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SPECIALTY LINES MARKETS COMMERCIAL AND PERSONAL UMBRELL Have you capitalized on the additional revenues? By Larry G. France Two years ago, when we polled companies actively writing umbrellas about the state of the market, we heard: “Pricing is still on the rise.” “Commercial umbrella and excess pricing is at an all-time high.” “There are fewer companies, but lack of capacity, rates and minimum premiums are still edging up slightly.” Is this the state of the umbrella market today? No. Today’s feedback reflects a 360-degree turnaround. Toni Campbell, marketing coordin-ator at RISC, Inc., says, “Industry pricing is softening on commercial umbrella. Most, if not all, of our business is commercial lines. Some markets can offer personal riders excess and lead personal umbrella. Capacity remains constant with our markets. Coverage enhancements are on a risk-by-risk basis.” Matthew Farbman, property/casualty broker, Jimcor Agencies: “In this changing marketplace we are experiencing carriers showing increased capacity and more competitive pricing while including classes that include OL&T and products risks.” Scott Schleicher, SVP at ISFG International/CCBsure: “Our extensive experience insuring the IT industry for more than a decade has led us to believe that as the market continues to soften, three trends have manifested: Prices are continuing to soften, capacity is growing, and competition is heating up as more and more new entrants into the market try their luck. “Ten years ago,” Schleicher continues, “very few insurers offered commercial umbrella coverage to this industry. Carriers that did, offered high-quality policies at even higher premiums with little capacity. Over time, both regional and national insurers began to take note of the results that the original carriers were receiving and jumped into the market in an effort to take some of the market share. “As the marketplace evolved and new competitors began trying their hand in the market, policy buyers were given two choices: higher quality policies at prices 20% or higher than the average price or a much less comprehensive policy at a bargain basement price,” says Schleicher. “Having the availability of adding more brokers to the mix with an ‘I can write it too’ mindset continued to contribute to the significant increase in supply that further drove down the prices.” Schleicher says that “capacity limits increase as competition to market continues to heat up. In an ongoing effort to ‘keep up with the Joneses,’ insurers and underwriters who once would have denied a small, hazardous company, higher commercial limits, are now scrambling to take on the additional risk.” Two years ago carriers would have said “no” to this risk, knowing that the only other carrier would turn it down also. In today’s market, competition is so fierce that there are many carriers willing to say “yes.” “This migration of the marketplace, combined with continuing signs of a softening market, has driven down premiums at renewal time. As the insurance marketplace continues to soften, we are confident we will continue to see prices decrease. With a marketplace saturated in competition, offering comparable policies, prices will continue to become the lone differentiation as policy buyers shop around,” says Schleicher. How much is enough? A million dollars is not what it used to be. “With over five million small businesses in the United States making up about 80% of the total U.S. establishments, there is a continual steady demand for commercial umbrella and excess liability products,” according to Paul Harris, CPCU, ALCM, underwriting executive, Specialty Markets at RLI Insurance Company. “GDP is still forecast to grow in excess of 3% this year and most innovation is still driven by small business. Published studies show that an insured needs to carry $4 million to $5 million in limits to get the same protection that a $1 million limit provided in 1990. Those needs, combined with primary GL rates that are holding ground, suggest that we should continue to experience profitable growth.” Are you missing premium dollars with your personal lines accounts? The personal umbrella market is typically driven by what is occurring in the homeowners and auto market within a given territory, states Becky Lundberg, AVP/product director, PUP (Personal Umbrella Policy) at RLI. “Since most carriers require either the home or auto to write the umbrella layer, if market conditions make it difficult to obtain primary coverage, the umbrella coverage is at risk. With the potential for large claim payouts with small premiums, many carriers do not focus on the personal umbrella market, offering only the basic limits or readily tighten their requirements during stressed market conditions.” Lundberg continues: “From a marketing perspective, the umbrella is a very inexpensive product for a lot of protection. Anyone with assets to protect needs an umbrella policy. Premiums in the marketplace start at just over $100 for $1 million in coverage. However, since it is not required to maintain your auto registration or your mortgage, many agents don’t focus on selling the coverage along with the home or auto policy, which can ultimately leave them vulnerable from an E&O perspective.” The opportunity and need are present for both commercial and personal umbrella sales. Are you taking advantage of them? Specialty Lines feature topics in the coming months include trucking in August, pay for play in September, and professional liability in October. The following have indicated that they are a market for commercial, personal umbrella or in some cases both. Pay attention to target classes and classes not written. All Risks, Ltd. and All Risks LLC PA office: NC office: TX office: An E&S broker that operates nationwide with limits ranging from $20 million to $100 million, depending on carrier and territory. Target classes are contractors, trucking, manu-facturers, OL&T, products, habitational, and restaurants. Will not consider aviation risks or nursing homes. Can offer GL, property, auto, workers comp, and products liability. All carriers are rated A- or better. American Wholesale Insurance Group An MGA that operates in all 50 states with limits of $10 million. Target classes are real estate, contractors, hotels/motels, restaurants, and residential contractors. Will not write chemicals or aircraft products. Can offer excess auto, buffer layers. United National is the A rated carrier. Aon Specialty Product Network An MGA/program administrator/E&S broker that operates in all states. All carriers are rated A or better. Apollo General Insurance Agency, Inc. An E&S broker that operates in all states except NY with limits of $25 million. Target classes are construction, demolition, and crane/rigging. Will not write residential, except apartments. Can offer CGL. All carriers are A rated. Arlington/Roe & Company, Inc. An MGA that operates in IL, IN, KY, OH, MI and TN with commercial limits of $25 million and personal limits of $10 million. Can offer primary and excess and monoline. Commercial carriers are Great American, Fireman’s Fund, and Ohio Casualty; and personal carriers are RLI and USLI. Arrowhead General Insurance Agency, Inc. A general agent/program manager that operates in AZ, CA and NV with limits of $5 million. Target classes are commercial contractors, apartment buildings and shopping malls. The carrier is A rated. Personal umbrella, including excess personal liability Operates in AZ, CA, CT, MD, NJ, NY, OR, SC, TX, VA and WA with limits of $1 million, $2 million, $3 million and $5 million. Target classes are personal lines/homeowners. Will not write professional athletes, entertainers, or high-profile individuals. RLI is the admitted A+ rated carrier. Automotive Risk Management & Insurance Services, Inc. An MGA/E&S broker that operates in all states with limits of $100 million. Target classes are franchised new car/truck dealerships. Can offer a primary garage liability package. AIG, Interstate and Golden Bear are the carriers. BAT Insurance Corp. An E&S broker that operates in CA and NV with limits of $100 million. Target classes are OL&T and M&C classes. Can offer following form excess. All carriers are A rated. Bruce V. Schneider Associates, Inc. An agency/broker that operates east of the Mississippi River with unlimited limits. Target classes are high-performance marine and brown water/blue water marine. Can offer commercial marine risks. All domestic and excess carriers are A rated. Caitlin-Morgan Insurance An E&S broker that operates nationwide with various limits. All carriers are A rated. Carnegie Insurance Services Corp. An MGA/E&S broker that operates in all states with limits of $25 million. Target classes are high-profile, celebrity, professional athletes and high-risk drivers. Can offer excess personal auto, excess comprehensive personal liability, and excess personal umbrella. All carriers are rated A or better. Casualty & Surety, Inc. An E&S broker that operates nationwide with limits of $50 million-plus. Target classes are manufacturers and contractors. Will not write personal umbrella. Can offer primary CGL and products liability. All carriers are A rated. Continental/Marmorstein & Malone An MGA/E&S broker that operates in NJ and NY only with commercial umbrella limits of $50 million and personal umbrella of $10 million with primary and excess umbrella. Will consider all classes. Can offer commercial and personal umbrella, primary and excess GL, excess commercial auto liability, and excess personal watercraft. Carriers are USLI, Chubb Custom Market, General Star, Interstate Fire & Casualty, Essex, Gulf, Nautilus, and Arch. Creative Underwriters Corp. An MGA/E&S broker operating in IL, IN, MI and OH with limits of $5 million. Target classes are trucking and contractors. Can offer primary GL and primary commercial auto. Carriers are General Star (A+) and Scottsdale (A+). Delaware Valley Underwriting Agency, Inc. Personal An MGA/E&S broker that operates in DE, GA, KY, MA, MD, NC, NJ, NY, OH, PA, SC, TN, VA, and WV with homeowners limits of $2 million, umbrellas of $10 million. Target classes are high-risk, unprotected risk, target risks, and coastal property. Can offer excess flood. Lexington, Lloyd’s, Navigators, Scottsdale, and AIG Private Client Group are the carriers. Commercial Operates in all of the same states except OH, with various limits. Will consider most classes and can write GL, property, and professional liability. All carriers are A rated. Educational Institutions PG, Inc., c/o S.H. Smith & Co. An E&S broker that operates in all states except AK with limits of $50 million. Target classes are private schools and colleges with fewer than 7,500 residential students. Can offer school leaders, EPLI, and property. General Star (A++) and Fireman’s Fund (A) are the carriers. Excel Insurance Service, Inc. An MGA/E&S broker that operates in NJ and PA only with limits of $10 million-plus. Will consider all classes. Scottsdale, Colony, and AIG are the carriers. First Capital Group An MGA that operates in all states except AK and HI with limits of $5 million. Target classes are (commercial only) property owners, contractors, and commercial auto. Various A rated carriers are used. G.J. Sullivan Co. An E&S broker that operates in CA only. Target classes are artisan contractors, garage and commercial auto, apartments, restaurants, earthquake, dwelling fire, and homeowner. The A rated carriers are Interstate Fire & Casualty and Scottsdale. Gateway Underwriters Agency An MGA operating in AR, IA, IL, KS, MO, NE and OK with personal limits of up to $50 million and commercial up to $10 million. Can offer excess auto and excess GL. USLI/Mt. Vernon and Scottsdale are the carriers. Harry W. Gorst An MGA/E&S broker operating in CA only with limits of $10 million plus. Will consider all lines of commercial and personal umbrella. Will not consider oil/gas, mining, or dams. Can offer marine excess (bumbershoot). Topa (A-), Navigators (A), Scottsdale (A+), and Colony (A) are the carriers. Insurance Innovators Group An MGA/E&S broker that operates in CT, DE, MA, MD, ME, NJ, NY, PA, and RI with personal limits of $10 million and commercial according to risk. Will consider various classes. All carriers are rated A+. ISG International/CCBsure An MGA/agency/program manager that operates in all states with commercial lines limits of $20 million. Target classes are information technology and life sciences. Will not consider medical staffing or general staffing. Can offer E&O. Chubb, St. Paul Travelers, The Hartford, CNA, Great American, Lloyd’s, Selective, Zurich, and AIG are the carriers. J.L. von Arx & Associates An MGA/E&S broker that operates in CA only with limits of $5 million excess of $5 million-plus. Target classes are garage and CGL. The A rated carriers are TOPA and Century Surety. Jacobs & Associates An E&S broker that operates in OH only with limits of $25 million. Target classes are personal umbrella, habitational, and contractors. Can offer GL, excess auto and buffer policies. Scottsdale, Mt. Vernon, and United National are the carriers. Jimcor Agencies An MGA/E&S broker that operates in the northeastern United States with limits of $1 million to $100 million-plus for commercial umbrella/excess liability, $1 million to $10 million-plus for personal/excess. Target markets are habitational/OL&T, contractors, trucking, environmental, and hazardous products. Will not consider tobacco, firearms, aerospace/aircraft products. Can offer excess products liability, excess professional liability, and property. Various admitted and nonadmitted A rated or better carriers are used. Johannes/Stoermer Co. An E&S broker that operates in KY and OH with various limits. Will consider all classes. Carriers are rated A- or better. M.J. Kelly Co., Inc. An E&S broker operating in AR, FL, IA, IL, KS, MO, MS, OK, TN, TX and UT with various limits. Target classes are personal and light commercial risks. Can offer excess auto. Various carriers are used for commercial; USLI is used for personal. Midlands Management Corp. An MGA that operates in AR, CO, KS, LA, MS, NE, NJ, OK, TN, TX, VA and WY with limits of up to $10 million. Target classes are apartments, residential/commercial contractors, hotel/motel, OCP, manufacturers, retail stores, and warehouses. Will not write oil/gas, mining, aircraft exposures, construction equipment, emergency response ops, fireworks manufacturing, gas dealers, school buses, wire rope manufacturing, or valves manufacturing. Can offer excess umbrella and excess OCP. All carriers are A rated. National Specialty Underwriters, Inc. A program administrator/wholesaler that operates in all 50 states with limits of up to $250 million. Target classes are hotels, commercial real estate, and contractors. Will not write contractors in NY. Can offer commercial umbrella and excess. All carriers are rated A- or better. NIF Group/NIF Pro An MGA/E&S broker that offers admitted markets in all states and nonadmitted in eastern states with limits of $25 million. Target classes are products, contractors, pharmaceuticals, medical products, any difficult-to-place casualty. Will not write trucking. Can offer GL, BOPs (some states), property and E&O. All carriers are A rated. Pacific Specialty Insurance An insurer that operates in AZ, CA, GA and TX (personal) and CA and MO (CPL) with limits of $100,000, $300,000, $500,000 (CPL), and $500,000, $1 million and $2 million (personal). Personal—can offer stand-alone umbrella with underlying carrier of B+ or better; CPL-complement to California Fair Plan. Pacific Specialty is an A rated company. Petroleum Marketers PG, Inc., c/o S.H. Smith & Co. An E&S broker that operates in all states with limits of $10 million. Target class is petroleum marketers. Can offer property and EPLI. General Star is the A++ rated carrier. Philadelphia Insurance Companies An insurer operating in all states except LA with limits of up to $10 million. Target classes are manufacturing and retail. Will not write nonprofits; law firms, security brokers not accepted under the for-profit D&O program. Philadelphia is an A+ rated company. Quaker Special Risk Commercial umbrella/excess Personal lines umbrella Restaurant Owners PG, Inc., c/o S.H. Smith An E&S broker that operates in all states except AK with limits of $10 million. Target classes are fine dining, banquet halls, and family style. Will not write pizza delivery. Can offer property, GL, EPLI, and liquor. Great American is the A rated carrier. RISC Inc. An E&S broker that operates in all 50 states with limits of $50 million. Target classes are contractors, habitational, manufacturing, and energy. The A rated carriers are Zurich, Great American, RSUI, AIG, and St. Paul Travelers. RLI Specialty Markets Commercial An insurer that operates on an admitted basis in selected states and nonadmitted in all states. Limits available: $5 million CUP or excess. Target class is most commercial lines risks with gross revenue under $7.5 million and under 10 vehicles. Will not consider home builders or risks with heavy or extra-heavy vehicles. RLI is rated A+, as is Mt. Hawley. Personal PUP is available on an admitted basis in all 50 states and DC with limits of $1 million, $2 million, $3 million and $5 million. Due to the stand-alone nature of the product, RLI can respond when the personal account is split between carriers, when the underlying carrier is not Best rated, when the underlying carriers don’t have an umbrella product or when additional flexibility is needed. Offers three underwriting tiers, enabling most insureds to qualify. RLI is rated A+. Robert A. Schneider Agency An MGA/E&S broker operating in IA, MN, ND, SD and WI with limits of $5 million. Target classes are (commercial) all classes, and (personal) high-profile individuals. Can offer all primary coverages. USLI (A++), Fireman’s Fund (A) and Penn-America (A-) are the carriers. Roush Insurance Services, Inc. An MGA that operates in IL, IN and OH only with limits of $25 million. Can offer property, EPLI, GL and commercial auto. Evanston (A), Essex (A), Scottsdale (A+), Tudor (A+), Gulf (A+), and Century Surety (A) are the carriers. Russell Bond & Co., Inc. An MGA/E&S broker that operates in CT, NJ, NY and PA only with limits up to $50 million-plus, depending on risk. Target classes are most commercial classes and high-profile individuals for personal. Carriers are rated A- or better. S.H. Smith & Co. An E&S broker that operates in all states with limits of $1 million plus. Target classes are manufacturing and OL&T. Can offer GL and environmental. All carriers are A rated or better. Sunderland Insurance Services, Inc. An underwriting manager that operates in all states except AK and HI with limits of $5 million. Target classes are smaller commercial accounts with umbrella premium from $2,500 to $25,000, excess commercial auto, excess hired and non-owned auto on pizza delivery. Will not consider truckers, oil risks or home builders. Can offer excess non-owned auto. United National is the A rated carrier. Swett & Crawford An MGA/E&S broker that operates in all states and in some foreign exposures with commercial/umbrella and excess liability limits of up to $200 million. Will not write personal umbrella. Can offer GL, products, and commercial auto. All carriers are rated A- or better. The Distinguished Programs Group An MGA that operates in all states except LA and TX with limits of $1 million to $100 million. Target classes are apartments, condos, co-ops, HOAs, PUDs, office buildings, retail/shopping centers (lessors risk only basis). Will not write warehouses, industrial or manu-facturing. Can offer property/boiler, CGL. Chubb (A++) and Great American (A) are the carriers. Topa Insurance Co. An insurer that operates in CA and NV with limits of $5 million. Target classes are commercial business only—low to moderate hazard business. Will not write personal umbrella including excess personal liability. Can offer primary GL and auto excess liability. Topa is an A- rated company. W.H. Greene & Associates An MGA/broker that operates in all states except AK, DE, HI, IA, ID ND, NM, NV, OK, SD, UT and WY with limits of $10 million, in-house authority; and $100 million in brokerage market. Target classes are public entity, contractors, real estate and manufacturing. Will not consider trucking—contract carriers. Can offer public officials, school board legal liability, including EPLI; police professional and miscellaneous professional. All carriers are admitted and A rated. Whitcomb Surplus Lines Brokers, Inc. An E&S broker that operates worldwide with limits of $50 million. Target class is strictly commercial—no personal lines. Numerous carriers are used to place coverage. World Wide Facilities, Inc. An MGA that operates in all states with in-house limits of $10 million. Target class is the staffing industry only. Can offer professional liability, GL, HNOA, EPLI, EB, and third-party fidelity. AIG is the carrier. Yates & Associates Insurance Services An MGA that operates in CA only with various limits. Will consider all classes. All admitted and nonadmitted carriers are A rated. Zurich An insurer that operates in all states with limits that vary by line. Will consider all classes. Zurich is an A rated company. * |
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