Special Section sponsored by TMPAA

Munich Re America’s Specialty Markets

Turning risk into value

The soft market has insurance carriers and managing general agents (MGA) sizing each other up for growth opportunities. Some are thinking mergers and acquisitions, while others favor expanding classes of business and product lines. Whatever the strategy, the right relationships can mean the difference between long-term, profitable growth or following the downslide of a softening market.

Munich Re America’s Specialty Markets division focuses on MGAs and program administrators (PA) who are interested in increasing profit by taking underwriting risks on their insurance program. Following this philosophy, Specialty Markets helps clients find value and growth in a soft market.

“We target best in class MGAs and PAs whose risk taking philosophy and underwriting standards are in line with our own,” says Craig Smiddy, president of Munich Re America Specialty Markets. “We’re essentially looking for opportunities for business alignments. In fact, much of our growth comes from developing niche programs with existing clients.”

As a division of Munich Reinsurance America, Inc., and part of the Munich Re Group, Specialty Markets has access to experts in virtually every field of underwriting, actuarial, claims, systems, and supporting services. This expertise, combined with Specialty Markets’ insurance and reinsurance capabilities, results in unmatched product and service offerings.

Because Specialty Markets is organized by client type rather than line of business, our clients have one designated point of contact who knows their business well. “Ease of doing business is a top goal within our insurance program strategy,” says Smiddy.

Being selective and choosing the right partners allows Specialty Markets to extend control of the program. Any program manager who’s had to switch carriers and start over, leaving an updated loss experience and processing system with the former carrier, knows the value of control. The modest commission earned can’t substitute for the profitable program and goodwill that required years to develop.

“We see better program results when the administrator has a stake in the business, rather than just earning a flat commission,” explains Smiddy.

Many program managers are finding value and control by unbundling services from the carrier. “Some program managers prefer to work with a simpler, bundled business model,” observes Smiddy, “while others want to manage every component of their premium dollar. We understand and encourage this approach.”

Paid claims account for most of the premium dollar, making claims handling a prime target for unbundled savings. “We’re perfectly willing to unbundle claims services to allow program managers to use approved third-party claims administrators or handle the claims themselves if they meet our qualifications,” says Smiddy.

Program managers also have access to Specialty Markets’ policy rating and issuance system, which supports standard ISO products, workers compensation and other products with customization. “And we can often work with program managers who have their own policy management systems to build electronic interfaces between their systems and ours. We take the time to get to know your business and offer the products and services you can benefit from,” says Smiddy.

Specialty Markets offers “A” rated paper for commercial lines through American Alternative Insurance Corporation, an admitted insurer in all 50 states and the District of Columbia, and we offer surplus lines through The Princeton Excess and Surplus Lines Insurance Company’s licensed surplus lines producers.

For more information about Specialty Markets’ products and services for MGAs and program administrators, visit http://www.munichreamerica.com/specialtymarkets. *