Specialty supermarket

London American's experienced underwriters provide foundation for growth

By Elisabeth Boone, CPCU

If there’s such a thing as a specialty generalist, a name that comes to mind is London American Risk Specialists, Inc. Based in Houston, Texas, London American is an independently owned surplus lines/wholesale brokerage operation that works with independent retail agents and brokers nationwide to arrange coverage for a wide variety of specialized exposures. The firm has a broad array of underwriting and brokerage facilities, and it offers premium financing on most policies through a subsidiary, Plymouth Premium Finance Company.

London American’s major areas of expertise are general liability, commercial property, inland marine, transportation, energy and utility districts, small business packages, professional liability, social service for-profit and nonprofit D&O, garage liability, and mobile home parks. The firm also offers a liability program for skilled nursing, assisted living, and independent long-term care facilities nationwide, as well as programs for mobile home parks and non-franchised auto dealers physical damage.

London American began operations in 1984, and in 2002 it was acquired by Brady Carruth, who serves as president and chief executive officer. Carruth has deep roots in the Texas insurance business; he is the grandson of an original partner in John L. Wortham & Son Insurance in Houston, and his father had a 50-year career with the agency.

In 1926 the Wortham agency established American General Insurance Company, the first multiline insurer in the state. Carruth served on the board of American General Corporation from 1990 until 2001, when it was acquired by American International Group.

After working for the family agency out of college, Carruth left the insurance field to pursue other business interests, returning six years ago to purchase London American Risk Specialists.

“I’ve always liked the property and casualty business, and I wanted to get back into it,” Carruth says. “I thought London American was a good opportunity for me to do that. What I liked most about it was the chance to get into nonstandard forms of insurance rather than coverages that are actuarially driven,” he explains.

“In the specialty market, you have to be creative; you have to understand your risks and how to insure against them; and you get into niche businesses that are not written by the standard market.”

In its three offices—Houston, Dallas, and Memphis—London American employs a staff of approximately 40 persons, including many seasoned underwriting specialists. In the process of acquiring blocks of business from other specialty wholesalers, Carruth has been able to bring on board veteran underwriters like Dick Davis, who has almost 35 years of experience in underwriting energy business and is executive vice president and branch manager at London American’s Dallas office; Larry Vickery, vice president, who heads up the Memphis office and for much of his 44-year career has specialized in utility and energy risks; and Mike Mullens, a 37-year industry veteran who serves as underwriting department manager at the Dallas office with responsibility for London American’s social services and elderly/residential business.

“These people are great examples of what I’m looking for in underwriting managers,” Carruth says. “They understand their business very well. They can put programs together, they know their markets and customers, and it’s people like them who help us stand out in the marketplace.”

Target markets

As noted earlier, London American has a broad risk appetite and pursues business in a wide range of markets. “We do a lot of Main Street, binding authority business, both general liability and property, “Carruth says. “These are smaller accounts, and they’re our bread and butter. We also have some large casualty brokerage accounts, which are handled primarily out of our Dallas office, and we have a large book of transportation business—trucking liability, cargo, and physical damage—managed by Jennie Triola in the Houston office.”

Another important market for London American is utility districts and energy-related risks. The firm also handles a significant volume of social services business.

London American’s small business coverage is available to a wide variety of small businesses: artisan contractors, home builders, landscapers, churches, day care centers, trade schools, restaurants/bars, dry cleaners, pest control firms, truckers, paint and body shops, and garage operations. Coverage also is available for special events and lessor’s risk only exposures.

On large property accounts, London American’s target markets include retail strip centers, restaurants/bars, hotels/motels, churches, habitational, manufacturing, woodworking operations, municipal and other government risks, independent school districts, onshore drilling rigs, high-value homeowners, and tenant dwelling. The firm also writes all classes of excess property; DIC including flood and wind; and hard-to-place coverages like deductible buybacks, single-peril excess, and one-off properties.

On the professional liability side, London American writes D&O for both nonprofit and for-profit organizations; medical risks; computer consultants; public officials liability; and miscellaneous professional liability for accountants, lawyers, architects and engineers, real estate agents, third-party administrators, mortgage brokers, management consultants, and title agents and abstractors.

We asked Carruth which of London American’s markets he sees as having the greatest potential for growth.

“The energy market certainly is one of them,” he responded. “There’s a lot of activity, especially in our area, in the energy sector, not only in the area of exploration but also on the pipeline and refining side. A large share of our energy business is utility districts, which is managed by Larry Vickery. Another important segment of our business is public entity liability, which is managed by Tom Eller in the Dallas office,” Carruth comments. “We have a great product that we market exclusively throughout Texas and that we’re looking to expand into other states.”

What factors does London American consider when it is deciding whether or not to enter a new market?

“First of all, we need somebody in our office who understands that market,” Carruth says. “The decision is more people driven than anything else. Of course, we have to evaluate what the competition is in the segment, and we need to have a strong insurance company partner to help us put the program together. We have a Cayman-domiciled insurer, and once we’ve put together a program, we evaluate it to see if there’s an opportunity to participate in the risk,” Carruth explains.

Being a stable force in the market is a key value for Carruth and London American’s team of experienced specialty underwriters. “We take a long-term approach,” Carruth says. “We know we have to protect our markets, and we also have to offer competitive products. That’s a balance we have to strike, because if we don’t give our insurance company partners profitable business, we’re not going to be around very long.

“We’re not going to be the most aggressive in terms of price, and we honor the trust our underwriters have built up with our markets,” Carruth continues. “They know we’re going to do the right thing and give them the right kind of business.”

We asked Carruth how he positions London American in the marketplace. “We like to differentiate ourselves on our expertise and service,” he responds. “A lot of people talk about those things, but I believe we really execute. From the timeliness of our quotes, the thoroughness of our underwriting, and the promptness with which we issue policies, to our commitment to delivering excellent service, we think we do the things that set us apart from competitors,” he asserts.

Retail partners

London American has relationships with some 750 retail agents and brokers across the country. Although they place business on behalf of some large retailers who specialize in a particular class of business, London American’s underwriters are more than willing to work with a retailer who may have only an occasional need for their services—even to the extent of accompanying the agent on a call to a client or prospect.

“The larger national retail brokerages have the expertise in-house to handle some of the business that we do,” Carruth says. “The smaller agents do not, but they may have the opportunity to write a certain risk, and we’re happy to be their in-house expert. We have people here who work at our retailers’ booth at trade shows, and they’ll quote risks on the spot for agents as they come by. That’s another value-added service we provide,” Carruth says.

As recently as 10 years ago, few people believed that automation would ever play a significant role in the operations of wholesale facilities like London American. Now virtually all intermediaries are using automation to perform many of the same functions as their counterparts in the standard market, and London American has made a significant investment in technology to deliver products and services to its retail partners.

“From a marketing standpoint, we’ve made effective use of technology,” Carruth says. “We’re in the process of developing online quoting capabilities, which is our link to our customers. We want to make ourselves the easiest people to do business with,” he continues. “Our agents’ time is limited, and they want to work with someone who can operate efficiently and effectively.”

As he contemplates the future of London American Risk Specialists, Carruth believes his firm’s greatest challenge will be finding and retaining the kind of people it needs to continue operating successfully in a complex and demanding market. London American has brought in some top underwriting talent as a result of acquisitions. Carruth points out, however, that current employees also often are excellent candidates.

“We love to promote from within, and giving our people more responsibility and a chance to enhance their careers,” Carruth declares. “We’ve been quite successful in doing that.”

With Brady Carruth at the helm and seasoned specialty brokers and underwriters bringing their expertise to challenging risks, London American Risk Specialists is well positioned to expand its role as a “specialty supermarket.” *

For more information:
London American Risk Specialists, Inc.
Web site: www.londonamericantx.com