing to have a difficult time finding it. cy is in force. But if they are looking ahead and saying “I N28 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:23 AM
Page 29
might need a working capital loan in 90 days” and plan ahead, I think some of the banks out there, InsurBanc being one of them, could try to see if they could bridge the gap. On the retail side, another bank o ut there, Westfield Bank in Ohio, lends to agencies. There are groups out there that will lend to an agency that will make it a little easier than going through a traditional banking facility.
But for the most part, as long as the agent verifies that the underlying insurance is in place and it’s with a credible company, the agent should be in good shape. They have done their job. They have maintained the confidence of their client to the extent that there is an intermediary that w ent
under during the course of business. To the extent that agents don’t do due diligence, and they haphazardly place risk with groups that they are unfamiliar with, then they would have exposure. … It’s always important to do some ba ckground on the owners and their experience. IJ
Are you seeing an uptick of firms looking for capital these days? Donoghue: Yes, in the last couple of years I think there’s been somewhat of an uptick just because revenues are soft and people haven’t maybe downsized their staff appropriately. But lately there seems to be less softening going on. If anything it seems to be bottoming out so that could be helpful. So to the extent that they have right-sized themselves right now they might benefit from an uptick in pricing. If an MGA did go under, closed its doors, or was selling, how should the clients be handled? Would the MGA look for another firm to buy the book? Donoghue: Ideally they would. So to the extent that they have the ability to sell, they are not financially impaired to where a sale price would be less than the debt they are in, they can generally find an avenue to sell and maybe make some money on it. If an MGA goes under, it’s not necessarily the end of the world as long as that underlying insurance has been placed with a company. You know, it’s when they went under and didn’t place the coverage (that’s a problem). For the most part, the underlying insured shouldn’t be at risk if the policy was placed and underwritten properly. If the MGA fails the policy is still in force. If an MGA were to fail, how might the end customer view the retail agent who placed the account? Donoghue: I think anytime you have a change in a market, the underlying insured is going to wonder why, so it could look bad on the agent. www.insurancejournal.com
®
Agency Ideas SALES & MARKETING IDEAS FOR P&C PROFESSIONALS
AGENCY IDEAS® NEWSLETTER Inside each issue of this popular publication, you’ll find fresh ways to sell more personal and commercial lines, to advertise, cross-sell, use the Web, and more. Enjoy password access to our Web-based Subscribers-Only Area along with your print subscription. Download tons of pre-designed sales tools based on the newsletter’s original ideas. Published by Alan Shulman, CPCU since 1990. Visit us online for a sample issue and to discover our other tools including the Illustrative Insurance Sales Letter series.
VISIT OUR SITE • DOWNLOAD A FREE SAMPLE ISSUE.
WWW.AGENCYIDEAS.COM • 1-800-724-1435 May 4, 2009 INSURANCE JOURNAL-NATIONAL REGION | N29
05.04.09 NEW Premium Finance Directory.qxd
4/28/09
3:03 PM
Page 30
W
elcome to Insurance Journal’s 2009 Premium Finance Directory, a comprehensive listing of premium finance companies able to assist agents and brokers with their clients’ financing needs. All company information listed in this directory w as directly submitted to Insurance Journal. To be listed in future editions o f Insurance Journal’s Premium Finance Directory, or any other directory, contact Kristine Honey at: khoney@insurancejournal.com. We hope you find this directory to be a v aluable resource when searching for financing options for y our clients. Feel free to send us comments and suggestions on how we might improve this directory, or for additional help, e-mail: editorial@insurancejournal.com.
Acuret Premium Finance
AFS/IBEX Financial Services, Inc.
All Island Credit Corp.
7050 Woodbine Ave., Ste. 401, Markham ON L3R 4G8 Canada Phone: (905) 886-1674, Fax: (905) 886-7855 Email: service@acuretfinance.com www.acuretfinance.com
750 N St. Paul, Ste. 1500, Dallas, TX 75201 Phone: (800) 299-5626, Fax: (214) 954-0537 Email: service@afsibex.com www.afsibex.com
534 Broad Hollow Rd., Melville, NY 11747 Phone: (631) 777-1377, Fax: (631) 777-1388 Email: info@allislandcredit.com www.allislandcredit.com
· High tech, high touch approach to premium financing · Professional, knowledgeable, and friendly customer service personnel located in Dallas, TX and Newport Beach, CA · Offering creative solutions and flexibility for all your commercial financing needs
· Outstanding Customer Service · Flexibility · Multiple Options for Quoting
· Finance commercial lines, personal lines, including facility · Available through select insurance brokers in Ontario · Interactive website allows for online quotes
Agents & Brokers Premium Finance Company AFCO 310 Grant St., Ste. 1600, Pittsburgh, PA 15219 Phone: (412) 402-3853, Fax: (412) 402-3048 Email: promptservice@afco.com www.afco.com ; www.cafo.com · Cananwill has joined forces with AFCO to create one strong team · We offer Expertise, Capacity, Flexibility in premium financing across North America · Currently, Chapter 11 financing offers great value-added to your clients
P.O. Box 4312, Woodland Hills, CA 91365-4312 Phone: (888) 875-4000, Fax: (818) 598-2296 Email: russ@abpfc.com www.abpfc.com · Website allows payments, cancellation status, renewal dates, pay-by-check, ach, etc. · Commercial Premium Financing of Property & Casualty Insurance – Nationwide · On-Line Anytime
N30 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
Aviation Premium Finance, LLC P.O. Box 18067, Kansas City, MO 64133 Phone: (877) 353-1047, Fax: (816) 353-1048 Email: kw@aviationpremiumfinance.com www.aviationpremiumfinance.com · APF provides aviation insurance buyers with payment options for their annual insurance premiums. · Customers traditionally put 20% do wn and then make 9 monthly payments. · Our goal is to mak e aviation affordable for everyone!
www.insurancejournal.com
05.04.09 NEW Premium Finance Directory.qxd
4/28/09
12:38 PM
Page 31
Premium Finance Directory Birch Financial, Inc.
COST Financial Group, Inc.
20946 Devonshire St., Ste. 200 Chatsworth, CA 91311 Phone: (818) 772-4244, Fax: (818) 772-2221 Email: info@birchfinancial.net www.birchfinancial.net
784 Wall St., Ste. 110, O’Fallon, IL 62269 Phone: (800) 844-2678, Fax: (618) 206-3223 Email: daveg@costfinancial.com www.costfinancial.com
· Finance Commercial Lines for the Landscape Industry · Serving California, Arizona and Nevada · Interactive website allows for confirmation of payments, cancellation status, renewal dates, etc.
Budget Installment Corp (BIC) A Webster Bank Company 1050 Franklin Ave., Garden City, NY 11530 Phone: (800) 557-3000, Fax: (877) 678-2235 Email: ahanes@bicfinance.com www.bicfinance.com
FIRST Insurance Funding Corp.
· COST makes it easy for YOU TO OWN your own Premium Finance Company · COST does the set-up, COST runs the back room, YOU EARN ALL THE PROFIT · Let COST’s 20 years experience put the PROFIT from YOUR premium financing IN YOUR POCKET!
Cypress Premium Funding, Inc. 30448 Rancho Viejo Rd., Ste. 100, San Juan Capistrano, CA 92675 Phone: (949) 487-0602, Fax: (949) 487-0640 Email: info@cypressfunding.com www.cypressfunding.com
450 Skokie Blvd, Ste. 1000, Northbrook, IL 60062 Phone: (800) 837-3707, Fax: (800) 837-3709 Email: marketing@firstinsurancefunding.com www.firstinsurancefunding.com · Competitive rates, flexible payment terms, multiple funding and payment options with the only written service guarantee in the industr y. · On-line quoting with secure paperless loan acceptance and funding and on-line, real-time access to accounts. · Professional agency lending program for agency acquisitions, buildings and equipment, lines of credit, perpetuation and producer development.
Focus Finance, LLC · Nationally authorized commercial premium finance provider · BIC's advanced quoting and account management technology includes integration with all AMS systems · Providing exemplary service and excellent rates to your agency and your insureds
Capital Premium Financing 12235 S 800 E, Draper, UT 84020 Phone: (800) 767-0705, Fax: (800) 700-3170 Email: info@capitalpremium.net www.capitalpremium.net · Industry leading Agency Revenue Programs · Highest level of Agent/Client service available in the industry · Local presence, multiple payment options, and online access
ClassicPlan Insurance Premium Financing 13750 Pipeline Ave., Chino, CA 91710 Phone: (800) 347-6481, Fax: (909) 628-5490 Email: info@classicplan.com www.classicplan.com · Commercial & Personal Lines Premium Financing · Internet based point of sale and inquir y system with electronic loan submission · Superior service and technology for our producers
www.insurancejournal.com
· Internet Account Viewing, Quoting, Reporting and On-Line Payments · Immediate Funding · Cancellation Prevention Programs
1300 Sawgrass Corporate Pkwy, Ste. 300 Sunrise, FL 33323 Phone: (800) 432-3072 Ext. 4825 Email: info@focusfinance.net www.focusfinance.net
ETI Premium Finance 2825 N University Dr., Coral Springs, FL 33065 Phone: (800) 995-7001, Fax: (800) 995-7002 Email: info@etifinance.com www.etifinance.com · Free Acord Form Software for Our Customers · All Accounts Called Prior To Cancellation · ETI–AutoPay – Automatic Monthly Payments From Customer’s Checking Account
Express Premium Finance 5601 N Classen Blvd., Oklahoma Cit y, OK 73118 Phone: (800) 728-2902, Fax: (888) 413-8898 Email: info@expresspremium.com www.expresspremium.com
FINCO Premium Finance Company P.O. Box 26009, Greensboro, NC 27420 Phone: (800) 873-4626, Fax: (336) 379-7792 Email: travis@finco.biz www.finco.biz
· Courtesy calls made to Agents prior to every cancellation · Friendly, professional staff of bilingual account specialists · Complete online ser vices include quoting, account inquiry and payment posting
gotoPremiumFinance.com 21820 Burbank Blvd., Ste. 30 0 Woodland Hills, CA 91367 Phone: (888) 875-4000, Fax: (818) 610-2066 Email: information@gotopremiumfinance.com www.gotopremiumfinance.com · Nationwide premium finance provider for agents, MGAs & insurance companies. · Online quoting, e-submission of finance agreements, online payment options, real time account status, scheduled reporting, customized notice delivery & more. · Highly attractive producer compensation programs are available in fee legal states.
· Independently Owned and Operated in North Carolina · Premium Financing available in all 50 St ates · Web based software allows for 24 hour total online access
May 4, 2009 INSURANCE JOURNAL-NATIONAL REGION | N31
05.04.09 NEW Premium Finance Directory.qxd
4/28/09
12:38 PM
Page 32
Premium Finance Directory IUI Premium Financing, Inc.
Imperial A.I. Credit Companies 101 Hudson St., 33rd Fl, J ersey City, NJ 07302 Phone: (877) 902-4242, Fax: (201) 631-5484 Email: marketing@iaicc.net www.iaicc.com · Financing programs customized for the specific needs of your insured. · Branch offices distributed throughout the U.S. & Puerto Rico to provide local, efficient service. · Web based account access, quoting and contract submission. Integration with a wide variety of agency management software. · Partnership that goes way beyond the numbers.
27970 Crown Lake Blvd., Ste. 3 Bonita Springs, FL 34135 Phone: (727) 864-0816, Fax: (727) 867-7087 Email: TCulley1@tampabay.rr.com www.IUIPremiumFinancing.com · Financing Commercial Insurance: Trucking, Property, E&O, etc. · No Waiting for Quotes (instant quotes/contracts) · Competitive Rates: Can meet or beat with commissions available
LG Premium Finance
Imperial Finance & Trading, LLC
Life Endeavors Financial Solutions, LLC
701 Park of Commerce Blvd., Ste. 301 Boca Raton, FL 33487 Phone: (866) 664-9303, Fax: (561) 995-4201 Email: info@imprl.com • dbenaim@imprl.com www.imprl.com
6430 Rockledge Dr., Ste. 500 Bethesda, MD 20817 Phone: (301) 803-7553, Fax: (301) 803-7570 Email: konstantin.zvereff@lefinance.com www.lefinace.com
· The premier provider of premium financing in the U.S. · Explore financial strategies to create w ealth without using money set aside for retirement · Visit Imperial on the Web at www.imprl.com
· Life Insurance Premium Finance Program Administrator · Perfect for Estate Planning and Wealth Management · Designed as a financial Planning tool; lo w loan origination fee, low interest rates and no prepayment penalty
P.O. Box 315, Des Moines, IA 50306-1315 Phone: (800) 247-4190, Fax: (515) 223-0226 Email: Brian@ifcorp.biz www.ifcorp.biz · Completely independent, IFC has no ties to insurance companies, agencies or other financial institutions. · The agent has the option to control an y and all cancellations and reinstatements of policies financed. · Every agent is assigned its o wn personal account rep and when you call IFC during normal business hours you’ll always talk to a real person, not an automated attendant.
8530 La Mesa Blvd., Ste. 208 La Mesa, CA 91941 Phone: (888) 280-0235, Fax: (619) 697-0326 Email: info@financepremium.com www.financepremium.com · We look for ways to say “yes” to financing any commercial account. · Aggressive Cancellation Prevention Program with ALL forms of payment accepted. · Premium Finance Licensing and Third Party Administration available (www.pfcaptive.com).
16438 Vanowen St, Ste 205, Van Nuys, CA 91406 Phone: (800) 452-8505, Fax: (800) 209-0120 Email: info@lgpf.net www.lgpf.net · Better retention & ser vicing of insured resulting in lower cancellation rates · Productivity gains related to streamlined quotation & activation of financing agreements · Superior client ser vices for the agency
Insurance Finance Corp.
Mountain West Premium Finance Group of Companies
Monarch Premium Resources, Inc. 30448 Rancho Viejo Rd., Ste. 100 San Juan Capistrano, CA 92675 Phone: (800) 731-7890 Email: info@MonarchPremium.com www.monarchpremium.com · Exclusive financing arrangements for brokers of Monarch E&S · Interactive Web site for account viewing, reports and On-line payments · Financing Commercial and Personal Lines Insurance Premiums
N32 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
NCMIC Finance Corporation 14001 University Ave., Clive, IA 50325 Phone: 1-(800) 600-9250, Fax: 1-(800) 630-9250 Email: rmiller@ncmic.com www.nfcfinance.com · Custom solutions – even for smaller insureds or niche markets. · Flexible plans that can include reduced do wn payments and extended terms. · State-of-the-art software, immediate funding and web-based account management.
Prem Finance 1230 B.12th St., Far Rockaway, NY 11691 Phone: (718) 301-5940, Fax: (718) 301-5940 Email: lifepremium@gmail.com www.premfinance.com · High commissions for agents and brokers · Completely legal · Backed by a State Charter Bank
Premium Assignment Corporation 3522 Thomasville Rd., Ste. 400 Tallahassee, FL 32309 Phone: (800) 342-0991, Fax: (800) 286-8999 Email: marketing@premiumassignment.com www.premiumassignment.com · Premium Financing Made Easy · Superior Service · Competitive Rates
www.insurancejournal.com
05.04.09 NEW Premium Finance Directory.qxd
4/28/09
12:39 PM
Page 33
Premium Finance Directory
Premium Finance Associates 7603 First Place Dr., B-12, Cleveland, OH 44146 Phone: (866) FRIEND-0 (374-3630) Fax: (866) 839-3090 Email: info@PremFinAssociates.com www.PremiumFinanceAssociates.com
Premium Payment Plan
SIUPREM, Inc.
One Hudson City Centre, Hudson, NY 12534 Phone: (800) 677-3648, Fax: (518) 828-5729 Email: info@prempay.com www.prempay.com
P.O. Box 105611, Atlanta, GA 30348 Phone: 1 (800) 925-2546, Fax: (678) 498-4747 Email: info@siuprem.com www.siuprem.com
· Commercial and Personal Insurance product lines including Assigned Risk · Customizable program support to meet y our agency needs · Full service website allowing for quoting, payment and account view 24/7/365
· Independently owned, full service online premium finance company servicing independent agents for over 40 years. · Industry leading technologies providing real-time data for online policy ser vice by the insured or the agent. · Call or visit us online to learn more about the many more benefits SIUPREM can offer.
· Licensed in all 50 st ates · 24/7 Access to Online Quoting and Viewing system – same day payment posting · Automatic ACH monthly installment withdrawal from insured checking or savings account
Prime Rate Premium Finance Corp.
Premium Finance Brokerage, LLC
· Financing Commercial & Personal Lines Nationwide · 24/7 Web based access · Pre-approval of loans up to $100,000 & no minimum premium.
2012 S Tollgate Rd., Ste. 204, Bel Air, MD 21015 Phone: (866) 381-6501, Fax: (866) 381-6502 Email: tlarsen@premiumfinancebrokerage.com www.premiumfinancebrokerage.com · Guaranteed Lowest Interest Rates · Access to several national premium finance companies through one point of cont act · Flexible payment options, cutting edge technology and a ser vice pledge that’s put in writing
2141 Enterprise Dr., Florence, SC 29501 Phone: (866) 669-0937, Fax: (800) 677-9850 Email: info@primeratepfc.com www.primeratepfc.com
Pro Premium Finance Co., Inc.
Premium Financing Specialists
· Premium Simplicity; most premium finance quotes available within minutes with no financial information required. · Premium Security; we offer national expertise, without compromising the local ser vice you value (PFS has over twenty full service branch offices). · Premium Access; our comprehensive website allows you to access accurate information whenever you need it, but a friendly representative is always just a phone call a way.
www.insurancejournal.com
21535 Hawthorne Blvd., Ste. 275 Torrance, CA 90503 Phone: (800) 393-2012, Fax: (888) 328-6747 Email: contact@sbac-finance.com www.sbac-finance.com · Interactive and user-friendly state of the art website · Producer compensation up to 3% · Flexibility to meet all your financing needs!
Specialty Risk Premium Finance
P.O. Box 817099, Hollywood, FL 33081 Phone: (800) 491-8937, Fax: (866) 632-9776 Email: marketing@pro-premium.com www.pro-premium.com 427 W 12th St., Ste. 100, Kansas City, MO 64105 Phone: (800) 838-2350, Fax: (816) 627-0502 Email: jen.newhouse@premiumfinance.com www.premiumfinance.com
South Bay Acceptance Corp.
· Achieving excellence in the premium finance industry · Interactive web application providing turnkey agency management system · Competitive agent marketing incentives with flexible rate structures
Royal Premium Budget, Inc. 30833 Northwestern Hwy, Ste. 220 Farmington Hills, MI 48334 Phone: (800) 477-7889, Fax: (248) 932-9043 Email: financing@royalpremium.com www.royalpremium.com · Online Payments & Account Status – make payments or review insureds' accounts, including payment history, 24/7. · Same-day turnaround on finance quote requests and quote revisions. · Online Quotes system gives agents the option of producing finance quotes and finance contracts anytime.
7600 Fern Ave., Bldg. 600 Shreveport, LA 71105 Phone: (318) 683-6206, Fax: (318) 683-3846 Email: frances.lee@specialty-risk.com www.specialty-risk.com · 1st Class Ser vice with in house finance through Specialty Risk Associates! · In house finance allows for immediate credit to your broker statement · 24 hour “real time” account access for you and your clients
Standard Funding Corp 335 Crossways Park Dr. Woodbury, NY 11797 Phone: (800) 526-2470, Fax: (800) 203-2547 Email: info@standardfunding.com www.standardfunding.com · Fully automated web-based online services · Personalized customer service & experienced field representatives nationwide · Competitive rates & loan structures
May 4, 2009 INSURANCE JOURNAL-NATIONAL REGION | N33
05.04.09 NEW Premium Finance Directory.qxd
4/28/09
12:39 PM
Page 34
Premium Finance Directory Tepco Premium Finance 1333 S Rustle Rd., Spokane, WA 99224 Phone: (800) 571-0843, Fax: (509) 622-4702 Email: info@tepcofinance.com www.tepcofinance.com · Easy to use online sy stem for quoting & account management · Free online payments · Licensed in 9 western states
TWG Capital 6666 E 75th St., Ste. 50 0, Indianapolis, IN 46250 Phone: (877) TWG-CPTL (894-2785), Fax: (317) 813-1701 Email: sales@twgcapital.com www.TWGcapital.com · Trusted by agents as leading financial solutions provider for 10 years · Providing capital to P&C Agents · Free valuations & customized business solutions
US Premium Finance 1255 Lakes Pkwy, Bldg 200, Ste. 201 Lawrenceville, GA 30043 Phone: 1 (866) 246-9691, Fax: 1 (866) 246-9692 Email: customerservice@uspremiumfinance.com www.USPremiumFinance.com · SERVICE: Creatively Structured Premium Finance Loans. · TECHNOLOGY: User-friendly software, easy access to your customer database any where in the world 24/7. · PRICING / RATES: Flexible, Fair Market Pricing.
UPAC Premium Finance 8245 Nieman Rd., Ste. 100, Lenexa, KS 66214 Phone: (800) 877-7848, Fax: (913) 984-4988 Email: marketing@upac.com www.upac.com · Financing insurance premiums since 1954 nationwide. · Industry-leading web site offering unlimited flexibility and options that will sa ve you time AND money. · Paperless e-commerce, reduced cancels, flexible payment options, endorsements in a just matter of seconds and tot al account management are just some of the benefits you will enjoy. · Agency management system integration for seamless financing. · 10 - Ways for your insureds to pay. · Old-Fashioned Service with Leading-Edge Technology provides you with the one-stop, effortless financing you can count on.
N34 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
www.insurancejournal.com
05.04.09 NATIONAL.qxd
4/29/09
9:24 AM
Page 35
BE HERE...
...NOT HERE
YOU DONâ&#x20AC;&#x2122;T NEED TO TRAVEL TO LEARN Get your questions answered instantly from your desk. Insurance Journal webcasts allow you to interact with the experts in real time. Live and On-Demand Webcasts on www.insurancejournal.com/webcasts
Check out the next webcast TransUnion presents: Protecting Your Portfolio Against Foreclosure and Vacancy-Related Claims Date: May 5, 2009 Time: 10:00AM PT / 1:00PM ET Register at: www.insurancejournal.com/webcasts Are you interested in having your own webcast or custom video? Give us a call: 800-897-9965 ext. 148
05.04.09 NATIONAL.qxd
4/29/09
9:24 AM
Page 36
Idea Exchange Closing Quote
Being Prepared Don’t Lose Sight of the Greater Risk s We Face
Ward
By Richard Ward
N
o one could fail to have noticed that we are in the grip of a recession. With unemployment affecting 2 million in the United Kingdom, interest rates almost at zero and a deflationary en vironment, there is a lot for b usinesses to deal with. While the financial crisis has certainly been front-of-mind for many around the world, it would be disastrous for us to lose sight of the greater risks that we face, particularly as insurers. This has been recognized at the highest le vel during the recent G20 meeting in London when the communiqué agreed by all of the world leaders reaffirmed their commitment to address the threat of climate change. As our understanding of climate change and its impact develops, it is clear that it will have major implications, not only on our environment but also on how our societies and economies operate in the future. Indeed, it is likely climate change will pose a threat to the future security of the world. For example, we could see a time when because of changes in our climate, nations cease fighting over ideology and instead compete for control of natural resources. As a result, the world map could be significantly redrawn as borders are decided on the availability of food, water and oil. Whereas prospectors left their homes centuries ago to search for gold and land, water shortages could force mass migration on a previously unseen scale. Nations could be held to ransom as energy pipelines become crucial bargaining tools in world politics and finally the exotic foods that we have all come to know and love could become a thing of the past. Climate Change and Security Our new report on Climate Change and Security, produced in conjunction with the International Institute for Strategic Studies, examines how climate change will affect global security by exploring four key interrelated issues —
N36 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009
water scarcity, food supply, energy security and demographic pressures. To read more, visit our Web site at www.lloyds.com/360. We are also investing in research to better understand the current threat of political risk. The recession is lik ely to lead to greater instability across the world — the increased incidences of piracy are just one recent manifestation of this. Incidences of piracy in the Gulf of Aden and off the coast of Africa have been increasing since 2005, but the number and scale of recent attacks is a real cause for concern. To set things in context, since June 2007 there have been more than 200 reported acts of marine piracy there and 30 percent of Europe’s oil goes through this route. We are also likely to see a rise in b usinesses and their executive being targets from threat groups, terrorists and disgruntled populations following the financial and economic turmoil we are witnessing — which could long outlast the recession. We will be exploring this in more detail in a report in June. Blame Culture It’s not just changing weather and violent actions that the world seems to be facing more of, but a blame culture that, in this current financial environment, may spiral out of control. Boards now spend 13 percent of their time discussing litigation, and most companies believe that stakeholders outside the United States are now more willing to litigate generally. Globally, actions brought by employees and customers are the most frequent, but actions from shareholders, regulatory authorities and special interest groups will grow as people take stock of the subprime and credit crunch crises. Added to this, there is a perception that U .S. courts are becoming more willing to rule on cases that might ha ve once been considered extraterritorial. Concerns about liability risk — whether real or perceived — are constraining entrepreneurship in business at a time when we need the best and brightest to stand up. But it’s not all doom and gloom. Risk is not a dirty w ord. The insurance industry deals within it every single day and we have made it our business. We manage many risks — big and small; immediate and long term; simple and complex — but the most important thing is, when managing these, we don’t forget the others. IJ Ward joined Lloyd’s as CEO in April 2006. www.insurancejournal.com
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:35 PM
Page 55
>.:??>/,70 49>@=,9.0 .:8;,9D .ZYR]L_`WL_P^
Delta General Agency ZY _SPT]
Anniversary /PW_LĂ&#x20AC;^ TYYZaL_TaP ^[T]T_ LYO PY_]P[]PYP`]TLW QZN`^ SLaP P^_LMWT^SPO _SP NZX[LYd L^ L XL]VP_ WPLOP] BP L]P []Z`O _Z bZ]V bT_S /PW_L LYO bP WZZV QZ]bL]O _Z L WZYR LYO []Z^[P]Z`^ [L]_YP]^ST[
^NZ__^OLWPTY^ NZX
Scottsdale Insurance Company & design is a federally registered service mark of Scottsdale Insurance Company.
05.04.09 SOUTH CENTRAL.qxd
4/28/09
3:35 PM
Page 56
Joe Santini, Master Mechanic. Keeps classic cars running smoothly. Relies on Applied Underwriters to help run his business the same way. ®
Business owners shouldn’t have to be experts in everything. Applied Underwriters gives them tools to focus on what they know best: their business. With products like SolutionOne® that integrate casualty coverages with payroll processing and risk reduction services. Our superior customer service and Best’s Rating of A (Excellent) have earned us a client retention rate of over 90%. For more information call (877) 234-4450 or visit www.applieduw.com.
©2007 Applied Underwriters, Inc. A Berkshire Hathaway Company.