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Target Markets Program Administrators Association Vendors Programs and the London market With ties to the U.S. and UK, Rattner Mackenzie successfully places program business through Lloyd's brokers Despite property and casualty insurance losses resulting from last year’s hurricanes, including Katrina and her sinister siblings, overall, the property and casualty insurance marketplace appears to be relatively soft, with the exception of cat cover along the Southeast. Insurance companies may be holding the line on rates and contract terms in order to maintain the underwriting profitability it has enjoyed in the past two years, but availability is not a problem for most lines. In times such as these, program administrators—even those with the most exotic exposures—are able to sit back and breathe sighs of relief as insurance markets continue to entertain their sometimes volatile exposures. But, history has shown us that insurance is a cyclical business. And, in recent years, the downside of that cyclicality has often erupted with a vengeance. Mark E. Rattner, a specialist in program business, is not a man who finds comfort in sitting back and merely enjoying favorable market cycles. “Survival in the insurance industry means more than playing the game,” he says. “Success requires companies to be risk takers, leveraging strengths and positioning products for challenges that lie ahead.” Rattner is currently president of the North American operations of London insurance brokerage firm Rattner Mackenzie, a firm that specializes in both insurance and reinsurance. Based in London—with offices in Bermuda and New York—Rattner Mackenzie offers insurance programs and services in the areas of aviation, property and casualty, captive setup and management, kidnap and ransom, legal expenses, surety life and accident and health, terrorism and trade credit and political risk. The firm employs more than 70 people and during 2005, placed in excess of $580 million gross premium in worldwide markets, including the United States, Bermuda and Europe. Rattner Mackenzie consistently appears in the top quartile for timeliness of premium payment to underwriters. One of the more interesting facts about Rattner Mackenzie is that it was formed and approved as a Lloyd’s of London broker in 1989 without having been “umbrellaed” by another Lloyd’s broker. Even more interesting is that it has its origins right here in the United States. “A principal shareholder of Rattner Mackenzie was Professional Indemnity Agency (PIA), based in Mount Kisco, New York,” says Rattner. Both companies are now wholly owned subsidiaries of HCC Insurance Holdings, Inc. “PIA was started by my father, Marshall Rattner, who passed away in 1991. I took over the running of the business in that year.” Professional Indemnity Agency is an underwriting manager and a provider of specialty insurance products. Established in 1977, PIA’s initial charge was to underwrite trustee and fiduciary liability. Today, the agency is a leading provider of kidnap/ransom, extortion and detention, product recall, miscellaneous professional liability, nonprofit organization liability, corporate fiduciary liability, directors and officers for private companies, employment practices liability and a host of diversified financial products. “We decided to start up a London brokerage for various reasons,” says Rattner. “In the first place, as the excess and surplus lines markets were becoming more competitive, we recognized there was a need to deal with admitted markets as well as nonadmitted markets. Then, too, we already had a relationship with Lloyd’s because that was one of our primary markets. Even with the changes that have taken place today, Lloyd’s is more of an entrepreneurial market as opposed to one that is company driven. Therefore, it is a market that is well suited for doing business in the specialty risk area. Also, there is a loyalty factor with Lloyd’s syndicates that, in my opinion, is unparalleled in the domestic marketplace. We started out in London, branched out into Bermuda and then opened up the North American operation several years ago.” Rattner says that his approach to program business is to match the firm’s program managers with just the right syndicates at Lloyd’s. “That way, we can create an economic relationship as well as a long-term relationship,” he says. “We don’t just take on any account. We do our best to place profitable business with our business partners. Too many brokers just want to get the business placed, without considering profitability.” As an example of how “special” is the specialty business that Rattner Mackenzie places, the firm recently began offering “Seedmens Errors and Omissions Insurance” for those involved in the seed industry. “We recognized that everyone who is involved in growing, conditioning or distributing seeds needs E&O coverage,” says Rattner. “At any stage of the seed business, mistakes can occur in the selection, conditioning, packaging or testing of the seed, which can cause or contribute to the loss in whole, or in part, of the customer’s crop. Even the most professional of organizations may suffer from a lapse in standards by a distracted staff member, which can seriously impact the company’s balance sheet if there is no applicable insurance. This is a coverage that should be carried in addition to product liability insurance because they complement each other.” Seedmens E&O falls under Rattner Mackenzie’s casualty operations, which also include allied health and nursing home cover, directors and officers liability insurance, employment practices liability insurance, law firm professional liability insurance, medical and dental malpractice insurance, miscellaneous professional liability insurance and program business insurance. Rattner says that his relationship with the Target Markets Association began when he was president of PIA. “I met them as an MGA who was interested in the concept of an association geared solely to program administrators. I am anxious to introduce Target Markets members to the Lloyd’s community. Very often, domestic carriers have very strict requirements for the first year of a program. They look for larger programs right from the start. Lloyd’s syndicates are more willing to take on small programs and then grow with the programs.” However, Rattner advises that program administrators who want to do business with Lloyd’s be prudent. “Program administrators should go to London, visit with people with whom they are considering doing business. Visit with more than one Lloyd’s broker. I can say without hesitation that program administrators will get good treatment at Lloyd’s, although not exclusive treatment. If a program administrator is comfortable with that and trusts the process, then he or she will find that it is a market that stays through thick and thin.” * |
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