INSURANCE MARKET UPDATE
Independent agents and brokers continue to dominate commercial lines and have experienced steady growth in personal lines, according to the 2002 market share study conducted by the Independent Insurance Agents & Brokers of America (IIABA).
The report shows that the commercial lines market grew 19% to $203.28 billion in 2002, with independent agents and brokers writing nearly 79% of the business. Because of the rise both in the market and in market share, independent agents and brokers experienced an increase in premium of $25.4 billion. In 2001, independent agents and brokers wrote nearly 75%, or $169.9 billion in direct written premium, of the commercial lines market.
In 14 states and the District of Columbia, independent agents and brokers write more than 80% of the commercial lines market. The top five markets in independent agent and broker commercial lines market share are Hawaii, Rhode Island, Massachusetts, the District of Columbia, and Maryland. Additionally, independent agents and brokers write 57% to 80% of the business in the commercial lines markets of the remaining states.
The personal lines market also experienced healthy growth in 2002, finishing the year at $188.35 billion, with independent agents and brokers writing slightly more than 36% percent of the business. As a result, the agency system added $6.7 billion in premium in the personal lines market segment. This is an increase from 2001 figures in which agents wrote $169.4 billion in direct written premium, or 35%, of the personal lines business.
In Massachusetts, independent agents and brokers write 78.87% percent of the personal lines market. Maine, Vermont, Connecticut, and Ohio agents and brokers follow with between 50% and 61% of the market share. Independent agents in 11 states have more than 40% market share. In 17 states, however, they write only 20% to 30% of the personal lines market.
Aon offers group captives to mid-market companies
Aon Corporation has formed Aon Alternative Risk Underwriting (ARU), a managing general underwriter that organizes member-owned group captives for middle market U.S. companies. Working through independent agents and brokers, ARU targets principally private companies or closely held public companies that have better-than-average loss experience, solid financial condition, and pay multiline premiums between $200,000 and $2 million. To be considered, a group must include six to 12 qualified insureds that generate $5 million or more in premium.
ARU, a unit of Aon Underwriting Managers, offers captive formation services, underwriting management, administrative services, accounting and shareholder services, fronting and reinsurance placement, and umbrella coverage above the captive.
Schinnerer expands college program
Victor O. Schinnerer & Co., Inc., announced that EdChoice, a program for small to mid-sized colleges and universities, is now offering its general liability policy to educational institutions in all states except Alaska, the District of Columbia, Nebraska, Nevada, New Mexico, New York, and West Virginia. The policy previously was available in only 16 states.
The general liability policy covers exposures that include corporal punishment, athletics or sports activities, host liquor, and limited pollution liability. The definition of insured includes school nurses, speech therapists, athletic trainers, and physical therapists. Coverage includes non-owned watercraft up to 50 feet. Foreign coverage for students and faculty traveling abroad is also available.
Target risks for the program are small to mid-sized public and private nonprofit colleges and universities, including community colleges, with enrollments of up to 5,000.
EdChoice is underwritten by one of the CNA companies. For more information, visit the program's Web site (www.InsureSchools.com).
Chubb has program for community banks
The Chubb Group introduced a package program for community banks. Called ForeFront PortfolioSM for Community Banks, the package contains policies for directors and officers liability, bankers professional liability, employment practices liability, fiduciary liability, outside directorship liability, and lender liability. Customers can select the coverages they would like to purchase; they can have separate limits for each coverage or an aggregate limit for all of the coverages, or they can combine coverages under aggregates. The package is available to community banks with assets of $1 billion or less that operate in a small geographical area.
The package provides duty to defend coverage and automatic coverage for newly acquired subsidiaries. Experienced law firms that specialize in the six coverage sections are retained. Coverage is noncancellable except for nonpayment of premium. There is one application for all coverages.
Napco opens casualty division
Napco, LLC, a consolidator of global property insurance capacity, opened a wholesale casualty division based in its Edison, New Jersey, headquarters. Eddie L. Williams joined Napco as a senior vice president in charge of the casualty unit.
The new unit initially will offer general liability and umbrella/excess liability brokerage services from a range of domestic and global markets. Emerging product offerings include automobile, directors and officers liability, professional liability, and workers compensation.
For more information, call Eddie Williams at (732) 603-2086 or e-mail him (ewilliams@napcollc.com). *