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Specialty Lines Markets The umbrella/excess liability market With less than half of the small commercial market carrying umbrella coverage, agents have lots of prospects By Larry G. France The commercial umbrella market represents a real opportunity for independent insurance agents. Only 41% of the companies in the small commercial market have umbrella coverage, according to data compiled by MarketStance, Middletown, Connecticut. (See the accompanying tables.) And with the cost of umbrella coverage softening or staying level, this is a real opportunity to provide necessary coverage at affordable prices. The situation in the small commercial market is in stark contrast to middle market accounts, where 91% of the businesses have umbrella coverage, and 100% of the national accounts market is covered by an umbrella. The MarketStance data shows that the average umbrella limit for small commercial insureds is $1 million; the average for the middle market is $4.3 million; and for national accounts, it’s $17.1 million. For more information go to www.marketstance.com Market conditions As the primary market goes, so goes the umbrella market. Well, the market is stable at best so that means that umbrellas are in the same rate mode. In some cases that means the rate is lower than last year. Capacity is in fine condition. Although the industry has seen softening in the casualty sector, umbrella pricing has not gone down dramatically across the board, according to Toni Campbell, marketing manager at RISC, Inc. “There is good capacity with solid A rated markets and several can offer limits of $25 to $50 million.” “Generally, umbrella rates are status quo,” adds John Gaskill, senior vice president at MarketScout. “The primary general liability rates are down slightly and the primary auto premiums vary with market and experience. The umbrella rates usually follow. In some specialty areas, where the primary rates are out of line, the umbrella underwriters will re-rate the primary before they factor the lead umbrella.” The umbrella factors for lead umbrellas or the first million excess of a million range from 15% to 35% subject to auto experience. Gaskill says that “underwriting is much tighter this year and underwriters are requiring well-documented files, i.e., copies of underlying quotes, primary and supplemental applications, current valued loss runs (within 90 days) and financials for any SIR business. The only major underwriting change made by a number of markets,” according to Gaskill, “is the elimination of the usual and customary $10,000 retention. “Most umbrella carriers require at least an A VII Best rated underlying market, but some of our markets will only require B+ VI rating. The majority of markets will require a $1 million attachment point for general liability and auto with $500,000 for employers liability. Capacity,” says Gaskill, “does not seem to be a problem; however, many companies have decided to play lower in order to get more premium. We have markets that will provide a buffer layer over $50,000 primary limits or self-insured retention to complete the first million.” MarketScout places coverage for first layer umbrella and following form excess on admitted and nonadmitted paper with limits up to $25 million. Classes include nursing homes, apartments, residential contractors (east of Texas) and buffered layers below $1 million. New products Good news lies in the fact that some new products are being introduced. AIG Specialty Excess is a source for commercial umbrella and excess casualty through wholesale brokers for difficult classes that include: • Construction (including residential and commercial projects, contractors and sub-contractors) • Public Entities (including law enforcement and EPL for public entities and public officials) • Transportation (including municipal light rail and transit systems) • Educational Institutions • Other general risks R.E. Chaix has added a new personal umbrella program that will entertain limits up to $5 million and accommodate clients who have their auto and homeowners with different carriers. Coverage can include auto, motorcycles, snowmobiles, and ATVs. Watercraft is included with limits of 500/500/100 or $500,000 CSL. Rental units, vacant land and motor homes are also eligible for coverage. Seth Johnson, vice president at Atlantic Specialty Lines, Inc., suggests that agents view “the softening in the market in 2005 and 2006 as opportunities to cross-sell other lines of insurance. Agents and brokers are saving their insureds’ money on property, GL, inland marine and other lines. Instead of pocketing the extras funds, many insureds are purchasing excess or umbrella coverage.” For additional information, access The Insurance Marketplace Directory at www.insurancemarketplace.com. Upcoming Specialty Lines topics include Trucking in August, Pay for Play in September, and Professional Liability in October. The following have responded to our survey and indicated that they are a market for Umbrella and/or Excess Liability: Agency Marketing Services, Inc. An E&S broker that operates in FL only with limits of $25 million. Will consider all classes for umbrella or follow-form excess and also can customize coverage (online quoting available for personal umbrella). Will not write less that B+ and $1 million underlying limits. Can write buffer layers to increase underlying limits. Can offer GL, products liability, environmental liability, special events, inland marine and packages. All carriers are A rated. Aon Specialty Product Network A nationwide marketing organization representing MGAs, program administrators, managing underwriters and E&S brokers with various limits. Will consider most classes. All carriers are A rated. Apollo General Insurance Agency, Inc. A general agency/E&S broker that operates in all states with limits of $25 million. Target classes are demolition, crane/rigging, and difficult contracting risks (commercial). Can offer GL. All carriers are A rated or better. Arrowhead General Insurance Agency, Inc. A general agency operating in AZ, CA, CO, CT, DE, FL, GA, MD, NJ, NY, NV, OR, PA, RI, SC, TX, VA and WA with limits of $1 million, $2 million, $3 million and $5 million. Handles personal lines only with emphasis on in-home businesses. All carriers are rated A+. Atlantic Specialty Lines, Inc. An MGA/E&S broker that operates in the mid-Atlantic states, FL, GA and NY with limits of up to $10 million. Target classes are: (commercial) auto driven, contractors, habitational, and lessor’s risk; (personal) youthful drivers, high-profile, adverse driving records. All are considered on a case-by-case basis. Can offer (commercial) auto liability/PD, GL, property, and inland marine; (personal) homeowners, dwelling fire, condo, and vacant dwellings. All carriers are A rated. Bohrer, Croxdale & McAdoo, Inc. An MGA that operates in AR, IA, IL, KS, KY, MO, NE, OK and TN with unlimited limits. Carriers are Capitol Indemnity, Capitol Specialty, Scottsdale and Statehouse Casualty Managers. Brownyard Group A program administrator that operates in most states with limits of up to $5 million for security guard program and up to $2 million for pest control program. Target classes are security guard and pest control operators. All carriers are highly rated. Buckingham Badler Associates, Inc. An MGA wholesaler/E&S broker that operates in CA, NJ, NY and PA with unlimited limits. All carriers are rated A+. Burke-Daniels Co., Inc. An E&S broker that operates worldwide with limits of $1 million - $50 million. Target class is oil lease operators; will not write refineries. Can offer oil lease property, CGL, and umbrella. AIG Oil Rig, Zurich American, and Lloyd’s are the carriers. Burns & Wilcox Ltd. An MGA that operates in all 50 states with limits of $1 million - $100 million. Target class is hard-to-place personal umbrella, including celebrities, multiple tickets/accidents including DUIs and problem boats. Can offer comprehensive personal liability, excess auto liability, and excess watercraft liability. All carriers are rated A or better. Caitlin-Morgan Insurance Services An MGA/E&S broker that operates nationwide with various limits. Target classes are health care, or unusual casualty or property, and workers comp. Will not write subjective. Various carriers are used to place coverage. Carnegie Insurance Services Corp. An MGA/E&S broker operating in all states with limits of $25 million-plus. Target classes are high-profile, celebrity, professional athletes, preferred drivers, and high-risk drivers. Can offer comprehensive personal liability, excess comprehensive personal liability, excess personal auto, personal umbrella, excess personal umbrella, and excess liability. All carriers are rated A or better. Casualty & Surety, Inc. An E&S broker that operates nationwide with limits of $50 million-plus. Target class is contractors. Will not write personal excess or umbrella. All carriers are A rated. Centurion Insurance Group An E&S broker that operates in all states with limits of $50 million. Target class is manufacturing. Will not write transportation. AIG is the carrier. Continental/Marmorstein & Malone An MGA/E&S broker that operates in NJ and NY state only with commercial umbrella limits of $50 million (with primary & excess umbrella), and personal umbrella of $10 million (with primary and excess umbrella). Will consider all classes. Can offer 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. Doran Excess Underwriters, Inc. An MGA that operates in all states except AK and HI with limits of $10 million. Target class is most medical professional exposures. Will not write residential contracting exposures. United National Group is the A rated carrier. Educational Institutions PG, Inc., c/o S.H. Smith & Co. An E&S broker that operates in all states with limits of $1 million - $50 million. Target class is private schools and colleges. Can offer EPLI. All carriers are A rated. Evolution Insurance Brokers (EIB International) An E&S broker that operates in all states with all limits available. Will consider all risks. Can offer monoline liquor, assault and battery, and after 3 a.m. closing time. Prime is the B rated carrier Excel Insurance Service, Inc. An E&S broker that operates in NJ and PA only with limits of $5 million. Will not write entertainment. Carriers are rated A+. First Capital Group An MGA that operates throughout the continental United States with limits of up to $5 million. Target classes are property owners and commercial contractors. Will not consider residential contractors. United National is the A rated carrier. Gabor Insurance Services, Inc. An MGA operating in AL, FL, GA and MS with limits of $25 million. Will consider all personal umbrella classes. All carriers are A rated. Great American Insurance Co., Specialty Human Services Division An insurer operating in all states except FL, HI, LA, MS, OK and TX. Target classes are animal-related, arts/cultural, child day care/nurseries, K-12 traditional schools, food-related, grant making. Will not consider foster placement, adoption, referral agencies, hospital or other medical exposures, or youth athletic exposures. Can offer package lines—property, inland marine, crime, GL, professional liability, auto, and umbrella/excess. All GAIC pool companies are A rated. H.R. Keller & Co., Inc. An E&S broker/wholesaler that operates in NY state only with limits of up to $50 million. Will consider all classes. Can offer excess liability. Various carriers are used to place coverage. Harry W. Gorst An MGA/surplus lines broker that operates in CA only with commercial limits of up to $20 million and personal limits of $10 million. Target class is high net worth individuals and property in brush areas. Can offer excess liquor liability and uninsured/underinsured buyback limits up to $1 million. Scottsdale (A+), Topa (A-), Colony (A) and Navigators (A) are the carriers. Hull & Company, Inc. Insurance Center Special Risks, Ltd. An MGA/E&S broker that operates in CT, MA, NH, RI and VT with limits of $5 million. Will not write auto-driven accounts. Essex (A), Fireman’s Fund (A) and Lexington (A+) are the carriers. Insurance Innovators Group An MGA/E&S broker that operates in CT, DE, MA, MD, ME, NH, NJ, NY, PA, RI and VT with commercial limits up to $50 million (depending on the risk), and personal limits of $10 million. Will consider most classes. Can offer GL, property, and commercial auto. All Carriers are rated A+. Jacobs and Associates An E&S broker that operates in OH only with limits of $1 million - $10 million. Target class is high-risk individuals. Can offer excess personal umbrella, watercraft and auto. Mt. Vernon Fire and USLI are the carriers. James River Insurance Company An excess/surplus lines insurer that operates in all states except NH and OH with limits of $5 million. Target classes include auto, manufacturing, and products of all kinds. Will not write residential new construction over occurrence trigger. Can offer commercial excess only—no personal, no umbrellas, no excess over SIRs. James River is an A- rated carrier. Jimcor Agencies An E&S broker operating in CT, DE, MA, MD, NJ, NY, OH, PA, VA and WV with commercial limits of $100 million, and personal limits of $10 million. Will consider all commercial classes (excess auto and GL, habitational, trucking, contractors, retail, wholesale, and distributors); personal classes include celebrities, sports/fitness, and hard-to-place. Can offer excess professional and pollution. All admitted and nonadmitted carrriers are rated A- or better. Metcom Excess An MGA/E&S broker that operates in NJ, NY and PA with commercial limits of $10 million and personal limits of $5 million. All carriers are rated A or better. Midlands Management Corp. An MGA operating in AR, CO, KS, LA, MN, MO, MS, NE, NJ, NM, OK, TX, VA and WY with limits of $5 million. Target classes are antique stores, apartments (less than five stories), art galleries, beer manufacturing, beverage bottlers/distributors/stores, bowling lanes, golf country clubs, convenience/gas stores, distributors, manufacturers (certain classes), general contractors, hotels/motels, restaurants, and shopping centers. Will not write gas/oil-related except oil and gas lease operators and governmental oil and gas contractors. Can offer P-C, EPLI, professional liability D&O and E&O (in certain states only). Markel, American Empire, and NYMAGIC are the nonadmitted carriers. NIF Group, Inc./NIF Pro An MGA/E&S broker that operates on an admitted basis in all states and a nonadmitted basis in the eastern United States with limits of $25 million available, more through layering. Target classes are contractors, auto and real estate. Will not write trucking. Can offer GL. All carriers are A rated. Pacific Specialty Insurance An insurer that operates in CA, GA, MO and TX (CPL); and AZ, CA, GA and TX (personal) with personal limits of $500,000, $1 million, $2 million and CPL limits of $25,000, $50,000, $100,000, $200,000, $250,000, $300,000 and $500,000. Can offer personal stand-alone umbrella with underlying carriers of B+ or better, and CPL as a complement to the California Fair Plan. Pacific Specialty is an A rated carrier. Petroleum Marketers PG, Inc., c/o S. H. Smith & Co. An E&S broker that operates in all states with limits of $1 million - $10 million inside the program; additional limits available. Will consider most classes. Will not write piping under pressure. Can offer primary auto. All carriers are A rated. Prime Insurance Syndicate Inc./I.E.B.S. An MGA (IEBS)/insurer (Prime) that operates in all states except AK, AZ, CA, CO, LA, NH, NY, RI, TX and VA with all limits. Will consider all classes. Can offer monoline liquor coverage, assault and battery, after 3 a.m. closings (in the hospitality industry). Prime is a B rated company. Response Aviation Insurance Services An E&S broker that operates worldwide with limits as needed. Target class is aviation. Can offer ferry flights in addition to aviation products. Various admitted carriers and London are used. Restaurant Owners PG, Inc., c/o S.H. Smith & Co. An E&S broker that operates in all states with limits of $1 million - $5 million inside the program; additional limits available. Target class is restaurants. Can offer EPLI. All carrier are A rated. RISC Inc. An E&S broker with contract underwriting and programs departments operating in all states with limits of $50 million with one carrier and ability to build limits as needed. Target classes are contractors, manufacturers, habitational business, and oil/gas. Will not write aircraft. Can offer GL, pollution, professional, and workers comp. The carriers are AIG, RSUI, Fireman’s Fund, Liberty, Great American, Zurich, and St. Paul Travelers. Roush Insurance Services, Inc. An MGA that operates in IL, IN and OH only with limits of $10 million. Target classes are building owners, contractors, organizations (both for-profit and NFP) and manufacturers. Will not write any work involving conveyors. Can offer property, GL, inland marine, E&O and D&O. All carriers are rated A+. Russell Bond & Co., Inc. An MGA/E&S broker operating in CT, MA, NJ, NY, PA and VT with limits of up to $50 million and beyond, depending on the risk. Target classes are high-profile individuals, and most commercial classes, including preferred and distressed, specialty personal umbrella and group personal umbrella. Can offer primary GL, buffers and excess liability. All carriers are rated A- or better. S.H. Smith & Co. An E&S broker that operates in all states with limits of $1 million and up. Will consider all classes. Can offer products liability and GL. All carriers are A rated. S.I.U., LLC An MGA/E&S broker that operates in CA only with limits of $1 million - $5 million excess/umbrella (commercial only). Target classes are contractors and lessors. Can offer excess coverage over CGL, auto, EPLI and umbrella. The carrier is rated A-. Sunderland Insurance Services, Inc. An MGA that operates in all states except AK and HI with limits of $5 million. Target class is pizza and fast food delivery. Will not consider residential contractors. Can offer pizza delivery and hired/non-owned auto. United National is the A rated carrier. Swett & Crawford An E&S broker that operates in all states with limits as needed. Will write only commercial umbrella. Can offer GL and products liability. All carriers are rated A- or better. United Brokers Inc. An MGA that operates in AL, AR, GA, IA, IL, IN, KS, KY, LA, MA, MD, MI, MN, MO, MS, NC, NJ, NV, OH, OK, SC, TN, VA, WI and WV with limits of $5 million. Target class is special program for coal, truckers, and all others. Can offer property, liability and trucking. IAT/Acceptance (A-), Penn-America (A) and USLI (A++) are the carriers. W.H. Greene & Associates An MGA/E&S broker that operates in all states except AK, DC, DE, HI, IA, ND, NM, SD, UT and WY with limits of $10 million (three in-house companies); excess limits available up to $100 million. Will consider all commercial classes, but targets municipalities, school districts, contractors and manufacturers; will not write personal umbrella. Can offer public officials liability, police professional liability, educators legal liability and EPLI. All carriers are rated A- or better. Western Networked Insurance Services A broker/membership organization that operates in AR, CA, CO, ID, NM, NV, OR, TX, UT and WA with limits of $10 million. Will consider most classes. RLI, St. Paul Travelers, The Hartford, Fireman’s Fund, AIG, Chubb, and CNA are the carriers. Whitcomb Surplus Lines Brokers, Inc. An E&S broker that operates in all states with limits of $100 million. Target classes are manufacturers, importers, and contractors. Will not write personal lines. Can offer primary commercial auto, and GL. Liberty, Great American, Genstar, and The Hartford are the carriers. World Wide Facilities, Inc. An MGA that operates in all states with limits of $10 million. Target classes are temporary staffing firms, and professional employee organizations (PEO). Can offer GL, workers comp, auto, staffing E&O, and alternative staffing organizations (ASO). AIG is the A+ rated carrier. Yates & Associates Insurance Services, Inc. An MGA that operates in CA only with various limits. Target class is commercial umbrella. Can offer auto, and EPLI. All admitted and nonadmitted carriers are rated A+. * |
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