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Covering Main Street
New BOP classes add to carrier's small commercial depth
By Dennis H. Pillsbury
The Main Street America Group, Jacksonville, Florida, puts its focus right in its name. It is looking to provide coverage for those small commercial businesses that reside along Main Street, USA. But there was a problem. It had programs for only about half of those businesses. So recently, the carrier took steps to expand its BOP program to include more of those Main Street businesses by introducing its new Main Line BOP.
The company added programs for condo associations, garages, restaurants and light manufacturing, as well as improving its contractors program. When these programs are added to its other existing ones for wholesale, retail, services, offices and apartments, the company now provides coverage to nearly 500 classes.
“Our whole strategy is to provide products to the Main Street market,” says Henry Pippins, vice president-commercial lines. “Small business is the fastest growing part of the economy,” he continues, noting, “That is an area that continues to grow even today.
“Our cup of tea is commercial business having less than $50,000 (annually) in premium. We align our products with the needs of that market,” Henry maintains. “This is a very loyal market that provides us with an opportunity to write profitable business.
“I’ve worked with some national carriers and am familiar with the middle market and large commercial business,” he continues. “That business is more volatile and is quite willing to change insurance companies. That isn’t as true with small businesses. They appreciate the risk management help and the good coverages that we provide. Our combined ratio was a profitable 89 in our commercial segment (in 2008).”
Much of the Main Line BOP business can be underwritten online. “The majority can be automatically issued,” Henry says, pointing out that “eligibility can be determined in a few minutes and, in most cases, a quick quote can be obtained. If there is a problem, the agent will be informed that it is being referred to an underwriter.
“We represent approximately 1,500 independent agents, primarily in 16 Eastern Seaboard states, and are looking to appoint about 100 additional agents per year in underserved markets. The majority of our agencies are small, non-metropolitan independents.”
Strong supporter of independent agents
Doug Eden, senior vice president-field operations, adds: “One of the things that makes us unique is that we view our independent agents as our customers. Our goal is to grow profitably by providing the best possible service and support to our customers every day. They have told us vis-à-vis our feedback mechanisms that we do provide responsive service, and that is reflected in the fact that we have a strong position in our customers’ offices, often ranking among the top two or three carriers in the agency.
“We also meet regularly with our customers,” Doug says. “During 2009, our senior executives held town hall meetings with our agencies in approximately half of our states [the company currently writes business in 24 states] to listen to their feedback and to find out what additional areas we can focus on to enhance our service to them.
“Additionally, we offer one of the smallest ratios of field marketing representatives to customers in the industry,” he continues. “Many of our field marketing representatives have only 15 to 25 agencies that they serve. This affords them the opportunity to spend an entire day in a customer’s office if necessary, to assist our customers’ efforts to grow with Main Street America.
“While we do look for new customer relationships,” Doug observes, “our primary goal is to provide best-in-class service to our existing customers first.” When asked what the company would look for from new customers, Doug says, “We look for those agencies that can generate a minimum of $100,000 in first-year premium in personal lines and commercial lines and grow that to $500,000 within three years.
“We also look for customers that want a long-term relationship. We have many appointed agents from the 1920s and 1930s. They, their children and grandchildren are part of the Main Street America heritage.
“Importantly, our compensation agreements with our customers are among the most robust in the industry, particularly the variable compensation that we offer to those customers who grow profitably with us,” Doug explains.
The company also is a founding member of IIABA’s Trusted Choice program.
New coverages
The Main Line BOP offers increased coverage limits and a number of new coverages, including:
• Equipment breakdown
• Appurtenant buildings and structures
• Money and securities
• Computers and media ($50,000 in coverage)
• Off-premises/transportation ($25,000 in coverage)
• Outdoor signs
• Fire legal liability ($500,000 in coverage)
• Medical payments ($10,000 in coverage)
• Primary and non-contributory status for additional insureds
• Liability extensions (for non-contractors) such as automatic additional insured, additional insurance and aggregate limits per premises
• Broader contractors coverages, such as automatic additional insured, aggregate limits per project and artisans legal liability
• New garage program with garagekeepers liability ($25,000 in coverage) and mechanics professional liability
The product automatically provides limited EPLI ($10,000 with $5,000 deductible) and identity theft coverage ($15,000 plus identity theft resolution). Higher limits of EPLI are available for an additional premium. Security breach mitigation, disaster document recovery and identity travel assistance services also can be purchased.
In total, more than 60 options are available, including such coverages as product withdrawal and condominium directors and officers.
Two important endorsements to increase coverage also have been introduced.
The Main Line Extension features a blanket limit of $150,000 covering accounts receivable, electronic data and computers, valuable papers, debris removal, personal property of others, newly acquired or constructed property, spoilage, and water backup and sump overflow.
The Contractors Inland Marine Endorsement provides coverage for unscheduled contractors’ equipment, replacement cost for contractors’ tools, property at installation premises, and property in transit.
Henry Pippins points out that the BOP program today accounts for some $300 million in premium (annually) and is growing. “In fact, it is the only line in our commercial area that is growing in a relatively flat market. While much of this is occurring in the new classes, we still are enjoying success in our original classes as well.
“At the same time, we are rolling out a new platform that integrates with most agency management systems,” he says. “Our Main Street Station system makes it much easier for our customers to write with us. They can now process everything online right at their desktop in a very efficient manner.”
The company continues to expand geographically into the Midwest and West. In 2008, Main Street America formed a semi-exclusive relationship with the Leavitt Group in Arizona, Nevada and Utah, and has just completed an affiliation with Indiana-domiciled Grain Dealers Mutual Insurance Company. This followed the 2008 acquisition of Michigan-domiciled Great Lakes Casualty Insurance Company, its initial entry into the Midwest. “We are looking for less hurricane-prone territories,” Henry concludes.
It’s a fair bet that agents in those new territories will be happy to see the entrance of a company with such strong support for the independent agency system.
For more information:
The Main Street America Group
Web site: www.msagroup.com |
