SPECIALTY LINES MARKETS
Location, location, location
By Larry G. France
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Location is important not only for appreciation in the value of the property but also for the part that events such as the recent Florida hurricanes can play in major losses. The panhandle of Florida saw waves of more than 50 feet consume not only the beach but apartments and condominium units as well. The total impact of the Florida hurricanes on pricing, capacity and underwriting acceptability for this class will not be known for some time.
Apartments and condominiums is one of the fastest growing property classes in North America. Some years ago a large condominium unit that was constructed across from the San Diego Convention Center remained partially empty. In the past two years, however, that complex has had little, if any, unoccupied space. New condominium construction is running at a record pace, and most are sold prior to breaking ground or completion. This trend is the same all over North America as well as other geographical areas.
“The marketplace for condominium insurance has been extremely tight for the last three years,” says Jim Mahood of HUB International a/o Gifford Associates in Nepean, Ontario.
“While the claims rate has remained stable over the past few years,” continues Mahood, “the catastrophic potential of these types of risks has led to an exodus of insurers from this line of business, resulting in a substantial increase in rates combined with reduced capacity. Just recently the premiums have begun to stabilize, in some cases fall, as the combination of higher rates and fewer claims has started to improve the outlook of this class of business.”
Mahood says that just as marketplace stability seems to be on the increase, the future is becoming somewhat uncertain because of the latest series of weather losses. The rate of claims appears to be rising as the premium levels are flattening out or reducing, thus calling to question the profitability of this class.
“Our expectations are that the rates will stabilize once the full extent of the weather losses is known, but we do not see any major push by insurers to expand their writings in this line of business.”
Overall, property drove the market to be hard a few years back but it has softened in the last few months. Only the final bottom-line tab from the recent storms that hit Florida as well as the East Coast will answer the question as to where property rates will settle.
According to Richard Eichhorn, CPCU, ARM, president of International Placement Services in St Louis, “The trends in the insurance marketplace for apartments and condos have gone through many changes in the past four years.”
Eichhorn says that in the beginning of 2000, the standard carriers started non-renewing those risks that had two or more claims in the previous three years. At the same time, they also began underwriting more stringently and non-renewing accounts in wind/tornado areas. This was seen particularly in Florida, Oklahoma, and Kansas. The direct writers also began enforcing more stringent underwriting guidelines and also limiting the number of new polices that their sales force could issue.
Eichhorn points out, “As a result of the above, the business began to float to the excess & surplus lines market. The previous combined rates for property and liability went from an average of $0.25 per $100 of values to $0.75 per $100 of values. Frame risks pricing was even higher if you could find a carrier to accept the risk.”
Eichhorn says that beginning in the last quarter of 2003, the rates in the E&S market started to drop to around $0.50 per $100 of values. Since July 1, 2004, both independent agent carriers and direct writers began coming back into the marketplace and accounts are going back to where they where in 2000. There appears to be plenty of capacity, Eichhorn reports.
Most likely, we will have to wait into the first quarter of 2005 to have these answers. (“Film in April!”)
The Insurance Marketplace for 2005, which will be distributed with the December issue of Rough Notes, will include among seven new categories: Luxury Homes, Condominiums, or Town Homes in excess of $500,000.
Future Specialty Lines articles will include Preview of the 2005 Specialty Lines Market in December, Contractors in January, and Watercraft in February.
The following have responded to our survey and have indicated that they are markets for Apartments and/or Condominium risks.
Aon Specialty Product Network
200 E. Randolph St., 18th Fl.
Chicago, IL 60601
Contact: Call toll-free number for name of appropriate provider
Phone: (877) 275-2776
Fax: (312) 381-6211
E-mail: moreinfo@askaspn.com
Web site: www.askaspn.com
Aon Specialty Product Network represents carriers, MGAs, program administrators and E&S brokers in all states. Target classes are nonprofit community associations, condominium associations, cooperatives, homeowners, timeshares, and all types of apartments. Can offer D&O, umbrellas, fidelity & crime, E&O for property managers, and property/casualty for apartments. Various A rated or better carriers are used to place coverage.
Atlantic Star Intermediaries, Inc.
11 Hanover Square, 15th Fl.
New York, NY 10005
Contact: Frank Corda, Brian Samway, Doreen Gonzalez
Phone: (212) 233-5015
Fax: (212) 233-0680
An MGA/E&S broker operating nationwide with limits of $5 million for contractor commercial umbrella and $25 million for real estate umbrella. Target classes are construction and real estate. Will not write primary commercial auto and personal lines. Can offer general liability, property, builders risk, professional liability and workers compensation. Approximately 15 carriers are used to place coverage.
BAT Insurance Corp.
801 N. Brand Blvd.
Glendale, CA 90230
Contact: Tony Trocino
Phone: (310) 382-0753
Fax: (310) 382-7133
An E&S broker that operates in CA only with limits of $25 million. Target classes are apartments and condominiums. Can offer earthquake and excess. All carriers are rated A+.
Burns & Wilcox, Ltd.
220 Kaufman Financial Center
Farmington Hills, MI 48334
Contact: Call toll-free number for local office
Phone: (800) 521-1918
Web site: www.burnsandwilcox.com
An MGA/E&S broker that operates in all states except AK, ME and NY with limits that vary by carrier. Target classes vary per carrier. Can offer GL, umbrella, and D&O. Various carriers are used to place coverage.
Central Insurex Agency, Inc.
800 S. Washington St.
Van Wert, OH 45891
Contact: Kurt Muntzinger
Phone: (800) 736-7131
Fax: (800) 736-7026
Web site: www.central-insurex.com
An E&S broker that operates in IL, IN and OH with limits of property values up to $50 million and GL of $1 million. Target classes are apartments and condominiums. Nonadmitted A rated carriers are used to place coverage.
Crusader Insurance Co.
23251 Mulholland Dr.
Woodland Hills, CA 91364
Contact: Gay Corbett
Phone: (800) 669-9800
Fax: (818) 591-9856
Web site: www.crusaderinsurance.com
An insurer that operates in CA only with liability and property limits of up to $2 million. Target class is apartments with five units or more. Crusader is rated B+.
The Distinguished Programs Group
6 E. 43rd St.
New York, NY 10017
Contact: James A. Tesoriero
Phone: (888) 355-4626
E-mail: info@distinguished.com
An MGA that operates in all states with limits of $50 million per building, $1 million/$2 million CGL, and up to $100 million umbrella. Target classes are apartments, condominiums, and cooperatives. Can offer property, boiler, CGL, umbrella, D&O and crime. Discover P&C (A), Arch (A-), Chubb (A++), and Great American (A) are the carriers.
DVUA of New Jersey, Inc.
25 Vreeland Rd.
Florham Park, NJ 07932
Contact: Bogi Schaeflein, Angela Miele
Phone: (800) 772-2207
Fax: (973) 377-2430
An MGA/E&S broker operating in NJ and PA only with liability limits of $1 million and property limits of $1 million. Target class is condominiums with 35 units and under. Will not write condos with 36 units or more. Can offer condo D&O. Evanston and Penn America are the A rated carriers.
DVUA West Virginia, Inc.
3768 Teays Valley Road
Hurricane, WV 25526
Contact: George Ellis, Mark Howerton
Phone: (800) 982-3882
Fax: (304) 757-1182
E-mail: ellis@dvua.com howerton@dvua.com
Web site: www.dvua.com
An MGA/E&S broker operating in KY, MD, OH, VA and WV with GL limits of $1 million primary/$10 million excess, and property limits of $20 million. Target classes are apartments, condominiums, and coastal habitational properties. Can offer tenant discrimin-ation. Carriers are Seneca, Lloyd’s, Interstate Fire & Casualty, First Specialty, American Empire Surplus Lines, and Penn-America.
Evolution Insurance Brokers International (EIB International)
8722 Harrison St.
Sandy, UT 84070
Contact: F. Darrell Lindsey
Phone: (877) 678-7342
Fax: (801) 304-3800
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. Prime is rated B- and Lloyd’s is rated in the A range.
Gateway Underwriters Agency
1714 Deer Tracks Trail, Ste. 210
St. Louis, MO 63131
Contact: Mary Beth Fox
Phone: (800) 325-7652
Fax: (314) 238-0065
E-mail: marybeth.fox@gua-stl.com
Web site: www.gua-stl.com
An MGA operating in AR, IL, KS, MO, NE and OK with limits of $1 million/$2 million or higher on GL; no upper limit on property. Target classes are apartments, condominiums, and townhomes. Can offer equipment breakdown and umbrella. Carriers are USL, Nautilus, Western World, Scottsdale, Indian Harbor, and Lloyd’s.
Gifford Associates Insurance Brokers (HUB International)
346 Moodie Dr.
Nepean, Ontario, Canada K2H 8G3
Contact: Terry Markell, Jim Mahood
Phone: (800) 570-8770
E-mail: gifford@giffordhub.com
A general insurance broker that operates in eastern Canada, with limits of Cdn$50 million+. Target market is residential condominiums (both property-managed and self-managed.) Can offer D&O, fidelity, pollution, and equipment breakdown insurance. Carriers are Aiva/ING (rating dependent on construction and losses).
Gray-Stone & Co.
275 E. Hillcrest Dr., Ste. 275
Thousand Oaks, CA 91360
Contact: Juca Brooks, Grace Herrera
Phone: (805) 494-4440
Fax: (805) 494-8798
E-mail: info@gray-stone.com
Web site: www.gray-stone.com
A wholesale broker operating in all states except AK and WY with various limits. Target class is apartments with 4 units or more. Will not write subsidized housing, or fraternities/sororities. Can offer package and excess. All admitted and nonadmitted carriers are rated A+.
Harry W. Gorst
9310 Topanga Canyon Blvd.
Chatsworth, CA 91311
Contact: Randolph Scott, Fran Locke, Nancy Brown
Web site: www.gorst.com
An MGA/E&S broker operating in CA only with GL and property limits of up to $10 million. Target classes are apartment buildings or complexes with 5 units or more, homeowner associations and townhome/townhouse associations, residential condominium and timeshare associations and cooperative housing corporations. Can offer D&O. Scottsdale, Colony, Western Heritage, and Markel are the A rated or better carriers.
Hospitality Insurance Solutions
304 Cedar St.
Sterling, CO 80751
Contact: Gregg Dennington
Phone: (866) 286-5889
Fax: (970) 522-7792
E-mail: gdennington@hospitalityins.com
Web site: www.hospitalityins.com
An MGA that operates in AL, AZ, CA, CO, CT, GA, IL, IN, KY, MO, NC, NJ, NM, NV, NY, PA, TN, VA and WA with property limits of $50 million, GL of $1 million/$2 million, boiler & machinery of $25 million and crime of $500,000. Target classes are resort condominiums (short-term rental) and timeshare. Will not write apartments or owner-occupied condominiums. Can offer umbrella with limits of up to $50 million. The A rated carrier is Discover P&C.
Hull & Company, Inc.
2150 S. Andrews Ave.
Ft. Lauderdale, FL 33316
Contact: Carl Bartiotti
Phone: (800) 678-4855
Web site: www.hullco.com
St. Petersburg, FL
Contact: Larry Beller
Phone: (800) 727-4855
NC, SC, VA
Contact: Donna Porter
Phone: (800) 241-4855
Texas
Contact: Jack Huff, Carol Gordon, Lori Lemons
Phone: (800) 765-4855
California
Contact: Jeff Case
Phone: (866) 434-2210
An E&S broker that operates in CA, FL, NC, SC, TX and VA with limits of up to $50 million. Target markets are condominiums, townhomes, and homeowners associations. Can offer property, excess property, CGL, umbrella, HO-6, D&O, and personal articles floaters. Carriers are Empire Indemnity, AIG, Lexington, USF&G, USLI, Scottsdale, General Star, and Evanston, all rated A or above.
Ian H. Graham Insurance
5161 Lankershim Blvd., Ste. 240
N. Hollywood, CA 91601
Contact: Joel Meskin, Jamie Schraff, Luke Hubbard
Phone: (800) 621-2324
Fax: (866) 229-3754
Web site: www.ihginsurance.com
A managing general underwriter that operates in all states with D&O limits of $1 million to $5 million; fidelity/crime $10,000 to $3 million; and umbrella $1 million to $15 million. Target classes are condominiums, homeowners associations, property owners associations, timeshares (no umbrella), and commercial associations. Can offer property manager E&O and fidelity/crime. CNA is the A rated carrier.
Insurance Innovators Group
P.O. Drawer 969
Glenside, PA 19038
Contact: Andrew Memolo, Barb Randall, Etty Herzig
Phone: (800) 523-6422
Fax: (215) 886-2482
Web site: www.iiigroup.com
An MGA operating in DE, MD, NJ, NY and PA with GL limits of $1 million/$2 million/$1 million plus umbrella or excess (property varies). Can offer D&O. Various A rated carriers are used to place coverage.
International Placement Services, Inc.
101 South Hanley Rd., Ste. 700
St. Louis, MO 63105
Contact: Kelly Miller, Lynn Goodwin
Phone: (800) 999-4774
Fax: (314) 725-8394
E-mail: kmiller@ipsico.com
lgoodwin@ipsico.com
Web site: www.ipsico.com
An E&S broker that operates in all states with primary GL limits of $1 million and umbrella limits of $10 million, property up to $100 million. Target classes are apartments and condominiums. Will not consider student or senior citizen housing. Can offer umbrella and D&O. All carriers are rated A or better.
IT Risk Managers, Inc.
P.O. Box 504
Okemos, MI 48805
Contact: Larry Harb, Bryan Nelson
Phone: (888) 280-8710
Fax: (517) 381-8699
E-mail: info@itriskmanagers.com
Web site: www.itriskmanagers.com
An E&S broker that operates in all states with limits of up to $100 million with excess market—can layer for higher limits. Target classes are real estate portfolio, property manager, apartments and condominiums, and hard-to-place. Can offer primary and excess property, plus umbrella. All carriers are A rated or better.
Jacobs & Associates
8227 Brecksville Rd.
Brecksville, OH 44141
Contact: Jim Jacobs, Beth Jacobs
Phone: (440) 838-1870
Fax: (440) 838-0742
Web site: www.jacobsnow.org
An E&S broker that operates in OH only with GL limits of $5 million and property of $25 million. Target classes are apartments and condominiums. Will not consider assisted living. Can offer GL, property, D&O, and property managers E&O. Lloyd’s, Western Heritage, Scottsdale, Colony, and Mt. Vernon/USLI are the A rated or better carriers.
Jimcor Agencies
60 Craig Rd.
Montvale, NJ 07645
Contact: Frank Marmorato
Phone: (800) 334-0474
E-mail: fmarmorato@jimcor.com
Web site: www.jimcor.com
An E&S broker that operates in MA, NJ, NY, PA and WV with primary limits of $1 million/$2 million and umbrella of $5 million. Target classes are coastal and inner city. Will not write lead monoline. Can offer D&O, renters insurance, and umbrella. All carriers are A rated.
M.J. Kelly Co., Inc.
4415 E. Sunshine
Springfield, MO 65809
Contact: Heather Duffield, Shawna Cooke, John Jennings
Phone: (800) 725-7211
Fax: (417) 883-7103
E-mail: hduffield@mjkelly.com
An E&S broker operating in AR, CO, FL, IA, IL, KS, MO, MS, OK, TN and UT with various limits. Can consider most classes but is most competitive on risks with property limits under $3 million. Can offer property, GL, D&O and umbrella. Various carriers are used to place coverage.
McLeckie Insurance Group
120 Main Street
Naples, TX 75568
Contact: Bill McLeckie, Jason McLeckie
Phone: (877) 905-9090
E-mail: mcleckie@msn.com
Web site: www.mcleckie.com
An MGA/E&S broker that operates in CO, FL, IA, LA, MS, OK, PA and TX with all limits available. Various carriers are used to place coverage.
Metcom Excess
P.O. Box 559
Ridgefield Park, NJ 07660
Contact: Roseann Bonastia
Phone: (800) 521-1717
An E&S broker operating in NJ, NY and PA with GL limits of $1 million and property limits of $100 million. Target markets are apartments with mercantile and coastal condominiums. Can offer D&O and umbrella.
NAPCO LLC
333 Thornall St.
Edison, NJ 08837
Contact: John Pagoumian
Phone: (732) 603-2092
Fax: (732) 516-3192
E-mail: jpagoumian@napcollc.com
Web site: www.napcollc.com
A wholesale broker and reinsurance intermediary that operates throughout the United States (global programs available), with all-risk limits of $10 million to $1 billion and wind, flood and earthquake limits available up to $500 million. Target classes are residential and commercial apartments, condominiums, HUD of all types, government and Section 8. Can offer property, boiler and machinery, casualty umbrella coverage for all states and can include crime for select states. All carriers have a rating of A- or better.
NIF Group/NIF Pro
30 Park Ave.
Manhasset, NY 11030
Contact: Visit Web site for a list of offices
Phone: (800) 892-8892
E-mail: marketing@nifgroup.com
Web site: www.nifgroup.com
An MGA/E&S broker that operates on an admitted basis in all states and on a nonadmitted basis in selected states, with limits of $3 million/$3 million. Can offer D&O, package, property, and GL. All carriers are A rated.
NorthCoast Excess & Surplus, Inc.
2244 East Enterprise Pky.
Twinsburg, OH 44087
Contact: Jeff Burke, Michele Burke
Fax: (330) 405-9893
E-mail: jburke@ncoastxs.com
mburke@ncoastxs.com
Web site: www.ncoastxs.com
An E&S broker that operates in OH only with limits of up to $2 million/$2 million, plus excess and umbrella. All admitted and nonadmitted carriers are A rated.
Philadelphia Insurance Companies
One Bala Plaza, Ste. 100
Bala Cynwyd, PA 19004
Phone: (800) 873-4552
Fax: (610) 617-7940
E-mail: phlysales@phlyins.com
Web site: www.phlyins.com
An insurer that operates in all states except LA with limits of up to $10 million with umbrella. Target classes are buildings that are 20 years or younger with a minimum of 75% owner occupancy. Will not consider commercial condominium associations. Can offer umbrella and boiler and machinery. All carriers are admitted and rated A+.
Prime Insurance Syndicate Inc./I.E.B.S.
P.O. Box 4439
Sandy, UT 84091
Contact: Rick J. Lindsey
Phone: (877) 243-5590
Fax: (801) 304-3702
E-mail: rjl@primeis.com
Web site: www.primeis.com
An MGA (IEBS) and insurer (Prime) that operates in all states with all limits. Will consider any class. Prime is rated B- and Lloyd’s is rated in the A range.
Princeton Risk Managers, Inc.
435 Wall St., Research Park
Princeton, NJ 08540
Contact: Jim Griffith, Steve Gandley
Phone: (800) PRM-0099
Fax: (609) 924-8155
Web site: www.princetonrisk.com
An E&S broker that operates in CT, DE, NJ, NY and PA with limits of up to $75 million property depending on construction. Target classes are garden-type, as well as mid- and high-rise. Can offer property, GL and umbrella, plus EPLI, D&O and tenant discrimination. Pacific, One Beacon, Lloyd’s, and Crum & Forster are the carriers.
RISC, Inc.
2001 Bryan St., Ste. 2900
Dallas, TX 75201
Contact: Peter Gordon-Wright, Donna Schoenemann, David Howard
Web site: www.gorisc.com
An MGA/E&S broker that operates in LA and TX and all other states where agent has surplus lines license, with limits as needed (no minimum, no maximum). Will consider all classes and all types and sizes. Can offer builders risk. All carriers are A rated.
Roush Insurance Services, Inc.
P.O. Box 1060
Noblesville, IN 46061
Contact: Gabe Derzhavets, Scott Sackers, Tony Armor
Phone: (800) 752-8402 (IL, IN), (317) 776-6880
Fax: (317) 776-6891
Web site: www.roushins.com
An MGA that operates in IN, IL and OH only with customary GL limits of $5 million, property limits of $15 million. Higher limits may be available. Can offer loss of rents and equipment breakdown. Scottsdale (A+), Essex (A), Evanston (A), Century Surety (A-), and Atlantic Casualty (A-) are the carriers.
Russell Bond & Co., Inc.
295 Main St., Ste. 866
Buffalo, NY 14203
Contact: Jayme Kralick
Phone: (800) 333-7226
Fax: (800) 677-6779
E-mail: info@russellbond.com
Web site: www.russellbond.com
An MGA that operates in NY state only with all limits. Target markets are minimum personal property $40,000; will consider risks with claim problems, dog exposures, seasonal, secondary, cooperatives. Can offer umbrella, condominium associations, D&O. U.S. Underwriters is the A++ rated carrier.
S.H. Smith & Co.
41 N. Main St.
West Hartford, CT 06107
Contact: Jeff Parmenter, Ray Snow, Garth Zomermaand
Phone: (800) 356-0168
Fax: (800) 329-7648
Web site: www.shsmith.com
An E&S broker that operates in CT, MA, ME, MN, NH, NY, OH, RI and VT with limits of $1 million/$2 million. Target classes are apartments and condominiums. Can offer property. The A rated carriers are Northland, Lloyd’s, First State, First Specialty, USLI, Nautilus, and Gen Star.
Southern Insurance Underwriters, Inc.
4500 Mansell Rd.
Alpharetta, GA 30022
Contact: Linda Kosakowski, Barbara Commings, Pam Royalty
Phone: (800) 568-1700
Fax: (678) 498-4509
An MGA that operates in AL, FL, GA and SC. Target classes are apartments, condominiums, and apartments under conversion. Can offer property, GL and umbrella. All carriers are A rated.
Superior Access Insurance Services
3 Whatney, 2nd Fl.
Irvine, CA 92618
Contact: Jonathan Reddekopp
Phone: (800) 272-7550
Fax: (888) 272-7550
E-mail: info@superioraccess.com
Web site: www.superioraccess.com
An MGA/wholesaler/E&S broker offering E&S in AZ, CA, NV and TX and admitted in most states, with limits of $25 million per location and $50 million per policy. Target classes are 25 years preferred and 40-year update E&S. Can offer auto and umbrella. St. Paul Travelers and Century Surety are the carriers.
Surplus Insurance Brokers Agency, Inc.
P.O. Box 749
South Bend, IN 46624
Contact: Sean Urbanski, Carol Dhoore, Shirley Pritchett
Phone: (800) 342-5706
Fax: (800) 578-7758
E-mail: surbanski@surplusins.com
Web site: www.surplusins.com
An MGA operating in IL and IN only. Target class is small to medium apartments. Will not consider public housing. Can offer umbrella. Scottsdale (A+) and Northfield (A) are the carriers.
Symons International Group (Florida) Inc.
2300 Glades Rd., Ste. 135E
Boca Raton, FL 33431
Contact: Barbara Berenbaum
Phone: (561) 392-1323
Fax: (561) 392-9719
E-mail: bberenbaum@sigfl.com
An MGA/E&S broker that operates in FL only with GL limits of $1 million/$3 million. Target classes are apartments and condominiums. Can offer property, excess wind. Burlington is the A rated carrier.
Unifax Insurance Systems, Inc.
23251 Mulholland Dr.
Woodland Hills, CA 91364
Contact: Gay Corbett
Phone: (800) 669-9800
Fax: (818) 591-9856
Web site: www.crusaderinsurance.com
An MGA that operates in CA only with liability and property limits of up to $2 million. Target class is apartments of 5 units or more. Crusader is the B+ rated carrier.
Western World Insurance Co.
400 Parson’s Pond Dr.
Franklin Lakes, NJ 07417
Contact: Timothy P. Hochkeppel
Phone: (201) 847-8600
Fax: (201) 847-1010
Web site: www.westernworld.com
An insurer that operates in all states with GL limits of $1 million/$2 million and property limits of $500,000. Western World is A+ rated as is Tudor.
Yates & Associates Insurance Services
2100 E. Fourth St., 2nd Fl.
Santa Ana, CA 92705
Contact: Dani Davis, Diane Rusk, Veronica Mendoza
Phone: (800) 660-1125
Fax: (800) 378-8588
Web site: www.yates-assoc.com
An MGA/E&S broker that operates in CA only with limits of $2 million (excess limits available). Will consider all classes. All admitted and nonadmitted carriers are rated A+. *