Reina Gregorio, president of Kemper's Professional Liability division and John (Jack ) Kuhn, president of the Financial Solutions division.
--Reina L. Gregorio, President, Kemper Professional
Over the last several years, Kemper has undergone a significant number of changes. The company has added specialty lines of business to move itself away from its role as a traditional property/casualty underwriter. Jack Kuhn, executive vice president in charge of Kemper's Financial Insurance Solutions division, notes that numerous new business units have been formed in the last three or four years.
The company has been "redefining itself over the last few years," says Reina Gregorio, who was recruited to start up Kemper's professional liability division. That division was "started from scratch in 1999," according to Gregorio, who was brought in at the time to serve as president of the division. She now is executive vice president in charge of professional liability in a newly formed entity that puts professional liability, financial insurance solutions and surety under one corporate umbrella, AMPICO (American Protection Insurance Co.), with Gary Tully serving as president of AMPICO.
Gregorio joined Kemper from a major professional liability writer and brought with her a team of professional liability specialists. "The Kemper brand and financial stability was extremely attractive," she says in explaining her decision to join the company, continuing that the company was offering the opportunity "to offer multiline capabilities through the agency platform. My previous company had a lot of distribution conflicts. That was very difficult for producers."
Reina Gregorio, president of Kemper's Professional Liability division, came to Kemper because of the opportunity "to offer multiline capabilities through the agency platform."
She continues, "We've really been able to identify pockets of opportunity built around the agency distribution system. This is one-stop shopping delivered through agents. Although Kemper-appointed agents are our primary distribution source for most lines of business, we do entertain wholesale relationships as well, principally for nonadmitted, open brokerage products. While we have no current MGA relationships, we do entertain affinity marketing programs at the retail level."
The professional liability division is organized around industry segments, with dedicated resources focused on each of three key areas--design professionals, affinity marketing programs (including allied health care) and specialty E&O--the latter encompassing the more traditional miscellaneous, lawyers, accountants and real estate professionals. "This gives us a much keener customer focus," Gregorio points out. "Over the long term, we are convinced this approach will lead to greater profit."
Kemper has brought in underwriters and claims people who are experienced in each of the major disciplines. "Kemper has made a very significant investment to assure a quality, long-term commitment to this field. We believe this is the right way to build a solid professional liability book."
Gregorio adds that Kemper is "considered an experienced alternative to other professional liability markets. We've managed to escape being viewed as a start-up because of the company's long established relationships in the marketplace and the fact that it brought in a team of experienced people who are well known in the professional liability community."
Jack Kuhn, who was part of a team that set up Kemper's Financial Insurance Solutions division in November of 1999, says, "We've built up a staff of 45 experienced people in a decentralized structure with eight field offices around the country." The division provides D&O, EPLI, fiduciary liability, crime insurance, representations and warranties liability and tax opinion liability coverage. "Kemper did not have any of these capabilities." Kuhn adds that the product offerings are being built around Kemper independent agents, the big brokers, and wholesale brokers and agents.
Jack Kuhn was part of a team that set up Kemper's Financial Solutions division. He now serves as its president.
"We're looking to earn our way into the market, not burn our way. We're not going to compete for the primary on large accounts based on price," Kuhn says. Kemper is also looking to get into the middle market, where many companies are uninsured or underinsured in the D&O area. He continues that the secret to approaching the middle market is to identify the "primary driver. In this market, employment practices is the driver." This is a key market for many independent agents. Kuhn says, "Agents have been very excited about our entry into the market. They've been waiting for Kemper to add these capabilities to what the company already offers."
Kuhn and Gregorio also point out that Kemper's entrance into these markets at this time was propitious. A couple of major players have been taken out of the field due to financial difficulties or mergers. Producers want to have another major company in this arena. This is particularly true in the D&O area, Kuhn explains, because "a lot of clients are beefing up their insurance programs due to concerns over the size of securities claims." Recent court decisions and settlements in this area have created a stronger demand among companies that are looking to go public. Kemper provides coverage for public and private companies as well as specialized solutions for financial institutions and not-for-profit organizations.
Returning to the merging of the three units into one corporate entity, Gregorio says she is "very excited about the opportunities this will provide. We're seeing a blurring between the lines of traditional bodily injury/property damage and economic loss. We're in the process of developing integrated products so solutions to these exposures can come out of one company with expertise in all the appropriate areas."
Kuhn adds that there is a strong "strategic fit within the three divisions. We believe we may very well be the first to market with such a broad array of products for these increasingly important concerns."
One of the real advantages of the long-term approach, Gregorio points out, is that the team is in place from the beginning. "Kemper has brought in experienced underwriting, actuarial and claims people. They've been involved in marketing and product development so we're really bringing products and services to market that have been developed by experts who know and understand what is needed."
She concludes by pointing out that "whether we like it or not, insurance has become commoditized. The real differentiation between companies is the service they provide and, oftentimes, that only happens when there is a loss. We've brought in some of the best claims people in the business to make certain that this is as positive an experience as possible." *