SPECIALTY LINES MARKETS
"It's not a hard market; it's a market in crisis."
By Larry G. France
That is the way Julian James, director of the Lloyd's Worldwide Markets Division, described today's insurance climate at the AAMGA (American Association of Managing General Agents) Annual Meeting in Boca Raton, Florida. That phrase certainly fits the long-haul trucking market. The market or number of carriers or MGAs that have the ability to place coverage has declined over the past 10 years. The number of questionnaires that stated, "We no longer write this class of business," was the most ever received by Rough Notes.
The "thinning of the herd" may be a good thing overall. The remaining market is still up and running because the players focused on profit and placed a priority on underwriting. The market is not softening; it is just not seeing the 25% rate increases of the past two years. A major fear is that someone will enter the market and try to buy the business, which will destroy all the prudent measures put into place in the past.
Jerry Ferguson, senior vice president of Occidental Fire and Casualty, states that he feels "that the long-haul trucking market will hold its current pricing firmness for the foreseeable future if the slowly returning former markets will recall their own past unprofitable experience and govern their new pricing accordingly."
Ferguson says that history would support the fact that some carriers have a short memory of their ineptness in pricing their product prudently and sometimes come back in the marketplace following the perfume of the premium. "We hope that these re-emerging markets have learned their lesson and will be responsible, which is ultimately in everyone's interest."
The opinion is that pricing is somewhat stable and future entries in the marketplace are today's standard.
"The marketplace is allowing only normal rate increases at renewal versus double digit in the 20% plus," says Doug Hathaway, vice president of Transportation for Swett & Crawford. Hathaway comments that long-haul trucking accounts are operating under less distressed economic conditions and are beginning to find more opportunies to increase transport rates. "Expect recent firming of prices to continue with more MGU-driven programs to enter the marketplace as reinsurers gain more confidence in tracking facilities."
New laws concerning drivers' rest time will go into effect January 4, 2004. The Federal Motor Carrier Safety Administration made changes to the Hours of Service rules for truckers in the United States--the first since 1939.
David Goodwin is the national director of Safety & Training Services for Markel Insurance Company of Canada. This department provides fleet loss control advice and corporate and driver training to policyholders and other clients. Goodwin also is national director of Markel Professional Transport Training. This wholly owned subsidiary of Markel Insurance has operated its own fleet of tractor-trailers for the purposes of driver and corporate training since 1988.
Goodwin says that the new rules are easy to understand and enforce. "They move drivers toward a 24-hour circadian rhythm, closer to the body's natural clock. While the maximum On Duty time has increased from 10 to 11 hours, mandatory Off Duty Rest Time for drivers has also increased by 25%. By replacing the old eight-hour off-duty break with the new mandatory 10-hour off-duty hours, drivers might actually be able to manage eight hours of uninterrupted sleep. The new rules should still help to promote highway safety between Canada and the United States. The rules are not identical to the current Canadian HOS, nor are the proposed changes coming down the pipeline next year. The new legislation fell short of mandating On-Board electronic recording devices, 'Black Boxes' if you will, which is long overdue and needed in the trucking industry."
Goodwin says that rest breaks and team driver operations will require change and better management. Drivers will no longer have the luxury of logging off duty for three or four hours while trailers are unloaded at a time convenient to shippers. Small fleets, particularly those in long-haul operations, will have the hardest time adjusting and running legally, as their costs of doing business will increase. The best carriers proactively address unrealistic shipper demands and scheduling practices. Some, according to Goodwin, already conduct regular driver health education and fatigue awareness programs to reduce fatigue while still maintaining a reasonable level of productivity from their fleets.
From Markel's perspective, the seven most common problem areas for heavy trucking fleets today are indifferent management, poor dispatch control, unprofitable revenue sources, poor driver retention, lax vehicle maintenance and replacement policies, ineffective management systems and a lack of basic benchmarking. "Controlling internal costs is the key," says Goodwin.
The new rules should hold down fatalities and driver and passenger car injuries, but be forewarned that the more time it takes to go between point A and point B, the more cost will be tacked onto the product that is being delivered. But--that is the trade off.
In order to make available the greatest number of resources to agents, brokers, risk managers and all of our readership, The Rough Notes Company has placed on its Web site (www.roughnotes.com) the names of several professional insurance industry associations: AAMGA (American Association of Managing General Agents), NAPSLO (National Association of Surplus Lines Offices), PLUS (Professional Liability Underwriters Society), and CIWA (California Insurance Wholesalers Association). These associations represent groups of professional MGAs, program administrators, surplus lines brokers, professional liability underwriters, and wholesalers who abide by a code of ethics, encourage education of their members, and influence legislation that affects our industry. By clicking on the specific icon, you can go directly to its individual Web site. This gives you a list of members in your area who can assist in providing markets for your clients. Be aware that these are not "sub-standard" markets. You will need to approach them in the same manner that you would when obtaining a carrier contract. It is all about building a long-term relationship.
The following responded to our survey and indicated that they are a market for long-haul trucking. Note the territory and target market indicated for each listing.
Adriatic Insurance Co.
3501 N. Causeway Blvd., Ste. 1000
Metairie, LA 70002
Contact: Joseph E. Taylor
E-mail: jtaylor@adriaticinsurance.com
Web site: www.adriaticinsurance.com
A surplus lines insurer that operates in most states with physical damage limits of $115,000 per vehicle, $150,000 combination; and motor cargo limits of $100,000 per load. Adriatic is rated A.
All Risks, Ltd.
1920 Greenspring Rd., Ste. 200
Timonium, MD 21093
Contact: Kim Fowler, Ext. 3024; Jen Rabold, Ext. 3030
Phone: (800) 366-5810
Fax: (410) 828-5174
E-mail: kfowler@allrisks.comjrabold@allrisks.com
Web site: www.allrisks.com
PA
2555 Kingston Rd., Ste. 250
York, PA 17402
Contact: Jen Weimer, Ext. 1206
Phone: (800) 723-1022
Fax: (717) 600-2291
E-mail: jweimer@allrisks.com
Web site: www.allrisks.com
An MGA/E&S broker that operates in DE, MD and PA with limits of up to $1 million CSI for primary liability coverage. Target markets are produce, steel, lumber and auto haulers. Will not consider hazardous material. Can also offer liability, physical damage, cargo and truckers GL. Carriers are Canal and National Indemnity.
Baldwin Sadler Corp.
654 Enterprise Drive
P.O. Box 7001
Royersford, PA 19468
Contact: Robert A. Baldwin
Phone: (800) 227-9040
Fax: (610) 495-8900
E-mail: marketing@baldwinsadler.com
Web site: www.baldwinsadler.com
An MGA that operates in all states except CA, LA, MA, ME and TX with the following limits: AL $1 million CSL, truck physical damage $250,000, and motor truck cargo $100,000 per vehicle. Will not write dump trucks and Haz-mat. Can offer trailer interchange and bobtail/deadhead liability (group of 10 or more). All carriers are rated A or better.
BAT Insurance Corp.
465 S. Beverly Dr.
Beverly Hills, CA 90212
Phone: (310) 282-0753
Fax: (310) 282-7133
An E&S broker that operates in California with limits of $1,200,000. Can offer cargo. The carrier is National Fire.
Burns & Wilcox Ltd.
220 Kaufman Financial Center
30833 Northwestern Hwy., Ste. 220
Farmington Hills, MI 48334
Contact: Call 800 number for local branch
Phone: (800) 521-1918
Web site: www.burnsandwilcox.com
An MGA/E&S broker operating in all states except AK, HI, MA, ME, NH, NJ, NY, RI and VT with primary limits of $1 million and excess of $10 million. Target markets vary per carrier. Can offer property, GL, motor truck cargo, and physical damage. All carriers are rated A or better.
Central Insurex Agency Inc.
800 S. Washington St.
Van Wert, OH 45891
Contact: Deb Moser, Karen Schmid
Phone: (800) 736-7131
Fax: (800) 736-7026
E-mail: dmoser@central-insurance.com kschmid@central-insurance.com
A general agency that operates with limits of $1 million/$2 million for eligible risks. Target markets are up to 10 power units, binding authority, and 11 to 50 power units. Can offer cargo and GL. Northland is the A rated or better carrier.
Delaware Valley Underwriting Agency, Inc.
420 S. York Rd.
Hatboro, PA 19040
Contact: Rosemarie Stump
Phone: (215) 443-3587
E-mail: stumpf@dvua.com
Web site: www.dvua.com
WV and OH
3768 Teays Valley Rd., Ste. 200
Hurricane, WV 25326
Contact: Jeff Wright
Phone: (800) 362-2907
E-mail: wright@dvua.com
Web site: www.dvua.com
Pittsburgh
Contact: Linda Bobro
Phone: (800) 772-2207
E-mail: bobro@dvua.com
Web site: www.dvua.com
An MGA that operates in DE, GA, KY, MD, NC, NJ, NY, OH, PA, SC, TN, VA and WV with limits of $1 million. Can offer M&C, physical damage, CGL, and umbrella. Canal and National Indemnity are the carriers.
Evolution Insurance Brokers (EIB)
8722 South 300 West
Sandy, UT 84070
Contact: F. Darrell Lindsey
Phone: (877) 678-7342
Fax: (801) 304-5551
E-mail: fdl@eibdirect.com
Web site: www.eibdirect.com
An E&S broker that operates in all states with all limits. Will consider all classes. Carriers are Prime and Lloyd's.
Freberg Environmental Ins.
1451 Larimer St., Ste. 200
Denver, CO 80202
Contact: John Fusie, Diana Pantle
Phone: (800) 377-4152
Fax: (303) 623-8101
E-mail: jfusie@feiinsurance.com
Web site: www.feiinsurance.com
An MGA that operates in all states except FL, LA and MA with limits of $1 million. Target market is truckers with more than 20% hazardous materials or waste. Will not consider explosives or over-sized loads. Can also offer commercial auto liability, pollution, CGL, and cargo. Carriers are Gulf and Arch, both rated A or better.
Gateway Underwriters Agency
755 S. New Ballas Rd., Ste. 130
St. Louis, MO 63141-8713
Contact: Gina Boswell, Bonnie Couch
Phone: (800) 325-7652
Fax: (314) 567-4552
E-mail: regina.boswell@gua-stl.com bonnie.couch@gua-stl.com
An MGA operating in AR, IL, KS and MO with limits of $1 million. Target markets are general commodities and gas haulers. Will not consider hazardous materials. Can also offer cargo. National Indemnity is the A rated or better carrier.
Griffin Underwriting Services
P.O. Box 3867
Bellevue, WA 98009
Contact: Steve Little
Phone: (800) 562-8095
Web site: www.gogus.com
An MGA that operates in AK, OR and WA with limits of $1 million CSL. Can offer auto physical damage and cargo. Interstate Indemnity, Canal, National Casualty, and Western Heritage are the A rated or better carriers.
J.M. Wilson
8036 Moorsbridge Rd.
Portage, MI 49024
Contact: Cathy Baldwin
Phone: (800) 282-8113
Fax: (269) 327-2620
E-mail: cbaldwin@jmwilson.com
Web site: www.jmwilson.com
An MGA that operates in IL, IN, KS, KY, MI, MO, OH, PA, WI and WV with limits of $1 million. Target markets are truckers for hire, fleet and non-fleet. Can offer liability, physical damage, cargo, and GL. Northland, Carolina Casualty, National Indemnity, and Empire are the A rated or better carriers.
Lancer Insurance Company
111 Corning Dr.
Cary, NC 27511
Contact: Jim Eason
Phone: (877) 526-2377
An insurer that operates in all states except HI, LA, MA, TX and WV with limit of $1 million BI and $1 million GL. Target markets are owner/operator, small fleets of 1-9 units, and intermediate and long-haul operations. Will not consider dump operations, logging or Haz-mat. Can also offer auto physical damage and cargo. Lancer is rated A-.
M.J. Kelly Co., Inc.
4415 E. Sunshine
Springfield, MO 65809
Contact: Ivan Jonsson
Phone: (800) 725-7211
Fax: (417) 883-7103
E-mail: ijonsson@mjkelly.com
Web site: www.mjkelly.com
An E&S broker operating in AR, IA, IL, KS, MO and OK with limits of $1 million. Target markets are reefer hauler, box trucks and dry freight. Will not write Haz-mat. Can also offer physical damage, motor truck cargo, and GL. All carriers are A rated.
Markel Insurance Company of Canada
105 Adelaide Street West, 7th fl.
Toronto, ON, CN M5H 1P9
Contact: Gerald LeGrove, Tim Courtney, Rose Oxenham
Phone: (416) 364-7800, Ext. 309
Fax: (416) 364-1625
Web site: www.markel.ca
An insurer that operates throughout the United States and Canada with limits as required by customer. Target markets are brokers, truckers and all ancillary trucking product and service providers. Markel is rated A.
McLeckie General Agency
P.O. Box 770
Naples, TX 75568
Contact: Jason McLeckie, Bill McLeckie
Phone: (903) 897-9090
Fax: (903) 897-0062
E-mail: billmcleckie@juno.com
An MGA/E&S broker that operates in CO, FL, IA, LA, MS, OH and TX with limits as required. Target market is owner-operators to large fleets. Can also offer motor truck cargo and physical damage. Carriers are Lloyd's, Adriatic and others.
Pacific Gateway Insurance Agency
27200 Tourney Road, Ste. 360
Santa Clarita, CA 91355
Contact: Cal Landess, Dat Nguyen, Don Dale
Phone: (800) 354-4844
Web site: www.nationalindemnity.com/PGIA
An MGA operating in AZ, CA, NV and OR with limits of $2 million. Coverages include physical damage and cargo. Various A rated or better carriers.
Prime Insurance Syndicate Inc./I.E.B.S.
P.O. Box 4439
Sandy, UT 84091
Contact: Rick J. Lindsey
Phone: (877) 243-8181
Fax: (801) 304-3702
Web site: www.primeis.com
Prime, an insurer, and IEBS, an MGA, operate nationwide with all limits available. Will consider all classes. Prime is rated B-; Lloyd's is rated A.
RISC Inc.
2001 Bryan Tower, Ste. 2900
Dallas, TX 75201
Contact: Jim Parker, Sherry Macauley, Jody Moraski
Phone: (800) 725-7472
An MGA/E&S broker that operates in TX only with limits of $1 million CSL. Target market is TX-based accounts. Will not write liability: flatbed freight. Can also offer physical damage, cargo, and GL.
Robert A. Schneider Agency
5620 Smetana Dr., Ste. 225
Minnetonka, MN 55343
Contact: Kathy Anderson
Phone: (800) 832-6038
Fax: (952) 938-0701
E-mail: rs@rasinc.com
Web site: www.rasinc.com
An MGA/E&S broker that operates in IA, MN, ND, SD and WI with limits of $2 million. Will consider all classes. Can offer liability, physical damage, cargo, GL and property. Canal, Carolina Casualty, and Empire are the A rated or better carriers.
Seaboard Underwriters, Inc.
P.O. Box 1478
Burlington, NC 27216
Contact: Flip Hogan
Phone: (800) 222-2407
Fax: (336) 229-6977
Web site: www.seaboardunderwriters.com
An MGA that operates in all states except AL, CA, LA, MA, MS, NH, NJ, NY, RI and TX with primary limits of $1 million and excess limits of $1 million. Target markets are local, intermediate and long-haul, flat bed, box vans, and food products, Will not write dumps and Haz-mat. Can also offer physical damage, non-trucking, cargo, and excess. Carriers are Sirius America, State National, Lloyd's, Ace, AIG, Triumphe Casualty, and St. Paul, all rated A.
Swett & Crawford Group
21650 Oxnard St., Ste. 1400
Woodland Hills, CA 91367
Contact: Doug Hathaway
Phone: (612) 334-2380
Fax: (612) 334-2077
E-mail: doug_hathaway@swett.com
Web site: www.swett.com
An MGA that operates in all states except LA and MA with limits of $1 million primary AL. Target markets are long-haul, regional haul and short-haul trucking, public auto, and business auto. Will not consider hazardous commodities haulers. Can also write physical damage, cargo, excess liability, GL and property. Northland, St. Paul, Canal, Interstate, Scottsdale, National Indemnity, Guilford, General Star and Stratford, are the A rated carriers.
Truckers Insurance Associates, Inc.
P.O. Box 1494
Des Moines, IA 50306
Contact: Gary Albaugh, Ed Mattern
Phone: (800) 652-9515
E-mail: info@truckersins.com
Web site: www.truckersins.com
An MGA that operates in IA, IL, KS, MO, ND, NE and SD with limits of $5 million (liability), $250,000 (per vehicle, physical damage) and $500,000 cargo. Target markets are most types of trucking risks. Other coverages include AL, GL, physical damage, cargo, workers comp, property and inland marine. Prohibited classes are liability for haulers of extra-hazardous materials. Northland, Empire Fire and Marine and Carolina Casualty are the A rated or better companies.
United Brokers Inc.
P.O. Box 1243
New Albany, IN 47150
Contact: Amy Zettel
Phone: (800) 444-4824
Fax: (812) 949-5015
E-mail: amyz@ubinc.com
Web site: www.ubinc.com
An MGA that operates in GA, IN, KY, MN, NC, OH, OK, TN, WI and WV with limits of $1 million plus umbrella/excess. Will consider most classes but will not consider sand/gravel, coal, or mobile homes. Can also offer umbrella, excess, GL, property, cargo, and physical damage. Occidental, Wilshire, American Southern, and Penn-America are the carriers.
Yates & Associates Insurance Services
2100 E. Fourth St., 2nd fl.
Santa Ana, CA 92705
Southern CA
Contact:
Jim Jeffords, Ext. 247
Phone: (800) 660-1125
E-mail: jjeffords@yates-assoc.com
Web site: www.yates-assoc.com
Northern CA
Contact: Rudy Mendoza, Ext. 207
Phone: (800) 464-7042
E-mail: rmendoza@yates-assoc.com
Web site: www.yates-assoc.com
An MGA that operates in AZ, CA, CO, ID, MT, NM, NV, OR, UT, WA and WY with limits of $1 million CSL. Target market is 1 to 10 units. Will not write new ventures, loggers or hazardous waste. Can also offer physical damage and motor truck cargo. *