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Target Markets Program Administrators Association Carriers Meadowbrook Insurance Group In 2005, Meadowbrook Insurance Group celebrated its 50th year in business and enjoyed its most profitable year with a record net income of $17.9 million. Meadowbrook’s president and CEO, Bob Cubbin, and Archie McIntyre, senior vice president of the business development unit, say the firm is well positioned to continue growing and prospering. The company generates and manages over $650 million in premiums, has 23 full-service regional branch offices and employs over 650 people. Meadowbrook owns and operates four insurance carriers plus an offshore rent-a-captive facility. The carriers are Star Insurance Company, Savers Property & Casualty Insurance Company, Williamsburg National Insurance Company and Ameritrust Insurance Corporation. The offshore (Bermuda-domiciled) rent-a-captive facility is American Indemnity Insurance Company, Ltd. Meadowbrook focuses on small-to-mid-sized commercial property and casualty programs. “We seek niche books of specialty business from associations, specialty agents and program administrators,” says McIntyre. “Our major lines of business include workers compensation, commercial package and professional liability programs. “Meadowbrook’s back-room operations provide full third party administrative services for other unaffiliated carriers, select programs, public entities and self-insured groups,” McIntyre continues. “Additionally, we work in partnership with other unaffiliated carriers to distribute their insurance products through our regional networks of independent agents.” McIntyre says that the alternatives to traditional insurance markets include captive arrangements, group captives, rent-a-captives and other forms of self-insurance. Cubbin emphasizes that the alternative approach offers a degree of control often not possible in the traditional market. This includes coverage availability, price stability, focused loss control efforts, direct access to reinsurers, and participation in underwriting profits and investment income. Says Cubbin: “We help our producers assess the risk/reward benefits of forming a risk-sharing partnership with Meadowbrook. Our program partners receive compensation not only through commissions, but also by sharing in the underwriting results. This provides a financial incentive to ensure profitable program business by selecting the best risks. By working with us, groups and associations can also gain further control of their businesses and participate in the favorable results of their risk management efforts.” Cubbin and McIntyre say that specialty programs that use an alternative risk mechanism such as risk sharing continue to grow in importance. “It’s an efficient and more profitable way to administer program business,” says Cubbin. The Meadowbrook executives say that, in recent years, the group has strengthened its underwriting capacity. Over the past three years, Meadowbrook has raised over $114 million in capital to support its controlled growth initiatives. As of March 31, 2006, shareholders’ equity stood at $180.9 million. In May 2006, A.M. Best reaffirmed the firm’s B++ (Very Good) rating and also upgraded Meadowbrook’s outlook from Stable to Positive. Cubbin says, “The upgrade of our outlook to positive is an indication that our financial and market trends are favorable for a potential near term upgrade. While we are pleased with Best’s recent rating actions, we continue to work diligently toward obtaining a rating upgrade to A-.” McIntyre says that Meadowbrook’s future growth will be generated from a combination of existing agent and association business and new specialty business development. “We are looking to further expand our excess and surplus lines business in the specialty program business area,” he says. “We want to form long-term business relationships by tailoring our products to our clients’ needs and by providing excellent service levels.” Meadowbrook envisions its role in Target Markets as more than just another insurance carrier. “We’re more than that,” says Cubbin. “We’re a risk management company that focuses entirely on specialty programs. We have an agency orientation, history and culture. We couple that with expertise in all insurance company services necessary to manage profitable program business.” Continues McIntyre: “By being a member of Target Markets, we believe we can assist the top program administrators by bringing our expertise to the equation.” * |
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