SPECIALTY LINES MARKETS
Today's market--more paying, less playing
By Larry G. France
In most cases, the public's participation in "fun business" is governed by the number of extra dollars they have to spend in their leisure time. The economy, high gas prices and fear of traveling by air have caused the average American to rethink leisure expenses. Although the economy is much better than a year ago, many people are still uncertain about what they can spend for leisure activity. On average, length of vacations has been reduced by several days. That translates to less spending, not only on hotels and food but also admission to amusement parks, miniature golf courses, and trail rides, to mention a few. If the average family takes two fewer vacation days, that can amount to significant dollars. Some of the smaller operators haven't been able to afford to take that revenue cut and have simply closed.
The record number of unemployed has also lessened the numbers going through turnstiles. The people who decided to drive instead of fly were met by high fuel costs that fluctuated by 15 to 20 cents from morning to that afternoon. Buying a tank of gas was like playing the stock market. Drivers were placing a "buy order" when it fell below $1.50 per gallon. So the cost of transportation has been a factor as well.
Many leisure-related facilities, depending on their size and type of operation, were faced with extra costs such as additional security that involves screening, and transportation from outlying parking lots because the closest ones to the gate were blocked off. The bottom line: more cost to operate with less revenue.
The insurance industry can take some credit. In the past, on the part of some, lack of proper underwriting and the haste to build premium volume without concern for protecting the market either drove the carrier to withdraw or elevate the acceptance of the risk to where none would qualify.
All of these factors have left us with fewer choices for placement. The good side of that coin is that the majority of those that remain are very solid because they had the foresight to underwrite the risks and not succumb to the temptation to disregard proper risk selection. Their carrier was still in tact and willing to continue to be a player in the leisure arena.
Bob Briggs, marketing director for Hull &Company, says that prior to September 11 the number of leisure risks in the United States grew substantially, with more young people testing their limits and looking for adventure. Some of the most popular leisure activities over the past few years, according to Briggs, have been family fun centers, water parks, water slides, climbing walls, virtual reality centers, Indy go-cart tracks, and horse trail rides.
"In the post-September 11 market," says Briggs, "there are fewer carriers seeking this type of business with reinsurers looking for more standard risks. This has limited the availability of capacity for these types of accounts. Now there are a handful of carriers that specialize in leisure accounts competing for the recreational risks, and only one or two that will entertain horse trail rides and related activities."
Briggs explains that although pricing has remained constant at previous levels, the problem has been finding a carrier for the difficult risks. He says, "The market for jet skis has really been hit hard and few companies offer coverage for rentals now." Briggs says that Hull's success in this area has come from their ability "to maintain close relationships with our leisure risks carriers and being careful to stay within company underwriting guidelines. It has helped us become a leader in this field."
That attitude is one that many don't have the stamina to adopt in this or any other class of specialty business. Sooner or later, (later, it is hoped) some markets will start to creep back into the leisure business with rates that will not sustain a premium base conducive to an underwriting profit. As in the past, they steal away into the night, leaving a carrier wondering what happened and clients looking for a last-minute solution for their coverage. This is the reason that there are few choices today.
It is a good idea to select a market that has been placing this type of business for some time and understands how to loss control underwrite, and price the account so the client will have a home at renewal time next year. It may also have a bearing on your agent's E&O future.
The following have responded to our survey and indicated that they are a market for all or selected classes of the leisure class pay for play. Be sure to pay attention to territories of operation.
Burns & Wilcox, Ltd.
30833 Northwestern Hwy., Ste. 220
Farmington Hills, MI 48334
Contact: Call 800 number for local branch
Phone: (800) 521-1918
An MGA/E&S broker that operates in all states except HI, MA, ME, NJ and NY with primary limits of $1 million and excess of $10 million. Target markets vary by company. Can write inland marine, property and event cancellation. Various carriers are used to place coverage.
Continental Bloodstock Agency, Ltd.
1818 Versailles Rd.
Lexington, KY 40504
Contact: Richard Grossman
Phone: (859) 233-1818
Fax: (859) 255-7506
E-mail: dick@equineinsurance.com
Web site: www.equineinsurance.com
An agency that operates in all states with limits that depend on the exposure. Target markets are canoe trips, miniature golf, and tennis/racquetball centers. Various carriers are used to place coverage.
Continental/Marmorstein & Malone
P.O. Box 586
Paramus, NJ 07652
Contact: Bill Malone
Phone: (800) 932-0249
Fax: (201) 261-8922
E-mail: bmalone@ca-group.com
Web site: www.ca-group.com
An MGA/E&S broker that operates in NJ and NY with primary GL limits of $1 million/$2 million. Writes most leisure risks and pay-for-play type accounts. Can also offer excess and umbrella liability. Carriers are American Empire, Essex, Columbia Casualty, Interstate, Nautilus, Admiral, Western World, and USLI/Mt. Vernon.
Delaware Valley Underwriting Agency, Inc.
420 S. York Rd.
Hatboro, PA 19040
Contact: Frank Seigel
Phone: (800) 772-2207
Fax: (973) 377-7779
E-mail: seigel@dvua.com
Web site: www.dvua.com
An MGA/E&S broker operating in DE, GA, KY, MD, NC, NJ, OH, PA, SC, VA and WV with limits of $10 million and up. All carriers are rated A or above.
Entertainment Brokers International
CA
10940 Wilshire Blvd., 17th fl.
Los Angeles, CA 90024
Contact: Ute Stults, Kellee O'Brien
Phone: (310) 824-0111
Fax: (310) 824-5733
NY
17 State St., #3550
New York, NY 10004
Contact: Wanda Phillips
Phone: (212) 310-0111
Fax: (212) 307-0598
A managing agent that operates in all states with GL limits of $50 million and property of $35 million. Target market is insurance brokers that deal with venues, touring groups, special events, casinos, family fun centers, tenant user liability, country clubs, golf courses, driving ranges, and festivals. Will not write water slides, mechanical rides, or animal rides. Can also offer contingency, inland marine floaters, real property, general and auto liability. Carriers are Clarendon America and Clarendon National, both rated A.
Evolution Insurance Brokers (EIB)
8722 South 300 West
Sandy, UT 84070
Contact: 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 any class. Prime Insurance Syndicate and Lloyd's are the carriers, rated B and A respectively.
Hull & Company, Inc.
2150 S. Andrews Ave.
Ft. Lauderdale, FL 33316
Contact: Carl Bartlotti, Valarie Lasher, Bob Briggs
Phone: (800) 678-4855
E-mail: info@hullco.com
Web site: www.hullco.com
An E&S broker operating in CA, CO, FL, ID, KS, MT, NC, NE, SC, TX and WY with limits of up to $1 million. Target markets are family fun centers, water parks, equine/trail rides, batting cages, go-kart tracks, golf driving ranges, paintball centers, camps, and arcades. Will not write jet ski rentals. Can offer coverage for recreational equipment, special perils or named perils, defense costs, outside the limits--includes theft, deductible options. The A rated carriers are Colorado Western, Scottsdale, Nautilus, Western World, and Clarendon.
International Excess Agency, Inc.
26451 Curtiss Wright Pky., #103
Cleveland, OH 44143
Contact: Diane Madigan
Phone: (800) 937-3497
Fax: (888) 291-1382
E-mail: diane@internationalexcess.com
Web site: www.intlxs.com
A general agency/E&S broker that operates in IN, KY, MI, OH, PA, TN and WV with primary limits of $1 million and excess limits of $5 million. Will consider all recreational risks and equine risks. Will not consider animal mortality. Can also offer A&H, property, and inland marine. Clarendon and Colorado Western are the carriers, rated A and B or above respectively.
Izzo Insurance Services, Inc.
7234 W. North Ave.
Elmwood Park, IL 60707
Contact: Michael C. Jones
Phone: (800) 800-1704
Fax: (708) 452-1777
Web site: www.izzoinsurance.com
An MGA operating in all 50 states. Izzo's leisure program consists of workers comp and EPLI only. Will not consider amusement parks. Carriers are AIG, Hartford, Alea North America, Clarendon, and Zenith.
K&K Insurance
1712 Magnavox Way
Fort Wayne, IN 46804
Phone: (866) 544-4636
Fax: (260) 459-5967
Canadian risks:
Phone: (800) 753-2632
Fax: (905) 602-9141
E-mail: kk_general@kandkinsurance.com
Web site: www.kandkinsurance.com
An MGA whose programs are available nationwide with limits that vary by program or class of business (in-house authority). Programs are available for camps, tennis/racquetball centers, health clubs/fitness centers, bowling/billiard centers, casinos, bingo halls, canoe trips/whitewater rafting, outfitter/guides, carriage rides, zoos/aquariums, dance schools, gymnastics clubs, martial arts studios, special events, sports complexes. Classes not available are parasailing, watercraft rental, ski resorts, amusement parks, family fun centers, and campgrounds. Can offer full commercial packages for most programs, including: GL, liquor liability, vendor coverage, ride liability, fireworks liability, property, business income, commercial auto, inland marine, crime, workers comp, and excess liability. All carriers are rated excellent or higher.
M.J. Kelly Co., Inc.
4415 E. Sunshine
Springfield, MO 65809
Contact: Lori Drake, Heather Duffield, Shawna Cooke
Phone: (800) 725-7211
Fax: (417) 883-7103
E-mail: hduffield@mjkelly.com
Web site: www.mjkelly.com
An E&S broker operating in AR, FL, IA, IL, KS, MO, MS, OK and TN with limits of up to $1 million/$2 million. Target markets are amusement parks/rides, canoe trips, horse rides, hot air balloon rides, trail rides, and water parks. Can offer coverage for special events, liquor liability and property. All carriers are rated A or above.
Midwestern General Agency, Inc.
255 NW Blue Pky.
Lee's Summit, MO 64063
Contact: Bianca Betts, Linda Mayo, Connie Carrell
Phone: (816) 246-1200
Fax: (816) 246-1290
Web site: www.mgakcmo.com
An MGA/E&S broker that operates in IL, KS, MO and NE with limits of $2 million/$2 million. Target markets are festivals and parades. Will not write fireworks/shooters liability. Can also offer inland marine. Various A rated carriers are used to place coverage.
NIF Group - North Island/NIF Pro
30 Park Ave.
Manhasset, NY 11030
Contact: Nancy G. Williams
Phone: (800) 892-8892
E-mail: marketing@nifgroup.com
Web site: www.nifgroup.com
An MGA/E&S broker that operates in AL, CT, FL, GA, MA, NJ, NY, PA, RI and TX with limits of $1 million. Can offer umbrella. All carriers are rated A or better.
Prime Insurance Syndicate Inc./I.E.B.S.
P.O. Box 4439
Sandy, UT 84091
Contact: Rick Lindsey
Phone: (877) 243-8181
Fax: (801) 304-3702
E-mail: rjl@primeis.com
Web site: www.primeis.com
An insurer (Prime)/MGA (IEBS) that operates nationwide with all limits. Will consider all classes. Prime is rated B and Lloyd's is rated in the A range.
Robert A. Schneider Agency
5620 Smetana Dr., Ste. 225
Minnetonka, MN 55343
Contact: Teri Benson
Phone: (800) 862-6038
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 except overnight camping. Can also offer property, auto, inland marine, and liquor liability. Nautilus, Penn America, Essex, and Mt. Vernon are the carriers.
Roush Insurance Services, Inc.
P.O. Box 1060
Noblesville, IN 46061
Contact: Scott Sackers, Tony Armor
Phone: (800) 752-8402
Fax: (317) 776-6891
E-mail: scott.sackers@roushins.com
tony.armor@roushins.com
Web site: www.roushins.com
An MGA that operates in IL, IN and OH only with GL limits of $1 million/$2 million aggregate with excess up to $20 million, and property limits of $1 million in-house with higher limits available. Target markets are hole-in-one, moonwalks, carnivals, and children's rides. Will not write trail rides, water parks, hot air balloon rides, or rain insurance. Can offer D&O, auto, excess liability/umbrella. Atlantic Casualty, Century Surety Company, Evanston, Essex Insurance Company, and Scottsdale are the carriers.
Russell Bond & Co., Inc.
295 Main St., Ste. 866
Buffalo, NY 14203
Contact: Jeff Latke (Ext. 147); Chris Moyer (Ext. 149), Alan Hall, Ext. (150)
Phone: (800) 333-7226
Fax: (716) 856-0403
E-mail: info@russellbond.com
jlatke@russellbond.com
cmoyer@russellbond.com
ahall@russellbond.com
Web site: www.russellbond.com
An MGA that operates in NY only with limits of $2 million/$3 million and higher. Will not consider amusement (kiddie rides), canoe trips, golf driving ranges, campground owners, horse & carriage rides, miniature golf, tennis & racquet centers. Can also offer GL, liquor liability and excess liability. All carriers are rated A or better.
S.H. Smith & Co.
41 N. Main St.
West Hartford, CT 06107
Contact: Jeff Parmenter
Phone: (800) 356-0168
Fax: (860) 561-3606
Web site: www.shsmith.com
An MGA that operates in all states with limits of up to $10 million. Can offer liquor liability and employment practices. Carriers are Northfield, USLI, Chubb, Nautilus, and Maxum.
Sea to Sea Insurance Services, Inc.
P.O. Box 515
Pismo Beach, CA 93448
Contact: Kurtis L. Limbo
Phone: (800) 732-2732 (SEA 2 SEA)
Fax: (805) 773-2010
A general agent that operates in all 50 states with primary limits of $1 million and excess limits of $5 million. Target markets are charter vessels, watercraft-related risks and watercraft rentals. Markel American and Essex are the A rated carriers.
Superior Access Insurance Services
P.O. Box 57092
Irvine, CA 92619
Contact: Joe Auditor
Phone: (800) 272-7550
Fax: (888) 272-7550
Web site: www.superioraccess.com
An MGA that operates in AZ, CA, NV and TX with limits of $1 million/$2 million aggregate. Will write only amusement centers with coin-operated games--no amusement parks or other leisure risks. Can write property to $7 million. Century Insurance Group is the A rated carrier.
W.H. Greene & Associates
400 Quaker Rd.
East Aurora, NY 14052
Contact: Mary Beth Cavanaugh, Mike LaMarca, Wil Cote
Phone: (716) 805-1090
Fax: (716) 805-1099
E-mail: mail@whgreene.com
Web site: www.whgreene.com
An MGA/E&S broker that offers primary coverage in NY and excess in all states. Limits of $1 million OCC/$2 million aggregate primary, up to $50 million on umbrella/excess. Target markets are special events, party/tent rentals, social clubs, video arcades, commercial swimming pools, petting zoos, etc. Will not write amusement parks, hard rock concerts, or political events. Can also offer CGL, property, umbrella, and weathers risks.
Western World Insurance Co.
400 Parson's Pond Dr.
Franklin Lakes, NJ 07417
Contact: Timothy P. Hochkeppel
Phone: (201) 847-2600
Fax: (201) 847-1010
Web site: www.westernworld.com
An insurer that operates in all states with limits of $1 million/$2 million. Will not write trail rides. Can offer GL. Western World and Tudor are the A rated or better carriers.
Yates & Associates Insurance Services
Santa Ana branch
2100 E. Fourth St., 2nd fl.
Santa Ana, CA 92705
Contact: Diane Rusk
Phone: (800) 660-1125
Fax: (800) 378-8588
E-mail: drusk@yates-assoc.com
Stockton branch
P.O. Box 70345
Stockton, CA 95267
Contact: Bob Mestayer
Phone: (800) 464-7042
Fax: (209) 472-7043
E-mail: rmestayer@yates-assoc.com
Glendale branch
801 N. Brand Blvd., Ste. 310
Glendale, CA 91203
Contact: John Upchurch
Phone: (818) 551-4588
Fax: (818) 551-4589
E-mail: jupchurch@yates-assoc.com
Web site: www.yates-assoc.com
An MGA/E&S broker that operates in CA only with primary limits of $1 million/$1 million. Target markets are most equine exposures; recreational exposures, such as cart rides, outfitters & guides, water parks, and moon bounces. Will not consider jet ski rentals, ski resorts, gun sales/rentals, and salt water exposures. Can also offer GL and property. Clarendon America is the A rated carrier. *