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Thomco grows niche by niche Program administrator expands beyond its child care and senior care foundation By Phil Zinkewicz Greg Thompson, chairman and CEO of the Atlanta-based Thomco, a managing general agency that specializes in providing insurance for niche markets in the property and casualty insurance industry, keeps a sharp eye on trends developing in the business. That’s because he prefers not to follow them. “We look for niches that are difficult to insure,” he says. “All of our programs are dominated by volatile casualty exposures.” Perhaps this renegade approach to writing program business that has brought Greg’s firm such success stems from his early days with Thomco, which was founded in 1977 by his father, Roy. Greg had been working with Marsh & McLennan at the time, and his father persuaded him to come on board at Thomco in order to make it a family business. Under his father’s leadership, Thomco was a wholesale operation that pursued a broad range of excess and surplus lines business regionally. When Greg joined the firm, he decided to refocus the company’s efforts into the niche programs area on a national basis. The first area he penetrated was child day care centers, a niche market that generated a great deal of controversy during the 1980s. During that decade, day care centers around the country became prominent in the news because of a spate of allegations of physical and sexual abuse of children. Some of the allegations actually led to criminal prosecutions. Greg remembers those days well: “There was the McMartin Preschool Center case in Manhattan Beach, California, in which a teacher was accused of sexually abusing a 2-year-old boy (1986); the Fells Acres Center case in Malden, Massachusetts, in which a 5-year-old boy told his father he had been sexually abused by a handyman on the center’s premises (1984); the Little Rascals Day Care Center case in Edenton, North Carolina, in which a married couple were accused of sexually abusing children in their care (1989); and a home day care center in White Plains, New York, where the parents of a 3-year-old said the child was sexually abused by the married couple running the center (1987), to name just a few of the more publicized cases. “Some of the cases that came out in the ’80s began with allegations of abuse by one child, only to have other children step forward at a later time with similar accusations,” Greg points out. “Some say it was the power of suggestion, but I don’t think we’ll ever answer that. What we do know is there was a decade of panic among parents who became concerned about day care centers overall.” Because of insurance market conditions—understandably, the market for child care centers hardened considerably—Greg began writing day care centers on a nonadmitted basis with an E&S carrier until he struck a deal with an admitted carrier to write the business nationally. “In 1990, we received the endorsement of the National Child Care Association,” he says. “Today, we are the nation’s leading market for child care.” A growing market Thomco’s Childcare Choice program is a comprehensive package of customized coverages, designed for both profit and not-for-profit operations that provide early childhood education. In addition, the agency offers its In-Home Childcare program, written on an occurrence form with defense costs outside the limit. It includes general liability, sexual abuse and medical payments coverages. The In-Home program has been selected by the National Association for the Education of Young Children and recognized by the National Association of Family Child Care. The agency also insures Head Start projects, a concept that came out of President Lyndon Johnson’s War on Poverty. “These are government grants to nonprofit organizations to provide care for indigent preschoolers,” says Greg. The Thomco executive says that things have changed for the better in the child care arena. “For one thing, regulations have gotten tougher. And there is not the panic that we saw 15 years ago. Therefore, claims have decreased. Also, we’re seeing some shifts in the marketplace. Because of the stiffer regulations, the mom and pop centers with 20 to 50 children are all but disappearing. The fastest growing area is the small chain day care centers.” Because of Thomco’s experience insuring day care centers, the agency naturally gravitated to other programs that fall within the social services spectrum. The agency also provides coverage for facilities that serve the elderly—independent living and assisted living facilities and continuing care retirement communities (CCRCs). “Independent living facilities represent community living for seniors,” Greg says. “There are some special services provided, such as emergency buttons in bedrooms and bathrooms. But other than that, it’s just as if the seniors were living in a condo. Assisted living facilities house seniors who are still ambulatory but who need additional assistance. Here services include helping them to the bathroom, reminding them to take their medicine and all the other activities of daily living. “CCRCs contain an assortment of living facilities all on one campus. A CCRC may have an independent living facility, assisted living and skilled care all on the same premises. Let’s say there’s a married couple and one needs assisted living, while the other requires skilled health care. They can remain on the same campus and not be separated. This sort of ‘aging in place’ is a growing trend in eldercare,” says Greg. Other niche programs that Thomco offers in the area of social services are: • Mental health facilities. This program provides multiline coverage for substance abuse, residential care facilities, outpatient counseling and transitional living. • Facilities for the developmentally disabled. This program provides multiline coverage for residential facilities, sheltered workshops, camps and transitional living. In addition, Thomco offers insurance programs for ambulance services, para-transit operations and hospital fleets. New programs But that’s not the entire Thomco story. In 2006, Thomco added four new national programs to its roster. Two of the programs tie in closely to many of the health care and other social service-related programs for which the agency is already well known. The Home Health and Hospice Choice program covers companies that provide such services as visiting nurse assistance for homebound seniors, as well as firms that offer services that range from handling housekeeping needs to providing medical care. Written by Glencoe Insurance Group, this program is also available for in-home and residential hospice care for terminally ill patients along with emotional support for their families. Another new health-related program is Med Lab Choice, which insures laboratories that collect patients’ specimens required by physicians for evaluation purposes. Thomco also addresses niches that are not related to social services. For example, the agency has a program for pest control operators that provides general liability/E&O coverage and is available for such operations as general spraying, lawn and ornamental, termite control and structural fumigation. The other two programs Thomco introduced last year are designed for tanning salons and “inflatables” exposures. In June of 2006, Greg says, Thomco acquired IMC, a Minnesota firm that insures tanning salons. The $15 million program’s product brand is Tan Pro, and the program is overseen by Paula Whitenight, a Thomco vice president and division manager who operates the regional office the agency recently opened in Minneapolis. Thomco’s fourth new 2006 program is Fun Pro. It focuses on organizations that arrange special events featuring such attractions as inflatable slides, portable climbing walls and moonwalks. Typical examples of entertainment and hospitality events that require this particular niche of specialty insurance are fairs, church bazaars, craft shows, one-day children’s birthday parties, and catering and other activities connected with such short-term events. Zurich underwrites both Fun Pro and Tan Pro for Thomco. Active in Target Markets Greg’s expertise as a program administrator speaks for itself. On the board of Target Markets Program Administrators Association (TMPAA) since its inception in 2001, he currently serves as the association’s president. During his years with Thomco, Greg has seen his share of market fluctuations, and he has his own ideas on how to deal with them. “We’re just coming off several years of a hard market during which industry earnings have been very attractive,” he comments. “Today, the market is soft all around. How do you keep business when competition becomes fierce? You counter the soft market with value-added services and selective pricing. “We have risk management and loss control experts visiting our clients. We have an online safety training program for drivers of ambulances,” Greg explains. “We offer a risk management and loss control newsletter to our clients, and we are constantly monitoring our clients’ performance. These are just some of the things we do during soft markets to keep our best clients with us. “We also try to identify ‘loss drivers’—account characteristics that increase the chance of loss,” Greg says. “We will not reduce our rates on accounts with key loss drivers, but we will reduce rates on those which do not have them.” * For more information: |
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