Marketing Comp for small businesses AmTrust and ASPN team up to offer unique product to independent agents and brokers By Dennis H. Pillsbury
In small businesses today, there is a big need for workers comp coverage,” notes Jerry Tegan, president & CEO of Aon Specialty Product Network (ASPN). “The average premium size may be small, but the potential is enormous. Our goal at ASPN is to look for solutions for the independent agency network’s clients’ needs. AmTrust has a very good product and an A- rating, an excellent rating for a monoline company. “AmTrust provides workers comp coverage to a market segment in which our provider companies are not active,” Jerry continues. “We saw this as an opportunity to expand our product distribution to the independent agents and brokers and create a win-win situation for both the independent agency network and AmTrust.” He adds that other ASPN providers—Muirfield Underwriters and Swett & Crawford—provide workers comp coverage for larger risks. Muirfield, an MGA, provides workers comp for risks over $50,000 in premium in 10 targeted states. Swett & Crawford provides wholesale market workers comp from offices across the United States. AmTrust Group, New York City, through its U.S. operating companies, Rochdale Insurance Co., New York City, and Technology Insurance Co., Nashua, New Hampshire, specializes in writing monoline workers comp coverage for small Main Street businesses. Mike Saxon, AmTrust president, explains: “Workers comp for small businesses has been ignored by a lot of carriers. Even those companies that write package policies for Main Street businesses aren’t interested in writing the comp on these risks. That’s the business that we want. “We have a paperless environment thanks to our proprietary software that has streamlined the underwriting process,” Mike continues, “but it still allows us to look at every submission. That’s where our expertise really pays off. We underwrite carefully at the beginning but only touch each piece of business once or twice so that we can keep the expenses down. We are firmly committed to the concept that people, as opposed to machines, make better underwriting decisions. Our automated systems are there not to replace our underwriters but to help them make informed decisions.” Ron Pipoly, AmTrust CFO, notes: “There are around 25 million small businesses in the United States and they have been responsible for much of the country’s economic growth. We realized early on that this was a segment that helped to fuel our economy and that workers comp coverage was vital to its continued health and success. We needed to find a way to fill that market’s need for comp in a cost-effective manner and to provide risk management services that would help this market control or eliminate losses. “Through our sister company, North American Risk Management, we make available loss control and risk management services to any of our clients (agents) or their insureds. We also provide an extensive online risk management library through the North American Risk Management Internet platform (www.narm.biz).” ASPN’s Jerry Tegan notes that it was the combination of services and product that made AmTrust an excellent addition to the ASPN network of provider companies. “This represents a new direction for us; it’s the first time ASPN has offered to the independent agency network companies’ products, programs and coverages not affiliated with Aon. We at ASPN recognized the need for this product and AmTrust’s executive management recognized the value of the ASPN distribution system, so discussions began.
“The ASPN regional vice presidents began discussions with independent agents to find out if they wanted a product,” Jerry continues. “Once we found a need there, we then went to every effort to make certain that the product we had found was the right one for the need. We were very impressed with AmTrust’s long-term commitment to the small business market and with the quality of their people. Equally important was that they have a good reputation in the marketplace for quick turnaround on submissions and in handling claims.” AmTrust’s Mike Saxon says: “We don’t place any restrictions on our agents. We’re satisfied with one or two submissions a year. And we provide 24-hour turnaround. We can bind and issue a policy within 24 hours. We also handle endorsements within 24 hours. Using our online quoting system, agents can obtain a ‘rating indication,’ letting them know that the risk fits our underwriting appetite. Addition-ally, our underwriters will get back to agents within 24 hours if more information is needed for us to make an underwriting decision.” Agents can also go online to see a list of eligible and ineligible classes of business (www.amtrustgroup.com). “On the claims side,” he continues, “We have a 24/7 claim reporting service and an immediate response program. We have claim locations throughout the country, so we can respond quickly to any claim situation. And we understand the need for rapid response so that a small claim doesn’t balloon into a big problem.” Mike continues by adding that AmTrust has been very successful working with small businesses to set up return-to-work programs. “There’s a myth out there that transitional duty is more difficult with small businesses. We found that it’s just the opposite. When an employee is out of work at a small business, he or she is not just one out of many employees. The people who work in small companies usually know each other very well and watch out for each other. They’re very supportive of efforts to bring people back into the ‘work family.’ As we like to tell our agents and their insureds: Return-to-work works.” “Mike Saxon and his people are very responsive and quick to act and make changes to fit market needs,” Jerry Tegan says. “That was one of the key factors that helped to cement our relationship with them.” Mike Saxon points out that “one of the things that we do that helps our agents and our retention is advance notification of any anticipated change at renewal time. We notify our agents 90 days in advance of the renewal date if we are making any change and why. If the decision is one of those rare instances where we decide not to renew the account, we tell the agent why. This advance notification gives him or her time to remarket the business. If it involves an increase, the agent has time to prepare the client ahead of time.” ASPN announced to more than 35,000 independent agencies the availability of coverage through AmTrust in a special edition of the ASPN “Powerful Connections” newsletter. “Our regional vice presidents also will be visiting those agencies that we know will be most interested in this product,” Jerry says. “Our agency database allows us to be very specific in our marketing effort since it includes demographic and other information about the agency and its appetite.” Jerry notes that, “ASPN partici-pates in 40-plus trade shows, market-ing our products and provides a quick reference guide to our agent partners.” To be eligible for coverage through AmTrust, a risk should: 1. Have at least one full-time employee and generate a premium between $500 and $50,000, although the company can write policies up to $100,000 in premium. 2. Have fewer than 75 employees at a single location. 3. Have a loss ratio less than 40% in the experience period. The company uses the ACORD application but supplements it with a narrative from the agent that describes the nature of the business to be insured. Three years of loss runs plus the current year loss run also are needed. Additionally, a simple industry-specific questionnaire must be completed by the agent. * |
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