The Wholesale Insurance Group offers a
wide array of specialty insurance
By Phil Zinkewicz
Gary R. Scarbeau, CIP, is vice president of The Wholesale Insurance Group (TWIG), a subsidiary of The HUB Group (Ontario), Inc.
Retail independent insurance agents and brokers are seeing the very beginnings of a hard property/casualty insurance market. It's not likely that we will see anything like the years 1984-1985, when insurers pulled back drastically from writing most classes of business, severely restricted contract conditions, and raised premiums often to skyrocket levels. Nevertheless, after more than a decade of soft market conditions, insurers are now re-evaluating their pricing structure on particular types of business as well as tightening terms and conditions of coverage.
The situation is not exactly the same in Canada. While the soft market in Canada has been going on longer than the traditional "three-year-on, three-year-off" cycles of the past, it goes back only about eight years. However, for at least the last 18 months, Canadian insurers and re-insurers have been pulling back a bit, and all signs point to a much harder market than before.
During times such as this, wholesale brokers start positioning themselves to take advantage of hard market conditions, exercising their particular talents to find new markets when traditional markets dry up and to set up programs that will satisfy those markets' appetites--in short, satisfying both retail agents and companies.
The Wholesale Insurance Group (TWIG), based in Canada, is one of those brokers poised and ready to grow. TWIG is a subsidiary of The HUB Group (Ontario), Inc., part of the rapidly growing HUB International family of companies. It is one of the largest independent wholesale distributors of a broad range of specialty commercial insurance products in Canada. Formed in January 2001 from a consolidation of three established wholesale entities, TWIG operates under the leadership of Gary Scarbeau, a 25-year veteran in the insurance industry. His area of expertise is commercial lines underwriting. In his years of service with various insurance companies, Scarbeau has also been involved in product development and building underwriting departments, structures and disciplines.
"Whether in a hard or soft market, there exist gaps in the market that will require innovative solutions that we, here at TWIG, will strive to fill."
--Gary Scarbeau
"TWIG's fundamental mission," says Scarbeau, "is to offer product solutions to our retail brokers and to facilitate those business requirements by acting as a means to reach various key underwriting markets." And, while he envisions prosperity for TWIG now that the market seems to be hardening, he maintains that the wholesale broker's function remains the same regardless of market conditions. "Whether in a hard or soft market, there exist gaps in the market that will require innovative solutions that we, here at TWIG, will strive to fill. Our aim is to satisfy the retail agent and broker needs while delivering quality underwriting products to insurance company markets."
Gary Scarbeau (seated) confers with Tim Currie, BA, AIIC, who is executive vice president of The HUB Group (Ontario), Inc.
The Wholesale Insurance Group itself comprises several subsidiaries acquired by HUB over the years, but which now fall under the umbrella of TWIG. "We wanted a catchy name that was easily identifiable," says Tim Currie, executive vice president of HUB Ontario. "Now that we have taken all of our wholesale operations under one group, the acronym TWIG seemed to fill the bill."
To understand the broad array of products offered by TWIG, following is a brief summary on some of the specialty units within the group:
* KMS Insurance Services, Ltd., was established in 1982 in response to the varied requirements of the broad range of insurance brokers who needed alternative markets. KMS' main specialty is to assist the retail broker force with the hard-to-place property risks. Brokers who may be having difficulty placing the account due to one or more factors (such as age, location, occupancy, construction, loss history) look to KMS to provide them with insurance for their valued client. In addition to their extensive property capabilities, KMS also offers a market for certain liability classes of business such as roofing contractors, welders and general liability wholesalers and manufacturers.
* Canadian Block Managers specializes in "block" insurance. Says Scarbeau: "Block insurance is an important insurance industry term specifically designated for the luxury trades, such as jewelry, furs and fine arts. These businesses require highly specialized knowledge and expertise. Most insurance companies can't dedicate their full resources to this class of business, which created the need for Canadian Block Managers, Inc."
* Knox Vicars McLean Special Risks offers a trust fund protection plan (TFPP), which is designed to protect trust funds, such as pension and welfare funds, trustees and other persons responsible for such funds. The program includes legal liability (including defense costs) for bodily injury or property damage caused to third parties by the trust fund and/or trustees. It also provides legal liability coverage for personal injury such as libel, slander, false arrest, wrongful entry or eviction and invasion of rights of privacy. In addition, the program is flexible enough to provide other custom-designed coverages as required. This TWIG unit also has designed a program specifically for the protective services industry, including: security guards, surveillance patrols, guard dog services, private investigators, monitoring stations, locksmiths, burglar and fire alarm installers, sprinkler contractors, alarm inspection and maintenance, manufacturers and distributors of security products and telephone answering and paging services.
But that's not a complete list of the products offered by TWIG. The group also offers environmental damage liability, which insures against liability arising out of in-ground and above-ground fuel storage tanks. And, TWIG has programs for garage and service stations, Canadian asbestos abatement contractors and entertainment-related risks.
"We've had the expertise to operate in all these areas for years," says Currie. "But we wanted to bring all the HUB members that had been acting independently of each other under one roof. We wanted to develop a common culture that was more sales-driven. Ultimately, we want to set the standard for wholesale service in Canada."
Currie and Scarbeau emphasize that the retail agent and broker is TWIG's primary audience. "We want to get the message out that we're here to serve the broker's needs, whatever they are," says Currie. "We don't have contracts with brokers. We demand no volume commitment. We respond to each request on an individual basis."
"As part of our sales efforts," adds Scarbeau, "we are actually going out to meet with brokers at their locations, to ask them what they need. Of course, we can satisfy their short-term needs such as finding markets for specific niche products. But we want to know what agents and brokers need in the long term. For example, we want brokers to tell us where the next market gap is going to be--the next asbestos abatement problem, for example. We believe in taking a proactive stance with our retail agents and brokers. In addition, we are revamping our technology to make it easier for agents and brokers to communicate with us and do business with us."
As an example of how TWIG can design products to fill a gap, Currie mentioned the group's labor liability program. "We've done work with a good many labor lawyers and, in our discussions with them, we realized that there was a gap in the liability coverages they had," says Currie. "So we designed a program just for labor leaders."
The program offers:
* Legal liability (including defense costs) incurred by the labor organization, its officers and representatives, due to specific wrongful acts committed while carrying out their duties. "For example," says Scarbeau, "if the insured violates the organization's by-laws resulting in a claim against them or the organization, then, subject to its terms, the policy will respond to defend and pay any judgments or settlements."
* Legal liability (including defense costs) for bodily injury or accidental property damage caused to third parties by the labor organization.
* Legal liability (including defense costs) for personal injury including false arrest, malicious prosecution, libel, slander, wrongful entry or eviction, invasion of privacy and wrongful dismissal.
"In addition," says Scarbeau, "the program provides protection against losses caused by dishonesty or fraud by employees or officers of the labor organization, payment of benefits in the case of accidental death or dismemberment to one of the officers or employees, and insurance coverage for physical damage to the buildings, premises and contents owned by the labor organization."
Adds Currie: "We've spent the last year bringing our wholesale operations under one roof. Now, with Gary Scarbeau, his expertise, our new unified approach and the emerging hard market, we see tremendous opportunities for further growth." *
For more information:
Phone: (800) 837-2592
Web site: www.thehubgroup.com