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SPECIALTY LINES MARKETS Commercial vehicles By Larry G. France The risks that fall into this class of business are quite diverse. Nearly every one could be the subject of a Specialty Lines article on its merit. The numbers of carriers that play in this arena comprise a very small number and must be extremely experienced in the lines they write. We have focused on the following classes: Armored Car Services The cost of fuel has a great impact on all of these categories. Up until the past few months, some independent drivers were forced to sit their equip-ment because the cost of fuel and other operating expenses prevented them from breaking even. This can have a serious impact on the risk because drivers may be forced to play catch-up when a chance to make a profit returns. Recently, we have seen a decline in the price of oil; however, normal winter temperatures and changes in the inter-national scene can produce a quick, upward spiral in oil and gas prices. Another underwriting consideration is the training and experience of the operators. With long-haul trucking, for instance, the lack of drivers available in the past few years has put many young and/or inexperienced drivers behind the wheel. “Trucking risks faced a number of demands in 2006,” says Amy Zettel, senior vice president at United Brokers. “Soaring fuel prices aside, companies are cracking down on experience and acceptability resulting in a small window of opportunity for the small fleet to expand to growing demands by their shippers.” Zettel points out that “a minimum of two years CDL (commercial driver’s license) in like equipment is the standard they are seeing, but there are companies counting seat belts and other non-moving violations against the driver, which often places them outside the company’s guidelines. “This is an attempt to further qualify the best drivers behind the wheel but places a hardship on the trucking company to meet the demands of the insurance package, as well as shippers who are pushing them to haul more freight. “Capacity is not an issue,” continues Zettel, “however, it may become a factor given the lack of new markets entering the transportation arena and continued demands for trucking services. This becomes an even larger issue for risks hauling the tougher commodities such as coal and hazardous materials when there are fewer insurers to choose from.” Zettel adds that many carriers prefer to use mileage to determine the baseline pricing. Miles by state or IFTA is being emphasized. “New technology and increased regulations by DOT are placing strong emphasis on more information regarding where the vehicle is traveling. As a result, underwriters can do a better job in pinpointing the major metro exposures,” which impacts rates. The diversity of the commercial vehicle market presents many opportunities. On the other hand, it also sometimes is blurred. Addressing that point, Janner Holliday, president and CEO of International Brokerage and Surplus Lines, Inc., says that he finds the commercial automobile market segmented, “a condition that has continued for some time. The segmentation stems from when an agent is attempting to place the ‘core’ policy, which is the auto liability policy.” The segmentation breaks into two large divisions of commercial auto—trucking and regular business auto. “In trucking we see further segmentation—fleets (large risks) and non-fleet (smaller risks or what is known as owner/operators). “With regard to market availability and viability, the business auto and large trucking fleet risks have enjoyed, for the most part, good selection, pricing and availability of coverage—all on a moderately consistent basis,” says Holliday. “The non-fleet risk continues to struggle with widespread availability issues and sometimes that is even more fragmented within state boundaries. It also struggles with consistent pricing. As underwriters, we continue to see environment play the largest part in driving market components, which is made up of both the physical risk (location/garaged/vehicles driven), and the legal environment of the risk’s location. Good underwriting, policy and program construction combined with responsible pricing continue to be the key elements in solidifying the market availability, regardless of the nature of the risk.” Limo Services over the years has been close to the crisis stage in trying to obtain coverage. Many companies have been forced to close their doors because carriers have had no appetite for that class of business. This has happened in other situations pertaining to difficult types of risks with commercial vehicles, taxicabs, municipal vehicles, and ambulances, among others. Howard Handler of THOMCO has been placing ambulance risks for 27 years. During those 27 years, he says, “I have witnessed 35 carriers come and go; today there are fewer than five. Our clientele consists of 615 medical transport accounts in 46 states. We offer package coverage with limits of up to $5 million primary and an additional $10 million excess.” Handler says the market is markedly softer which limits the number of new players, and the existing ones are becoming more aggressive. When you are involved in specialized risks—as many commer-cial vehicle accounts are—you want to take a very active role in assisting the clients with loss control and safety issues. This will reap benefits for the client, carrier and placing agent or broker. THOMCO’s Ambulance Plus program has introduced Internet software that includes online training for their insureds called “Arrive Alive, Do No Harm.” THOMCO also conducts an annual safety conference—EMS Safety Net—and sends a weekly e-mail safety briefing to its clients. “In 1986, a retail agent approached us with a few limousine accounts that were experiencing difficulty in obtaining affordable auto liability coverage and, in some cases, were unable to obtain any coverage at all,” says Ed Maucere of London American General Agency, Inc. “Many would be forced to go out of business if a solution could not be found.” Also attending this meeting with the retail agent was “a gentleman who was familiar with both the livery business and the then new 1986 Federal Risk Retention Act. He suggested that the limo operators form a risk purchasing group and find a carrier or carriers that would write this homogeneous group of limo operators.” In early 1987, the Professional Association of Limousine Operators, Inc, was formed, headed up by some of the operators, who approached London General Agency to provide a market. Maucere says that the market was very different 20 years age and that today’s pricing is “almost half of what it was then. Inflation is not considered in the transportation risks. On the East Coast, we have to apply credits to retain the business we have had on the books for many years. We have held our pricing for the past few years and, unfortunately, some companies that believe this area of transportation is extremely lucrative are driving the pricing below profitable underwriting margins.” According to Maucere, “The trucking side of the market is getting more competitive. When you are providing coverage on large trucking accounts, you are going to get your share of full limit losses. You need to underwrite for frequency, but the carrier also needs to know that limit losses will occur no matter how good your underwriting is. Most good trucking carriers are barely making an underwriting profit, so how does becoming more competitive to obtain this class make any sense to anyone?” he concludes rhetorically. For additional information go to www.insurancemarketplace.com. Descriptions of each type of commercial auto risk are displayed with markets available for each class and territory. Upcoming Specialty Lines articles are Contractors for February, Recreational Vehicles (land and water) for March and Special Events, Prize Indemnity, Weather Insurance for April. The following have responded to our survey and have indicated that they are a market for one or more Commercial Vehicle risks. Aberdeen Insurance Group An MGA/E&S broker that operates in DE, MD and PA with limits of $1 million. Target classes are airport shuttles, non-emergency transit, limos, and contractors taxi companies. Will not write individual taxi owners. Can offer property, GL and inland marine. All carriers are rated B+ or better. AequiCap An MGA that operates in FL, GA, OK and SC with limits of $1 million. Target classes are extra heavy tractors, dump trucks and auto haulers. Will not write Haz-mat. Can offer cargo, physical damage and truckers GL. AequiCap Insurance Company is rated B+. Agency Specialty Product Network An MGA/E&S broker that operates in all states with various limits. Target class is transportation. All carriers are A rated. All Risks, Ltd. and All Risks of CA Insurance Services, LLC An MGA/E&S broker that operates in various states depending on target class with limits that also vary by class. Target classes are local/intermediate trucking, long-haul, public auto, contractors, non-emergency medical, public livery, aggregate haulers, garbage refuse, ambulances, and wholesale/retail delivery. Will not consider certain hazardous commodities. Can offer liability, excess, physical damage, cargo and GL. Carriers are Canal, Northland, National Casualty/Scottsdale, National Indemnity, Empire Fire & Marine, Colony (Argonaut Midwest), Carolina Casualty, and American Country. Arlington/Roe & Co., Inc. An MGA that operates in IL, IN, KY, MI, OH and TN (all states physical damage) with auto liability limits of $1 million - $5 million, cargo limits of $250,000 and physical damage total insured value of $15 million. Target classes are garbage/waste haulers, trucking long-haul, monoline cargo/physical damage, sand/gravel haulers, truck tractor sales/service, limos, business auto (all classes), and day care vans. Specializes in difficult risks. Will not write hazardous materials. National Indemnity, Stratford, Canal, Northland, AIG Transport, Chubb, Hartford, Colony, Great American, and Lloyd’s are the A rated or better carriers. Bedford Insurance Services, Inc. An MGA/underwriting manager that operates in AL, AR, AZ, CA, CO, GA, IA, ID, IL, IN, KS, KY, LA, MD, MN, MO, MS, MT, NC, ND, NE, NM, NV, OH, OK, OR, PA, RI, SD, TN, TX, UT, WA, WI, WV and WY with limits of $1 million CSL. Target class is short-term auto and truck rental. Can offer liability and physical damage. Carriers are Northland and Northfield, both A rated. BISYS Specialty Programs An MGA that operates in all states except MA with primary CSL limits for ambulance, paratransit of $1 million (higher limits available), excess limits of up to $5 million, and deductible/insured retention placements considered; primary CSL for commercial vehicles, limos and fleet vehicles-public auto limits of $300,000 - $5 million (deductibles up to $25,000 maximum); and for trucking, $25,000 maximum deductible, $1 million primary CSL (higher limits available) and non-trucking, specified perils and collision, $500,000 - $1 million CSL, $1,000 or $2,500 deductible. Target classes are: (1) ambulance (paratransit): ambulette, alternative transport providers as part of transit, municipal entities and/or private contractors non-emergency ambulance, senior citizen transportation providers, and social service agencies Will not write livery—available through public auto program—private passenger fleets, taxis, or 911/emergency response vehicles. Can offer auto liability, EPLI, excess and umbrella, GL, physical damage and workers comp. (2) commercial vehicles, limos and fleet vehicles—public auto: airport shuttles, charter buses, contract school buses, entertainer coaches, limos, sightseeing buses, or transit buses. Will not write paratransit or taxis. Can offer auto liability, EPLI, excess and umbrella, GL, physical damage and workers comp. (3) long-haul trucking (trucking and non-trucking): commodities (all types), dumping operations (AL, FL, OH), local and intermediate trucking, mix in transit, operations in business of transporting goods, sand and gravel, and small and large fleet. Will not write brokerage operations, logging operations, Haz-mat; for non-trucking will not write concrete aggregate haulers, Haz-mat carriers, livestock, loggers, panel or cargo vans, or pickups (hot shot units). Can offer auto liability, EPLI, excess and umbrella coverage, cargo, GL, occupational accident coverage, physical damage, storage tank liability, UM/UIM, PIP (statutory), and workers comp. The A- or better carriers are Lincoln General, Empire Fire & Marine, Lexington, Lloyd’s, ACE, AIG, and Adriatic. Bohrer-Croxdale & McAdoo, Inc. An MGA that operates in AR, IL, KS and MO with limits of $1 million - $5 million. Target classes are local/intermediate, operations up to 500 miles, limos, taxis, contractors, dumps, gasoline, driving schools, sand/gravel, tow trucks, law enforcement, and non-trucking. Will not write chemical or explosives haulers. Can offer motor truck cargo, truckers GL, and physical damage. Carriers are Empire Fire & Marine, National Casualty, National Indemnity, Northland, and National Liability & Fire. Brecht & Associates An MGA/E&S broker that operates in TX only with CSL limits of $1 million and excess of up to $5 million CSL. Target classes are regional truckers, dump trucks, tow trucks, garbage trucks, sand/gravel, and miscellaneous commercial auto. Will not write long-haul, buses over 16 passengers, taxis, or truck daily rental. Can offer physical, cargo, garage liability including GKLL and in-tow, excess and umbrella. Acceptance Indemnity (A-), and Home State County Mutual are the carriers. Burns & Wilcox Ltd. An MGA that operates in AZ, CO, ID, MT, NM, NV, UT and WI with primary limits of $1 million (binding authority) and unlimited access on excess. Target classes are long-haul to local business auto risks, public livery to logging risks requiring state and/or federal filings. Will not write pizza delivery or monoline hired/non-owned auto. Can offer motor truck cargo, excess limits and monoline physical damage. The admitted binding markets are Canal (A+), National Casualty (A+), Essex (A) and have in-house arrangements with Lloyd’s. Central Insurex Agency, Inc. A general agent operating in OH only with limits of $1 million. Target classes area local, intermediate, long-haul, primary and non-trucking. Northland is the A rated carrier. CrossRoads General Agency An insurer/general agency that operates in all states with CSL limits of up to $5 million. Target class is limousines. Can offer auto liability and auto physical damage. National Interstate is the A rated carrier. Crusader Insurance Co. An insurer that operates in CA only with garage limits of $1 million CSL and $1 million/$2 million OTA. Target class is contract tow companies (fleets of five or more). Can offer GKLL, on-hook, cargo, and property. Crusader is rated B+. Gateway Underwriters Agency An MGA/E&S broker that operates in AR, IL, KS and MO with public transportation limits of $5 million and trucking limits of $1 million. Target classes are limos, day care, church social service, contractors, and dump trucks. Will not write Haz-mat haulers. Oak River and National Indemnity are the A++ carriers. Hull & Company, Inc. An MGA/E&S broker that operates in FL, NC and SC with limits of up to $1 million. Target classes are local/intermediate trucks & trucking, public livery, and non-emergency transport. Will not write most Haz-mat risks. Can offer garage liability/garage keepers, and motor truck cargo. All carriers are rated A- or better. Insurance Innovators Group An MGA that operates in DE, MD and PA with limits of up to $2 million. Target classes are wholesale/retail delivery, petroleum transport, cement trucks, contractors, crane/boom trucks, dump trucks (PA only), garbage trucks and truckers. Will not write dump trucks outside of PA or long-haul over 300 miles. Can offer hired, non-owned, broadened pollution, state/federal filings, and stand-alone physical damage. The A rated carriers are Empire Fire & Marine, Lloyd’s and Argonaut-Midwest. International Brokerage and Surplus Lines, Inc. An MGU that operates in all states with various limits. Target classes are non-hazardous trucking, over-the-road and dump (dry, flatbed, refrigerated, autos/boats, aggregate, and brokers). Will not write Haz-mat. Can offer motor truck cargo, physical damage, truckers GL, and brokers contingent cargo. Lloyd’s and Markel are the A rated carriers. Jimcor Agencies An MGA/wholesaler that operates in CA, CT, DE, FL, GA, IL, IN, MA, MD, MI, NC, NH, NJ, NY, PA, OH, RI, SC, TX and VT with primary limits of $1 million and excess of up to $5 million. Target class is trucking. Will not write taxis, limos, ambulances, or coal. Can offer auto liability, physical damage, cargo, hired (non-owned) auto, trailer, interchange, contingent cargo, excess/umbrellas for truckers, and GL. All carriers are A rated. Klinger Associates, Inc. A wholesale E&S broker operating in IN and the Midwest with limits of $1.5 million plus excess. Target classes are taxis, motor truck cargo, and physical damage. All carriers are rated A or higher. Lancer Insurance Company Target market is limousines. M.J. Hall & Company, Inc. An MGA/E&S broker operating in AK and CA with limits of $10 million-plus. Target classes are trucking and taxis. Can offer GL and property. National Liability & Fire (CA only) (A++), Scottsdale (A+), and Essex (A) are the carriers. M.J. Kelly Co., Inc. An E&S broker operating in AR, CO, IA, IL, KS, MO, MS, NE and OK with limits of up to $10 million. Target classes are local/long-haul trucking, dump trucks, garbage haulers, hot-shots, contractors, wreckers, cement mixers, auto transit, logging, gas/oil haulers, farmers, and all public including taxis, limos, non-emergency medical, ambulances, all buses including day care, church, charter, etc. Can offer in-tow coverage and cargo and excess limits. National Indemnity, Stratford, Essex, Acceptance, Colony, Lloyd’s, and AIG are the carriers. McLeckie Insurance Group An MGA/surplus lines broker/Lloyd’s coverholder that operates in all states with limits as required. Will not write taxis or ambulances. Can offer physical damage, trailer interchange, motor truck cargo, and excess cargo. Carriers are Underwriters at Lloyd’s and Great Lakes Reinsurance U.K. Metcom Excess An MGA/wholesaler operating in CT, DE, MD, NJ, NY and PA with limits of $1 million. Target classes are long-haul trucking, service auto risks, non-truck, MTC, and sand/gravel haulers. Will not write taxis, limos or ambulances. All carriers are A rated. Midlands Management Corp. An MGA operating in AR, KS and OK with CSL limits of $1 million. Target class is trucking. Will not write Haz-mat, oil/gas industry, Class 1 commodities, taxis, limos, or business auto risks. Can offer auto liability, auto physical damage, motor truck cargo, and GL. All carriers are rated A- or better. National Interstate Insurance Co. An insurer that operates in all states with all limits. Target classes are intermediate and local haul; motor coaches; school buses; transit buses; and private and associated with public transits. Will not write taxis or ambulances. NIIC is an A rated company. NIF Group, Inc./NIF Pro An MGA that operates in CT, NJ and NY with limits of $1 million. Target classes are contractors and commercial. Will not write couriers, fast food delivery, medium/long-haul transport, taxis, limo, or individually owned private passenger. Can offer excess auto. All carriers are A rated. NSM Insurance Group An MGA that operates nationwide with primary limits of $1 million and umbrella limits up to $25 million. Target class is all transportation-related risks. Will not consider charter buses. Can offer property, CGL, crime and cargo. Carriers are A rated or better. Roush Insurance Services, Inc. An MGA operating in IL, IN and OH with limits of $1 million (higher limits available with excess coverage). Target classes are small commercial fleets with 300-mile operating radius, small taxi fleets with three or fewer operators, taxi fleets in business for at least five years, airport shuttles, ambulances, dump trucks, limos, and tow trucks. Will not write long-haul. Can offer non-trucking (bobtail, deadhead), environmental, Haz-mat, motor truck cargo, and excess liability. National Casualty (A+), Scottsdale (A+) and Essex (A) are the carriers. Russell Bond & Co., Inc. An MGA/E&S broker operating in CT, MA, NJ, NY, PA and VT with primary auto liability limits of $1 million (excess up to $50 million), and motor truck cargo limits of $250,000 (excess up to $1 million). Target classes are auto haulers, hazardous auto, garbage haulers, and long-haul. Can offer auto liability, auto physical damage, excess auto liability, GL, property, and workers comp. All carriers are rated A- or better. S.H. Smith & Co. An E&S broker that operates in all states with limits of $1 million and up. Target class is petroleum. Can offer umbrella and physical damage. All carriers are A rated. Southern Insurance Underwriters, Inc. An MGA/E&S broker that operates in AL, FL, GA and SC with primary limits of $1 million to $2 million. Target classes are long-haul, waste haulers, tow trucks, and all public classes. Will not write logging. Can offer excess auto limits up to $5 million. All carriers are A rated. Swett & Crawford An MGA/E&S broker that operates in all states (with incidental Canadian exposure) with limits as needed by client. Target class is all commercial transportation. Will not write personal lines. Can offer cargo, GL, physical damage, excess liability and umbrellas, buffer layers, EPLI, and SIRs. Carriers are A- or better. Thomco Insurance An MGA/MGU/national program administrator that operates in all states except AK, DC, HI, MA, NJ and NY with primary limits of $5 million and excess of $10 million. Target classes are ambulance services and other medical transportation business. Can offer commercial auto, GL, professional liability, inland marine, property, excess and workers comp. Carriers are Zurich (A+) for primary and Rock Hill for excess. Transport Specialties, Inc. An MGA/wholesale broker that operates in all states except AK, HI, MA and NY with non-trucking liability limits of $500,000-$1 million. Target class is owner-operator fleets of 15 or more. Will not write primary liability, cargo, excess or workers comp. Great American and Zurich are the carriers. Truckers Insurance Associates, Inc. An MGA that operates in AR, CO, IA, IL, KS, MN, MO, ND, NE, OK, SD, WI and WY with liability limits of $5 million, physical damage limits of $250,000 and cargo limits of $500,000. Target classes are trucking, limos, business autos, and public autos. Can offer auto liability, GL, physical damage, cargo, property, inland marine, and workers comp. Northland (A), Carolina Casualty (A), Zurich (A), Maxum Casualty (A-), and AESIC (A) are the carriers. Unifax Insurance Systems, Inc. An MGA that operates in CA only with CSL limits of $1 million and OTA limits of $1 million/$2 million. Target classes are contract tow companies (fleets of five or more). Can offer GKLL, on-hook, cargo, and property. Crusader is the B+ rated carrier. United Brokers, Inc. An MGA that operates in 28 states with limits up to $5 million. Target classes are all trucking (Haz-mat in some states) and taxis. Can offer auto physical damage, cargo, GL, property, umbrella and excess. Carriers are Occidental Fire and Casualty (A-), Lincoln General (A-) and National Casualty (A+) W.A. Schickedanz Agency, Inc. An MGA/surplus lines broker operating in AR, IL and MO with primary limits of $1 million and excess of $10 million. Target classes are local/intermediate/long-haul truckers (up to 50 units), dump trucks, garbage hauler, tow trucks, limos, taxis, and buses. Will not write Haz-mat. Can offer GL, cargo, workers comp (local and intermediate only). Acceptance Casualty (A-), Argonaut-Midwest (A), Lloyd’s (A), National Indemnity (A++), Occidental Fire & Casualty (A-), and Universal Casualty (A-) are the carriers. Western Experts in Transportation A program administrator that operates in all states except AK, DC, HI, LA, MA, MS, NJ and NY with limits of $5 million. Target classes are public auto-limos, airport shuttles, entertainment, sight-seeing buses, courtesy buses/vans, social service. * |
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