Chuck Wenk, president of Wenk Aviation Insurance Agency in Highland Park, Illinois, prepares to take off in his Beechcraft Twin Baron. His father, Samuel, who was a cargo pilot during World War I, started the agency in 1932.
Question: What do Oprah Winfrey, Jimmy Buffet and the Indianapolis Colts have in common?
Answer: They have all been clients of the Wenk Aviation Insurance Agencies.
While the current insurance buzz word for any sort of unusual coverage is "niche market"--aviation insurance, more than almost any other type of coverage, fits that description like a glove. From its inception, through a Lloyd's of London policy in the 1920s, aviation coverage has consisted of highly specialized policies designed to protect airports and aircraft, passengers and cargo, and everything else associated with the business
of flying.
"Probably the most important factor in the successful marketing of aviation insurance," says Charles "Chuck" Wenk, the 74-year old president of Wenk Aviation Insurance Agencies, "is the establishment of rapport and trust between the insured aviator or aircraft or airport owner and the insurance agency. Pilots want to deal with an insurer or agency that knows its way around an aircraft and an airport and is not a stranger to the terminology of the industry. That's probably the main reason why someone new trying to get into the business would likely have a very difficult time."
--Chuck Wenk (in front of his company Cessna Skylane)
Wenk Aviation surely knows its way around the aviation community. "The company was founded in 1932 by my father, Samuel, with an office in the Chicago Insurance Exchange Building," says Wenk. "He had been a pilot in World War I, flying cargo, so he never had the opportunity of meeting Snoopy or the Red Baron. After the war he joined Prudential Insurance as a trainee and in the heart of the depression founded
the agency."
Early on, Wenk continues, he helped design the first Fixed Based Operators (FBO) package plans, which to this day still are the standard policies providing airport owners and operators with coverage for most of their needs, including contractual and products liability, rental of planes for individual or student pilots and workers compensation. "All their needs wrapped into one neat little package," says Wenk. "My father was also instrumental in reducing life insurance 'ratings' for pilots which had previously been denied by insurers. He was able to convince Prudential and Continental that insuring pilots was good business."
The agency is now entering its 68th year of service, with Chuck Wenk having joined his father in 1949, following service in World War II and graduation from the University of Illinois. Initially the agency consisted of four people--the two Wenks and two assistants--with the Wenks drumming up business throughout the Midwest. Subsequently, he was joined by his son, Wesley, and daughter, Wendy--both licensed pilots, as are two other employees--Julie Carlfeldt and Holly Bishop. Currently there are 16 employees, and the agency is headquartered in Highland Park, Illinois, a suburb of Chicago.
In a tough industry, Wenk, which is licensed to do business in 48 states, including Alaska, has achieved an outstanding record. "Over the last five years our business has grown at a 15% annual rate," Wenk says. "We currently write premiums in excess of $13 million and in the 1998-99 year our growth rate rose to 16%."
The bulk of Wenk's business comes from the Middle West, particularly Illinois, Wisconsin, Indiana, Michigan and Ohio. Gaining in importance are church groups throughout the South as well as residents in Texas and California, the two largest states for aviation insurance. The agency's client roster stands at 2,800 and--in addition to many Fortune 500 jets, --includes two U.S. senators, a number of professional baseball and football players, former Professional Golf Association President Deane Beman, and the charter aircraft of an NBA basketball team.
"The age of our insureds ranges from 16 to 89 years, and we have a 98% retention rate," says Wenk. "They include owners of small single engine aircraft (Pipers, Cessnas or Beechcrafts), a number of brewing companies in the Milwaukee area, and the many jets of Scott Air Charter, a leading Midwest charter operation." He adds that many of the agency customers are former airline pilots who, upon retirement did not give up flying and subsequently acquired their own planes.
In noting the 2% non-renewal rate, he explains that as some pilots get old they often turn in their planes for boats, a recreational activity that is more calming. "But they often remain our clients, since we are able to offer them marine insurance for their new crafts." That is one of the lines handled by his son, who, while having a pilot's license, is not as interested in flying as his father or sister.
Attention to detail also plays a major role in the agency's excellent retention rate. This includes opening the office daily at 6:30 a.m., providing a round-the-clock emergency telephone number, sending all clients quarterly aircraft safety bulletins and useful Christmas gifts. Another Wenk-only feature is the aircraft rating system, including pilot history stored by "N" number, name or billing number, and unique underwriting features for pilots requiring life and medical insurance.
The claim adjusting procedures also are geared to the client's needs, and claim payments up to $5,000 can be handled on the spot. "Our long-standing relationships with many of the carriers allow us to adjust minor hull and property claims without delay and without an adjuster," says Wenk.
The company obtains its business through referrals and, recently, via Internet recommendations. That's in addition to Wenk and his daughter's flying throughout the Middle West scouring for new clients. "Also important," says Wenk, "is our longevity. While we may be a mom-and-pop operation (his wife is also a licensed pilot, a member of the 99s, a women's flying group, and has flown in the Powder Puff Derby), we know our business. Not only do we provide insurance, we are also in a position to advise clients about aircraft and what to consider when trading up."
A typical policy can provide coverage for such items as air cargo, aircraft hull and liability, aircraft spare parts, airport owners/operators liability, charter operations, corporate aircraft, FBOs (Fixed based operators), helicopters, pleasure aircraft, and workers compensation. In placing its business Wenk deals with all of the major aircraft insurers, of which there are about a dozen. "We try to get the best possible premium price for our clients," he says, "and go to all the writers, the two large pools--U.S. Aircraft Insurance Group and Associated Aviation Underwriters--as well as such companies as American International Group, Ace Group, Old Republic and Intercargo (XL Capital) and Houston Casualty Companies.
"Another reason for our excellent renewal rate," says Wenk, "is that when a policy comes up for renewal, we visit all the writers and try to get the client the best possible price and coverage, rather than just automatically renewing the coverage."
Wenk is optimistic about the future of the business. He cites such factors as the continued strong economy and growing affluence of the population, the steady upgrading of aircraft by the major manufacturers, the shortage of used aircraft, and the recent decisions by Cessna, Piper and Beech to once again produce single-engine piston aircraft after production had been halted for some years. "With many people choosing to fly by themselves, the production of modern single engine planes for the neophyte flier must be regarded as a most positive industry development," says Wenk.
In looking at a more affluent population, Wenk points to the growth of fly-in communities, especially popular in the Mid- and Southwest, as well as other parts of the country. "More and more people are looking to live in these communities which they can reach with their own aircraft, and where they are able to hangar those aircraft," he says. "This is becoming a steadily growing part of our business."
The good feeling and optimism about the growth of the aviation industry and aviation insurance also was seen at the recent meeting of the National Business Aircraft Association (NBAA) where many attendees indicated that things were "going great!" Wenk added.
For his part, he notes that based on excellent January business, 2000 appears to be shaping up as a record year for the agency. In this highly specialized market, the company with its knowledge and experience, and close ties to its customers is in an excellent position to prosper in the 21st Century.
Snoopy would be proud to have a drink with the staff of Wenk Aviation. *
©COPYRIGHT: The Rough Notes Magazine, 2000