R. Bruce Livingston (center), CPCU, AIC, serves as president of Professional Underwriters. His team includes (left) Mark R. McCrary, ARM, AIC, director of marketing, and (right) John A. Solari, CPCU, ARM, Professional Underwriters' chief underwriting officer.
What does a smart, forward-thinking company do when it has developed a particularly strong suit over time that can propel it into becoming a nationally recognized player in niche insurance markets? They take it and run with it.
The ball carrier in this case is Professional Underwriters, a Wayne, Pennsylvania-based hybrid company that acts as managing general agent for its own specialized insurance programs while also providing underwriting services for other clients. The strong suit in this case is underwriting expertise and experience.
Professional Underwriters has evolved since its formation in the early 1980s from an underwriting services provider for a pair of group captives comprised mostly of eastern Pennsylvania and New Jersey retail agents in what was then becoming a hard market for commercial middle market P&C business. Along the way, Professional Underwriters expanded into the programs arena where their underwriting and policy issuance services began to be used by agents, MGAs, insurers, and reinsurers. They were acquired by Bermuda-based Mutual Risk Management (MRM) in 1996 and broadened their knowledge about how to run specialized programs and find coverage for hard-to-place risks while continuing to develop strong underwriting expertise in a variety of business segments.
Now, Professional Underwriters has three of its own specialty private label insurance programs two of which have been developed in the last year with all three being marketed regionally and nationally to retail insurance producers. Professional Underwriters currently manages approximately $175 million in annual premiums.
"Historically, we have looked at ourselves as providers of underwriting services," says Bruce Livingston, president. "Make a portfolio perform and make it profitable--that's what we did best. We've always been a company of underwriters, but it's usually been for somebody else's program. It was always somebody else's deal and it's hard to drive one's own destiny in that type of scenario."
Other members of the Professional Underwriters team are (left to right) Cole Henry, CPCU, AU, executive vice president-Special Accounts; and underwriting managers Patrick J. Bethel and Robert P. Battaglia, CPCU, AAM.
The game has changed dramatically for Professional Underwriters in recent years. With its expanded capabilities, Professional Underwriters is thinking sales and marketing these days and is beginning to emphasize growth of its own programs equally with marketing of its underwriting services, Livingston explains. Since he took over the reins as president last February, "The culture change I'm trying to influence is that it's okay to be a great underwriting company and a sales-oriented company at the same time," Livingston says.
"We now see our destiny to be a super MGA and an outstanding underwriting services provider where we take the expertise we have in-house and create programs that build on that expertise, get them filed properly and pull together the advertising and marketing aspects. Then we go out and sell them to the many agents and companies that can benefit from our products and services."
It has rolled out two new full-service insurance programs over the past year: Hard Hat, for construction contractors, and Samaritan, for social service organizations. Professional Underwriters is looking to partner with insurance agencies handling specialty lines of business that can set the table for even more private label program offerings in the near future, Livingston says.
Its newest brand label programs are modeled, with a few variations, after its existing Public Entities/Schools program started about 10 years ago for municipalities and the various types of tax-supported agencies such as school districts, colleges, fire protection districts and township governments. More than 100 governmental entities and 300 school districts, currently participate, generating some $40 million in premium,
Bruce Livingston believes that "it's okay to be a great underwriting company and a sales-oriented company at the same time."
Professional Underwriters acts as the "one-stop shopping" MGA for all three programs in providing the insurance carrier, underwriting management, reinsurance, policy issuance and loss control services. If desired, the agent can even assume a portion of the risk by investing in Great Alliance Insurance Ltd. (GAIL), Professional Underwriters' captive.
"Our Hard Hat, Samaritan, and Public Entities/Schools programs are currently writing business in industry segments where other carriers are pulling back or retrenching," says John Solari, chief underwriting officer.
Among other classes, the Hard Hat Program provides coverage for excavation contractors, utility contractors, and steel erection contractors, with Legion Insurance Co., whose common parent company is MRM. By leveraging its underwriting expertise as a service provider to other construction programs, Professional Underwriters brings that underwriting talent and its other capabilities to the table, Solari says.
In addition, "Because we're new, we don't find ourselves saddled with a lot of business that was previously under-priced and, as such, we have no baggage on prior books of business that had not been performing," according to Solari. This allows them to price the coverage properly and not have to make up for years of developing loss experience by arbitrarily charging higher rates, he says. Consequently, in the stiffening market for construction insurance, "we can be selective in what we want to write, where we want to write and get an adequate rate in today's insurance marketplace."
Samaritan, formed in mid-1999, is cut from the same mold as Hard Hat: a strict underwriting program for preferred risks that seeks to provide value beyond that traditionally offered by carriers targeting this class. Professional Underwriters acts as the MGA and has brought in a seasoned team of underwriting professionals with many years of experience underwriting social service organizations, says Patrick Bethel, underwriting manager for the program. Bethel points to their approach to loss control in Samaritan as an example of the value they seek to provide. "We call it 'risk improvement,'" he says. "We ask the social service organization what can be done to make the account better. We may help them do building appraisals so they insure to value. We may help them do driver training, employee screening or life safety audits. Every account we insure, no matter how small, gets touched by us in some way from a risk improvement standpoint."
Agents will experience a user-friendly system that allows easy access and promotes long-term relationships, according to Professional Underwriters. "We try to make it as easy as possible for agents to do business with us," said Mark McCrary, director of marketing. "We're not going to give them a minimum of business they must produce with us in a certain amount of time. We prefer that the agent likes the program and finds it easy to do business with us rather than say to them 'you have to give us $500,000 or $1 million in business the first six months or we'll cancel you.'"
One of the best ways for agents to access Professional Underwriters information and its programs is through its fax-on-demand service. It can be accessed 24 hours a day to provide agents with a wealth of available information, including eligible classes, faxed to them in a matter of minutes, says McCrary. *
The author
John Maes is a Chicago-area freelance writer.
Professional Underwriters' private label insurance programs--Hard Hat, Samaritan and Public Entities/Schools--provide a comprehensive platform of services intended to meet the needs of specialized industries.
Here's a look at how each of them works:
Hard Hat: Specially designed for medium to higher hazard construction contractors, the program includes an array of coverages that include general liability, commercial auto and property, equipment coverages, builders risk, installation floater, umbrella liability, commercial crime and boiler and machinery/equipment breakdown.
Tied in with the coverages is an aggressive loss control program in which Professional Underwriters' specialists help the contractor set up on-site self-inspection programs. They also participate in "toolbox" safety meetings at the job site and in the planning of all phases of the construction project, addressing safety issues along the way. Preventive maintenance for equipment and equipment transport procedures are also evaluated.
Samaritan: The program is aimed at social service organizations such as group homes for the mentally retarded and developmentally disabled, associations for the handicapped, transitional living facilities, volunteer organizations, missions and shelters along with community centers, to name a few of the many classes.
The program's coverages include: commercial property; workers compensation; commercial auto; general, professional and directors and officers liability; umbrella liability; and accident and health coverage to cover volunteer workers for medical and disability costs. Abuse and molestation coverage against allegations of physical abuse or misconduct, along with crime, new weather coverage, and boiler and machinery coverages are also available.
Risk improvement services are brought in to help client organizations enhance employee safety, develop emergency and crisis response programs and assess liability risk for premises and auto fleets.
Public Entities/Schools:
Municipalities, school districts, township governments, fire protection districts, water and sewer authorities, higher education institutions (colleges and universities) and other tax-supported agencies are covered under this program.
Written through "A+", admitted companies, it includes general and professional liability coverages as well as inland marine, boiler and machinery, and workers compensation. Crime, commercial property and auto, directors and officers liability, umbrella liability and employment related practices liability are also available.
Other coverages available include fire department service charges; pollutant cleanup resulting from an accident; extra expenses during repairs; ammonia contamination; newly-acquired property; personal effects; valuable papers; accounts receivable; off-premises property floater; premises power failure; change in temperature and humidity loss; and extra expenses.
A number of risk management services are also part of the program. Risk evaluation surveys, property appraisals, monthly safety newsletters, memos on emerging risk issues, phone consultations and video loan library access are included. Also, safety award programs and seminars, asset inventories with annual updates, security audits, facilities planning and playground safety inspections.
For more information:
Professional Underwriters' fax-on-demand service number is: (800) 750-9125. Its Web site is: www.puc-mrm.com