By Dennis Pillsbury
Larry France, editorial director of The Insurance Marketplace, holds both an early edition of the publication (at right) and the current edition, which has been expanded to include an International section. Behind him is a replica of the first issue of Rough Notes, published in 1878.
In response to requests from agents and brokers, the 2001 edition of The Insurance Marketplace (IMP) added markets available in Canada and other international locations. "We've had requests for specialty markets for wineries in Australia, motorcycle insurance in Hungary, and shrimp farms in Mexico, to name a few," notes Larry France, editorial director of IMP. "It became clear that the globalization of the economy over the past few years necessitated our expansion into this area in order to provide the best service to our agent and broker users."
IMP is an annual specialty markets directory that has been published by the Rough Notes Company since 1963 and is provided to subscribers of the magazine free of charge. It is distributed with the December issue of the magazine. ACORD also distributes the publication to its membership with the November publication of inACORD. In addition, 10,000+ copies of the printed publication are distributed at conventions, user group meetings, and trade conference. All told, more than 80,000 copies are distributed throughout the year. It also is available on line free of charge and is free with the Rough Notes Agency CD Rom and on SilverPlume CD Rom.
IMP provides listings for more than 630 categories of specialty lines coverages, each of which is defined in the directory. Agents also can find markets not covered in IMP by calling, faxing, or e-mailing free of charge. "When agents call in, they speak to a real person who can help them find the right category for a particular risk and will also help them better define a particular risk so they approach the correct markets," Larry points out. "We provide the same service to agents who use our free e-mail or fax service. Agents need to understand that not all markets are available in all states. Identifying in which state the risk is located is very important. Also in today's electronic age, a phone number is still a good idea. If a request does not fit into any of the categories in IMP, we broadcast via e-mail/fax to markets in our directory to see if any have any interest in placing coverage for those inquiries. If we receive a number of e-mails or phone calls looking for a particular market, we add that category in the next edition of IMP." New categories that were added in the 2001 edition include Internet Promotions, Phone Card Promotions, and Media Promotions.
Walt Gdowski, president and chief executive officer of The Rough Notes Company, points out that e-mails from agents "are not used to develop a list. Our Web site as well as the printed version of IMP is free. No membership, password or ID number is required to access the markets. When we send information on markets to agents interested in writing a particular specialty, we don't send that agent's e-mail address to those markets or use it to market our own products. We respect the agency's privacy. This is a service we developed to help both the agents and the advertisers who have been instrumental in our success. We act as a conduit between the agent and the specialty markets." He continues that "we're working on enhancements to The Insurance Marketplace service where agents can elect to receive e-mails about new programs and other market intelligence. Again, this service will be free for both the agents and the advertisers. We are focused on helping our agent readers to better understand the specialty marketplace and to access those specialty writers who can help them provide needed coverage to their clients. We've been serving the independent agency system for 123 years and developed IMP out of the knowledge and understanding of agents' needs those years of experience gave us."
Jerry Roush of Roush Insurance Services, Inc., Noblesville, Indiana, says that his company gets "about $800,000 to $1 million a year in new business from being listed in Insurance Marketplace. More than 90% of new agents as a result of our advertising in IMP and Rough Notes. Those are the only places we advertise," he continues, "because we consider those publications to be the best ones out there." Roush Insurance Services is an excess and surplus lines broker operating in Illinois and Indiana on an admitted and non-admitted basis.
Craig Rubin, vice president of Swett & Crawford, Woodland Hills, California, says the E&S broker receives "at least three or four inquiries a day that we can tell were initiated from our being in Insurance Marketplace. The quality of submissions we get is generally very good, he continues, adding that, "I would guess that 40% of the inquiries we get at our Web site were initiated because of our advertising in IMP or Rough Notes. The cost is very low considering the amount of traffic that is generated."
In addition to disseminating 80,000 hard copies of IMP a year, "insurancemarketplace.com receives more than 50,000 hits a month on average and more than 40,000 views," according to Walt Gdowski. "And this doesn't include hits from other Web sites and CDs. roughnotes.com receives 384,000 hits a month and we know that a number of these link to IMP from there."
Another important factor in the success of IMP is the emphasis on accuracy of the listings. "Information comes from questionnaires received from the insurance markets, and we ask them to make certain that it is accurate as respects availability of the specialty," Walt says. "Of course, as retail agents know, what a company wrote yesterday may not be available today, but Larry polices the market regularly to make certain IMP is as accurate as possible." He adds that "since he (Larry) took over in 1998, IMP has grown immensely and the accuracy of the listings has gotten even better. Thanks to his efforts, it has continued to be the largest and most comprehensive directory of specialty lines coverages in the industry." Walt continues that "Larry brings to the table more than 30 years of experience in the insurance industry, with 10 of those in specialty lines." Larry is a licensed agent and has maintained that license for 33 years. He also is involved with specialty lines organizations, including AAMGA, NAPSLO and PLUS. "His activities, including attending meetings of those organizations and fulfilling the continuing education requirements to maintain his license, allow him to keep his finger on the pulse of the specialty lines marketplace."
Walt concludes, "The Insurance Marketplace was developed with the understanding that agents need to keep their expenses at a minimum. It is a free service to agents and always will be. Many of the dot com companies that have attempted to provide this type of service either charge a monthly subscription fee or want a fee on each transaction. We don't believe that this is a model that best serves the needs of the agent."
Larry France concludes that IMP "will be an even more valuable resource in the upcoming hard market," but cautions agents that they "need to establish relationships with markets now. MGAs need to protect the insurance markets with which they deal and they do so not only by underwriting the risks, but by underwriting the agency as well. The MGA needs to understand how each of its retail agency partners does business and be comfortable that the retail agency understands the MGA's needs and underwriting philosophy. Retails agents also need to determine what the financial arrangements will be ahead of time and check the insurance laws and regulations to determine whether they can even receive a commission or fee for placing the business." He cautions that some states require the retail broker to have a surplus lines license in the state where the business is located in order to receive a commission split with the MGA. However, the agent may be able to charge a fee if that is permitted. *
By Alice Ashby Roettger
Larry France points out that"... the globalization of the economy over the past few years necessitated our expansion into this [international] area. ..."
The Insurance Marketplace first appeared as an insert in the September 1963 issue of Rough Notes. The brainchild of Assistant Editor Wallace L. Clapp, it was conceived as "a marketing guide for non-standard coverages, including independently developed package policies, specialty forms and insurance for hard-to-place risks. . . . developed at the request of numerous subscribers as a directory of companies writing nonstandard coverages that are analyzed in the PF&M Analysis Service" (another Rough Notes product). "Today," Larry France emphasizes, "IMP is a specialty, not a substandard, directory. Aviation risks, for example, are specialty risks regardless of whether we are in a hard or soft market."
In an early edition of IMP, Clapp explained that agents become frustrated when they are unable to furnish an exact product or service that their customers desire or "when companies in [their] office are unwilling to write certain classes of business ..." At one time, foreign markets, primarily Lloyd's, were the only resource for specialty or surplus coverages. For example, D&O insurance was handled only by Lloyd's.
However, by 1963, licensed domestic insurers had become capable of filling almost any need for hard-to-place risks. According to a PF&M survey taken around that time, the surplus-specialty markets were growing rapidly and "facilities are available for the producers who wish to use them." The
greatest growth in hard-to-place coverages had occurred among the companies that were usually represented by the average agent (70%), rather than those dealing primarily in excess and surplus lines or exclusively in specialty lines. Many factors contributed to this, among them (1) the entry of companies into the E&S field, thus building up their premium volume; (2) the development of a multiple line approach which created a demand for specialty coverages; (3) the growth of umbrella liability; (4) an increase in mergers and thus an increased willingness to enter the specialty market; (5) less state regulation in the E&S field; (6) growth in domestic reinsurance markets, and (7) stricter underwriting which caused more companies to write hard-to-place coverages at a higher rate. The non-standard, excess, surplus and specialty markets had effectively been blended into one field known as specialty lines.
Despite their growing sophistication in meeting the needs of their clients, agents didn't know exactly what specialty coverages existed, let alone where to obtain them. Clapp envisioned creating an agents' directory--one that would describe available coverages (the only insurance marketplace publication to do so to this day) and list the companies providing those coverages, along with related ones.
The first Insurance Marketplace (IMP) insert contained 103 listings of coverages. By 1966, IMP had become a separate publication, going out to all Rough Notes subscribers free of charge and to non-subscribers for a shipping-and-handling charge only. At that time, listings had grown to 156. As the specialty lines market grew, general listings soon separated into specialized categories. Also appearing in those early issues of IMP was a hint of the future explosion in tech products for computer-related coverages. Data processing equipment and data processors E&O were the original two categories.
Another Marketplace goal was to remain sensitive to the evolution of and the volatility of the specialty lines market and to educate agents about those changes. Not only do companies come and go, but so do coverages. Contact lens insurance, one of the early entries, no longer exists as a separate coverage. Another example is amusement park coverage (for which there are 60 markets listed in the current edition)--13 companies came and went during IMP's early years. IMP's descriptions of ever-changing coverages is used by many agents as a tool to train their employees.
The advent of the Internet and the prospect of being able to communicate even better with agents, as well as to link them to insurers, brought about the next step in IMP's evolution as a service vehicle. Along with Rough Notes magazine, The Insurance Marketplace went online in 1995, providing a direct link to advertisers' Web sites in addition to its descriptions of coverages and lists of companies--
all free.
France became IMP's editorial director in 1998, succeeding Wallace Clapp.