One-upping the economy

CNA steps in to help small businesses survive

By Phil Zinkewicz

Insurance journalists writing about the insurance industry have often begun their articles with something like, “Property and casualty insurance companies doing business in today’s industry marketplace,” and then have gone on from there. The reason for this is that many journalists writing about a particular industry prefer to remain insulated from outside elements and choose to compare and contrast individual company performance based upon what other companies are doing within their own world.

Today, however, insurance journalists are more likely to begin their pieces with, “Property and casualty insurance companies doing business in today’s cement mixer economy,” and then continue on. That is not to say that the economy has not been a consideration when writing about the industry in the past because, of course, the industry is tied to the economy in many different ways. But never before has the economy had such a detrimental effect on the business of risk.

Rampant unemployment saps the premium dollars insurers would be receiving from gainfully employed workers who buy cars, homes and other consumer products. Mom and pop small commercial establishments have gone out of business. Visit the strip malls around the country and observe the number of small shops that have closed down. All of these represent the loss of premium dollars for insurers.

Fewer premium dollars for companies mean smaller commissions for independent agents. Personal lines auto and home owners and small commercial Main Street businesses are the bread and butter accounts for many small agencies.

Today, many agents are hoping that the prolonged soft market will harden, but prognosticators have been less than accurate with their forecasts. Some industry analysts said the hard market was going to end in the latter part of this year. It hasn’t happened. Some are saying that the hard market will come in 2010, but as yet there are no definite signs of that. Will it come in 2011? Maybe; maybe not.

“We’re not waiting for the hard market,” says Michael W. Coyne, senior vice president of CNA Business Insurance, which includes small businesses. CNA describes small businesses as accounts with $9 million in property at any location or $20 million in property total. “Because of the broad-based recession and the soft market, our agents are hurting. They’re being squeezed. Some of them are fighting for their lives. We’ve got to help them now, without waiting for a turnaround.”

Coyne says he is excited that CNA has built a “compelling value operation” in the small business arena and that the company has invested heavily in the small business community. “The product we offer is called CNA Connect®,” says Coyne. “It offers broad coverages, and they are flexible as well. We recognize that some agents have clients with very specific needs, and the agents can address those needs through Choice Endorsements. These endorsements can address the needs of restaurants, technology firms and medical facilities, as well as other industries.”

For example, the company recently announced that its agents can now write eligible life science organizations through CNA Central. Says Coyne: “With our new Advanced Medical Technology Choice Endorsement for CNAConnect, we’re making it easier for agents to offer a suite of coverages designed to cover the unique risks these companies face, such as those associated with biotechnology, medical diagnostics, or therapeutic and surgical devices.”

Coyne says the large and growing universe of smaller, start-up research and development entities is a critical component of CNA’s HealthPro Advanced Medical Technology business. “Now we are providing our expertise and easy-to-use technology for these smaller companies via CNA Central. Currently, this includes exposures in the states of Arizona, Colorado, Connecticut, Illinois, Indiana, Michigan, Minnesota, Nevada, New Mexico, Pennsylvania, South Carolina and Tennessee.

“Our Connect Choice Endorsements allow agents to customize their clients’ insurance by combining the most common options under one endorse­ment,” Coyne continues. “Specialized CNA Connect Choice Endorsements are also available for accountants, lawyers, building owners, eating establishments, medical facilities and technology companies. We are committed to working with our agents to development more industry-specific endorsements to meet their client’s needs.”

Agents are always interested in a company’s “appetite” for business so that they can avoid wasting time submitting business for which the company has no interest. CNA has let it be known in the marketplace that its appetite for new business is broad—but went a giant step further. The company publishes a “focus list,” which informs the agent not only of the company’s interest in a particular type of business, but also the areas where the company has been successful in the past. The list includes: medical hospital and surgical supply store; shoe store; housewares store; book store, news dealers stand; sporting goods store; gifts, novelty souvenir store; fabric store; pet store; vending machine operations; and the list goes on and on.

“We write broader than just the items on our focus list, but the list helps the agents know what our preferences are,” says Coyne. “We also offer a suite of interface solution for agents so that we can operate in a slick and efficient matter. We think we have a compelling product and we want to make it simple for the agent to access it.”

Back to market conditions, Coyne says that we are living in “challenging” times. “The problems in the financial markets have dimin­ished the number of new start-up operations,” he says. “They talk about the improving economy, but small businesses are still closing down; that means the recession is still here. We are determined to help our agents survive in the current economy.”