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Target Markets Special Section Klein Insurance Services, Inc.  The Klein family’s roots have been in the property and casualty insurance business since 1921. Julius Klein founded Rosenthal & Klein, an insurance agency in Newark, New Jersey, in that year. Julius’s son, Scott, says he grew up in the insurance business. But Scott’s entry into the program administration arena didn’t begin until 1991 when he started Klein Insurance Services, Inc. (KIS), now a $30 million in premiums operation, and carved out the hospitality industry as his primary niche market.
“After I finished college, I went to work for a while and then enrolled in a Master’s program at Cornell University, majoring in hotel administration,” says Klein. “After I completed my post graduate degree, I joined my father in an insurance consulting service. My father had a great deal of experience in the international insurance market, and we provided consulting advice on a fee basis for U.S.-based multinationals with overseas operations. We were very successful. But then, around 1990, I decided that I wanted to start an organization that was more asset-based, rather than fee-for-service. My knowledge of the hospitality industry and my insurance expertise were a natural fit to start up an insurance program for hotels.” The KIS hospitality program is designed for risks whose primary business is a full-service hotel or motel. KIS targets national chains and upscale properties, with an underwriting focus on well-constructed, well-managed and profitable operations. Coverages include property, general liability, umbrella liability, employment practices liability insurance and other standard forms of insurance. “Risk selection is the key to profitability,” says Scott. “Before we write the coverage, we want to know if the hotel management or owners practice preventative maintenance rather than just waiting for something to break down. The worst exposure that hotels face, especially in hurricane-prone areas, is water damage. We want to know if the roof is maintained properly so that it doesn’t peel back in a storm and if windows are strong enough to withstand gale winds. Hotels with casinos or hazardous activities such as horseback riding and winter sports do not meet our underwriting guidelines. We can write them, but would exclude such activities. We are not a market for substandard risks.” As part of underwriting requirements for the KIS hotel program, Scott says that his firm makes certain that risks are fully compliant with life safety codes, that there are no diving boards or slides, that all cooking surfaces must be UL 300 compliant and that there are hardwired smoke detectors in all rooms and hallways. “Hotel exposures can be very volatile if you don’t practice proper risk selection,” he says. Recently, KIS began writing workers compensation through PMA Group. KIS writes monoline for accounts over $50,000 and smaller accounts with other lines of business. In addition, KIS now offers premium finance through First Funding. This is KIS’s first year with Target Markets and Scott is enthusiastic about the relationship. “I believe firmly that joining the association was the best decision we ever made. We are already becoming very active in association business and we expect to become even more active in the future. Target Markets is definitely the right place for a professional program administrator to be,” he says. * |
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