By Phil Zinkewicz
In the past, independent insurance agents have been accused, probably with some justification, of resting on their laurels, of concentrating on traditional lines of business at the expense of daring expansion into new marketing approaches and seeking out new product opportunities. Well, that was in the distant past. In the last decade, producers learned the hard way that, in order to survive, they could no longer depend upon old loyalties and that, in order to grow, they had to establish new relationships and become knowledgeable about new exposures. They learned also that old, traditional competitors and/or enemies, now just might be their marketing partners of the future.
Hence, we see agents operating as program administrators themselves or working with program administrators, moving into exotic exposures that were once the sole province of the excess and surplus lines industry. We hear agent association leaders discussing openly how producers can work with banks, once the independent agent's mortal enemy but now more of a potential colleague, given the right set of circumstances. By the year 2000, we will probably see an independent agency force unlike any that has been heretofore known.
One area of potential growth for independent agents is in branching out into providing coverages for exposures they may not have covered previously. One such area of new exposures for many agents is the construction and home building industry. Moreover, despite the uneven performance of the construction industry in the last few years, at least one program administrator that specializes in the business has shown significant growth and is providing opportunities for independent agents across the country.
Home Builders Insurance Services, Inc. (HBIS), based in Jacksonville, Florida, features an array of products for the construction industry that provide "comprehensive coverages that include numerous enhancements, many of which are automatically included at no additional cost," the company says. Alan Ferguson, vice president in charge of marketing for HBIS, says that available coverages include residential and commercial builders risk, general liability, tool and equipment, commercial package, commercial automobile, umbrella and more. HBIS, as the wholesale administrator, writes the business for The Maryland Insurance Group, an A-rated company, and markets the product through some 7,000 agents in 49 of the 50 states (HBIS does not operate in Hawaii).
And yes, according to Ferguson, HBIS is looking for new agents to bring in new business. "We want agents who have potential business to contact us. Agents interested in exploring the home builders and construction area should also contact us and we will send out prospecting kits, and the only requirements are that they are or can become licensed with Maryland. We are looking for full-time professional independent agents. We don't deal with direct writing agents or agents who only market insurance part-time," says Ferguson.
HBIS is also dedicated to assisting new agents as well as current ones, according to Ferguson, and, in that light, provides instructional materials and conducts numerous industry workshops. "We do 200 seminars a year," says Ferguson. "We also have a co-op program where we reimburse agents up to 50% for their advertising expenses. We also distribute promotional materials and serve, in a sense, as a public relations organization for our producing forces," he says. "HBIS is endorsed by more than 200 construction and home builders trade associations across the country," Ferguson says.
"Among the players in the market providing insurance for residential general contractors, residential and commercial subcontractors and remodelers, HBIS is clearly the top contender," says Ferguson. "For more than 50 years, HBIS has supplied builders with top-of-the-line property and casualty insurance. With a full line of coverages designed especially for the building industry, this program does more than just fill a niche. It provides a specialization in builders insurance that is unmatched."
Continues Ferguson: "HBIS is the oldest and largest program in the nation that is designed specifically for the construction industry. Even paper general contractors who subcontract most, or even all, of their work are readily covered."
Ferguson also points out that The Maryland's commitment to the construction insurance industry, and to HBIS, is significant. "In fact," says Ferguson, "the Maryland Insurance Group believes in the construction industry so strongly that they divided their entire commercial insurance division into three specialty areas, one just for construction."
Ferguson says that builders risk is the backbone and most popular coverage offered by HBIS. It's an easy-to-use reporting form policy with both annual and monthly rate options. There are also plenty of built-in extras in the basic policy, such as coverage for theft of building materials, the ability to insure profit, multiple deductible options, fire department service charge coverage and valuable paper coverage, says the HBIS marketing executive. Builders can even provide coverage in the interest of their subcontractors if the subcontractors' materials are damaged or stolen from the builder's job site.
"HBIS builders risk policyholders also have a Loss Control and Builders Risk Reward Program available to them at no extra cost," says Ferguson. "This program offers rewards from $250 to $10,000 to anyone providing information that leads to the arrest and conviction of a person committing theft, vandalism or arson at residential construction sites displaying the reward program signs or decals."
Continues Ferguson: "Our trade contractors program is a new one for us and one which we are pursuing aggressively. We welcome new agents into our programs and we are moving across country in an attempt to structure deals which will benefit us, agents and our insureds."
Therefore, in today's era of "niche" marketing, opportunities abound for agents even in industries that have leveled out economically. Agents would do well to continue to explore all avenues of potential growth.
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The author
Phil Zinkewicz is an insurance journalist with some 25 years' experience covering the international insurance and reinsurance arenas.