California-based MGA acquires INAMAR's
wholesale recreational marine business
By Edward O'Hare
Overlooking the Dana Point (California) Marina, where Trafalgar Marine Insurance Services covers both pleasure and commercial vessels, are Trafalgar's owners Scott Morgan, CEO (left) and Cary Breese, President.
"What's in a name? That which we call a rose by any other name would smell as sweet," says Juliet in the famous balcony scene in Romeo and Juliet. Ah, a rose for sure. But what about a name for a new independently owned managing general agency--one specializing in recreational marine insurance? Could a special name give the agency a certain cachet that might help set it apart from competitors? Cary Breese and Scott Morgan think so and they've reached back into history for just such a name: Trafalgar. But it's more than just a name; it's what the name represents.
History buffs and Jeopardy players will quickly note that (Cape) Trafalgar was the site of one of the most celebrated naval battles in European history. It was there in 1805 that Admiral Horatio Nelson, in a daring and surprise tactic, split his outnumbered British fleet into two groups to attack and decimate the long, single file of French and Spanish ships. The battle, in which Nelson was mortally wounded, ended forever Napoleon's plan to invade England and gave the British supremacy of the seas for the rest of the century. Breese and Morgan believe bold and innovative strategies will also be the hallmark of their agency, whose full name is Trafalgar Marine Insurance Services, Inc., located in Irvine, California. While not about to claim supremacy in recreational marine just yet, they see their agency right off as a key player in the marketplace.
That confidence comes from their own experience and expertise in various phases of company and agency activities and from their purchase in March of INAMAR's wholesale recreational marine insurance business--one with its own ties to tradition through its predecessor companies, including CIGNA and INA. The $10 million book breaks down to $8 million in "bread and butter" boat and yacht coverages, and $2 million in compatible commercial marine, including marinas, yacht clubs, charters and manufacturers. "Purchasing a wholesale marine operation of this magnitude offers a unique opportunity to build upon its success, and enhance an already prominent, nationally recognized insurance business," says Breese, president and owner of Trafalgar Marine. "It puts us among the top four or five marine MGAs for many of our markets."
Those sentiments are echoed by Ray Stahl, president of INAMAR Recreational Marine Insurance. Although Trafalgar is a start-up agency, it starts with an established book of business which it can run with and expand, he says, adding: "Selling the wholesaling business to Trafalgar will allow Trafalgar to continue to place a significant portion of its business with INAMAR, while at the same time, it will allow INAMAR to focus on servicing its specialty agents."
"It's been a seamless transition," says Morgan, Trafalgar's chief executive officer and owner. "We retained the core staff handling this business and maintained continuity with independent agents and brokers. But going forward, we'll operate with our own unique blueprint."
That's good news for Joe Siragusa, an agent for Island Insurance Agency, which specializes in marine in New York City. "When placing business in the marine market, you need knowledgeable underwriters who can keep you abreast of changes in coverages from year to year. This enables us to service our customers properly and protects us against errors and omissions," he says.
Another plus for Siragusa is Trafalgar's professional and personal service. "Today, many markets are operating service centers using untrained and unseasoned kids who don't know a port from a starboard; they can't field a question on the spot. In a seasonal market like recreational marine, you've got to underwrite quickly. With Trafalgar, I can submit, get a quote and bind the same day."
Breese says Trafalgar will build its business and reputation on just that kind of relationship--developing and delivering the best products and services in a streamlined and systematic way. Initially, he says, Trafalgar will concentrate on growing its recreational marine book. But he also sees real potential for expanding quickly and deeply into areas such as "blue water" exposures, cargo, high performance vessels and other specialty risks (both Breese and Morgan are licensed surplus lines agents in California). "If we can do it in marine, we can do it with a whole range of specialty products," says Breese--adding: "Our ultimate goal is for Trafalgar to be known as one of the top sources of specialty products for independent general agents throughout the country."
To reach that goal, Trafalgar has assembled a staff of marine specialists with a combined 100 years of experience and is licensed to operate in 48 states. And it has created an impressive Web site--www. trafalgarinsurance.com--with an easy road map for agents and brokers to do business. Information describes the agent-friendly quoting process and fast turnaround, the wide range of products with no minimum premium requirements, and availability of premium credits for, among other things, completion of an accredited boating safety course and a claim-free period (minimum of three to five years for most programs). The pages also prominently display its logo: a right-profile of a lion's head, not surprisingly, similar to the ones on the gigantic lions found at the foot of Nelson's Column in London's Trafalgar Square.
Breese and Morgan have long careers in the industry. A native of New Jersey with a degree in electrical engineering, Breese rose through the ranks from a credentialed actuary to senior vice president at CIGNA before moving to the agency side. Morgan, a native Californian and CPA, began with Amwest, where he developed an expertise in management and distribution systems before becoming co-owner of a successful surety and insurance agency. Although new kids on the dock, so to speak, they're seasoned insurance professionals and in familiar waters when it comes to recreational marine. Both are avid boaters and have close contacts with the boating community. Breese is a member of the Adventura Sailing Club, which is also a client. They also count numerous celebrities among their clients, discreetly serving their boating insurance needs.
That said, they're fully aware of the challenges confronting them in this highly competitive line. They've spent much time on the road, getting up close and personal with clients. One stop was at IBA West in Oakland, California, which has more than 1,000 agents and brokers in California, Washington, Oregon and Alaska. "We had a long and successful relationship with INAMAR and we expect it to continue with Trafalgar," says Clark Payan, president of IBA West Service Corp. "The recreational marine program is ideal for our members, who may not write a lot of boats but need the coverage to be available. And we're excited about Trafalgar's plan to expand into other lines, which gives our members more options."
Recreational boating is big business in America--with retail expenditures rising 2.5% to $29.2 billion in 2002, this despite a sluggish economy and unsettled world conditions. The National Marine Manufacturers Association (NMMA) reported that higher sales were registered in all major segments of the industry: new boats, motors, trailers, pre-owned boats/motors and aftermarket accessories. The number of boats jumped to 17.3 million in 2002, from 17.1 million in 2001, with only the number of participants showing a slight decline--to 68.8 million from 69.4 million.
Those numbers mean a steady stream of business for Mark Boehmer, of Dawson/Bradford Insurance Agency, in Bangor, Maine, which writes recreational and commercial marine from Newfoundland to the Virgin Islands. And it's a lucrative business--with loss ratios well below other lines, says Boehmer. "In fact," he says, "the positive marine business has been carrying many of the multi-line companies which have been hit hard in auto, homeowners and other lines."
Boehmer says insurers are benefiting from the greater attention being paid to safe boating through courses by the Coast Guard, Power Squadron, the states and boat clubs. He sees this firsthand as he travels East Coast waterways in his Boston Whaler visiting clients and on pleasure trips. And it's reflected in the Coast Guard's five-year comparison which shows 6,419 accidents, 681 fatalities and 4,274 injuries in 2001, down from 8,047 accidents, 821 fatalities, and 4,555 injuries in 1997. The importance of safety courses, which encourage the use of life jackets and lookouts and discourage speeding and the use of alcohol, is underscored in these statistics: Approximately 80% of all accidents occur on boats where the operator has not completed a course, and 34% of all fatalities involve alcohol.
About Trafalgar, Boehmer says, "We're three time zones apart but whenever we call we get a specific underwriter. This helps develop a rapport with the underwriter and a confidence level that things will get done right. Trafalgar also has a variety of markets which can provide whatever coverages we need on a regular basis."
In evaluating overall service, Boehmer places a high priority on getting renewal notices well in advance of the renewal date. "We pride ourselves on being able to personally review policies with clients to see if there's a need to change or upgrade coverages. We need ample time to do that--more than the two weeks or less that is common throughout the industry."
Not to worry. Breese and Morgan say that early renewal notices, among other things, will be standard operating procedure as Trafalgar makes its mark in marine and elsewhere. *
For more information:
Trafalgar Marine Insurance Services, Inc.
Web site: www.trafalgarinsurance.com