Insurance Journal

RATING FLORIDA’S DOMESTICS Actuary Sizes Up Small Insurers

MYRTLE BEACH GONE WILD Expect Storms, Now Fires, Too

LLOYD’s CEO ON RISKS It’s Not Just Economy

Inside This Issue May 4, 2009 • Vol. 87, No. 9 • Southeast Region

SOUTHEAST 6

| Florida: All Coral Policies Expire At Hurricane Season Opening Insurer In Receivership Lacks Reinsurance

6

| South Carolina Coastal Insureds Add Wildfire Risk to Hurricanes As Myrtle Beach Development Spreads Inland, Are More Wildfires Likely?

8

| Florida, Alabama Eye Ban on Accident Response Fees But Local Officials Say Fees Help Close Budget Gaps

8

| Miss. Court Upholds Injured Workers’ Suit Against Furniture Manufacturer Employer’s Conduct So Bad It Lost Workers’ Comp Lawsuit Exemption

8

| Improved Credit Markets Could Aid Shaky Florida Hurricane Fund Fund Positioned To Sell More Bonds Than Previously Thought

N12 | SPECIAL REPORT: Salute to Super Regionals 2009 Super Regional P/C Insurers™ Leading Multi-State Carriers Revealed

8

| Medical Groups Fight Georgia Ruling on Vaccine Liability Say Allowing State Suits Threatens No-Fault System for Vaccines

N18 | Risk Managers Report ‘Soft Landing’ for Market Pricing Survey Says Commercial Insurance Market Still Overcapitalized

13

| Q&A with Rating Expert on Florida’s Startups and Reinsurance Demotech Knows What State’s Small Domestic Insurers Are Up To

N12 SPECIAL REPORT: Salute to Super Regionals 2009 Super Regional P/C Insurers™ Leading Multi-State Carriers Revealed

NATIONAL COVERAGE

N18 | Bad Economy Not Impacting Essential Insurance Coverages Industry Study Says Most Keep Auto, Homeowners Insurance N22 | Closer Look: Agency Technology Social Networking, Web 2.0 Changing Way the Industry Does Business N26 | Special Report: AAMGA Issue ‘Red Flags’ to Watch For When Choosing an MGA Partner

DEPARTMENTS 10 | 36 | N24 | 4 | 12 |

Business Moves Closing Quote MyNewMarkets Opening Note People

6 Myrtle Beach Adds Wildfire Risk On Top of Hurricane Worries

IDEA EXCHANGE N1 | Don’t Expect Top Dollar If Your House Is In Chaos Keep Financials, Book of Business in Order N6 | Minding Your Business How to Improve Productivity In a New Economy

N27 | Special Report: AAMGA Issue 50 Reasons Why Retail Agents Choose MGAs

N10 | Survey: Regional Carriers Agents, Rate Your Regional Carriers In a New IJ Sponsored Survey

N30 | Spotlight: 2009 Premium Finance Directory

N36 | Closing Quote Being Prepared: Don’t Lose Sight Of the Greater Risks We Face

2 | INSURANCE JOURNAL-SOUTHEAST REGION May 4, 2009

13 Rating Florida’s Domestics Actuary Petrelli Sizes Up Small Insurers

www.insurancejournal.com

Idea Exchange Opening Note

All Insurance Is Local

T

his recession is costing more than jobs; it’s also costing business leaders their reputation. A new Harris/ Financial Times poll shows that the economic crisis has damaged the reputation of business leaders very badly. Large majorities of the public in the U.S. and the five largest European countries (Great Britain, France, Germany, Italy and Spain) say their opinions of business leaders have become worse, that the recent behavior of “business leaders in general” has been unethical, and that they are overpaid.

Fully 68 percent of American adults say that “as a result of the current economic situation” their opinions of business leaders have become worse. Even more Americans — 76 percent — believe “the recent behavior of business leaders in general” has been unethical.

Fully 79 percent of Americans, and similar majorities in the five European countries, believe that business leaders “are generally paid too much.”

A majority (68 percent) in the U.S. believe that governments should claw back bonuses or pensions of business leaders whose companies have been bailed out with government money.

Massive majorities of the public in all six countries, including 87 percent in the U.S., say that securing the jobs of their employees should be a higher priority for companies than increasing their profits by cutting their employees.

So What?

As the pollsters themselves point out, the reputation of business and business leaders is “not just a beauty contest.” Low popularity can affect not only the public but also how elected leaders and governments handle business issues, how the media report business stories and how other interest groups interact with them.

Perhaps the most obvious effect for business leaders of being very unpopular is that it increases the likelihood of governments adopting what corporations might see as anti-business regulatory and taxation policies.

The leaders of the property/casualty insurance industry are not immune to the effects of low popularity of business leaders in general. Most consumers, lawmakers and media do not distinguish among the various segments (life, health, property, casualty) of the insurance industry. All lines are lumped together and, even worse, too often referred to as part of the financial services industry. Everyone is put in the same room with the Wall Street wonders, Ponzi schemers and bonus babies.

Also, like it or not, AIG is the face of the insurance industry these days. When the public thinks insurance today, it thinks AIG — and that’s not good. The public doesn’t think about Travelers, Farmers, Progressive, the sensibly-sized Super Regionals or the close-tohome domestic carriers as separate from the villains. All insurers are the same.

The common wisdom among political talking heads and their pollsters is that the public does not rate Congress very highly but at the same time most voters think their own representatives and senators are just great.

Rescuing the reputation of the insurance industry won’t be easy. American Agency System insurance companies are particularly fortunate they have independent agents and brokers representing them. The late House Speaker “Tip” O‘Neill coined the oft-cited phrase, “All politics is local.” Americans may not like insurAndrew Simpson ance companies these days but they still love Southeast/Midwest Editor asimpson@insurancejournal.com their local insurance agent.

Publisher Mark Wells Chief Executive Officer Mitch Dunford

EDITORIAL Editor-in-Chief Andrea Ortega-Wells | awells@insurancejournal V.P. Content/ and Interim Midwest/Southeast Editor Andrew Simpson | asimpson@insurancejournal.com East Editor Kenneth J. St. Onge | kstonge@insurancejournal.com South Central Editor Stephanie K. Jones | sjones@insurancejournal.com West Editor Patricia-Anne Tom | ptom@insurancejournal.com MyNewMarkets Associate Editor Chris Boggs | cboggs@insurancejournal.com International Editor Charles E. Boyle | cboyle@insurancejournal.com Columnists Catherine Oak, Bill Schoeffler Contributing Writers Nicole Bissett, Daniel Price, Bruce Smith, Richard Ward

SALES V.P., Sales & Marketing Julie Tinney (800) 897-9965 x148 jtinney@insurancejournal.com West Dena Kaplan (800) 897-9965 x115 dkaplan@insurancejournal.com South Central Eric Jeter (281) 655-0234 ejeter@insurancejournal.com

Midwest Lauren Knapp (800) 897-9965 x161 lknapp@insurancejournal.com Southeast Howard Simkin (800) 897-9965 x162 hsimkin@insurancejournal.com East Dave Molchan (800) 897-9965 x145 dmolchan@insurancejournal.com

MARKETING Marketing Administrator Gayle Wells | gwells@insurancejournal.com Advertising Coordinator Erin Burns | eburns@insurancejournal.com (619) 584-1100 x120 New Markets Sales Manager Kristine Honey | khoney@insurancejournal.com Classified and Ancillary Sales Manager Nicola Coghill | ncoghill@insurancejournal.com (619) 584-1100 x125 New Media Producer Chad Reese | creese@insurancejournal.com

DESIGN/WEB Vice President/Design Guy Boccia | gboccia@insurancejournal.com Vice President/Technology Joshua Carlson | jcarlson@insurancejournal.com Graphic Designer Jamie Bethell | jbethell@insurancejournal.com Web Developer Jeff Cardrant | jcardrant@insurancejournal.com Web Developer Chris Thompson | cthompson@insurancejournal.com

A D M I N I ST R AT I O N Accounting Manager Megan Sinclair | msinclair@insurancejournal.com Admin./ Marketing Asst.

Kristina Delavega | kdelavega@insurancejournal.com Cover designed by: Jamie Bethell

Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semi-monthly by Wells Publishing, Inc., 3570 Camino del Rio North, Suite 200, San Diego, CA 92108-1747. Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $7.95 per copy, $12.95 per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this publication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2009 Wells Publishing, Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission. Insurance Journal is a publication of Wells Publishing, Inc. POSTMASTER: Send change of address form to Insurance Journal, Circulation Department, PO Box 9049, Maple Shade, NJ 08052

4 | INSURANCE JOURNAL-SOUTHEAST REGION May 4, 2009

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Southeast Coverage News & Markets

All Coral Policies Expire Before Hurricane Season Begins

By Andrew Simpson

A

ll policies of Florida property insurer Coral Insurance will be cancelled as of May 31, 2009 and any unearned premiums will be returned to policyholders, under a state plan approved by a Leon County judge overseeing the receivership of the financiallystrapped insurer.

Officials from the office of Chief Financial Officer Alex Sink who are running the company while it is in receivership determined that Coral can’t afford to purchase catastrophe reinsurance to mitigate its potential exposure in the 2009 hurricane season. This, they say, is a situation that “presents unacceptable risks to policyholders, claimants, other creditors and the public.”

The insurer was placed into receivership for the purpose of rehabilitation on April 9.

The CFO acting as receiver obtained the court order directing the cancellation of Coral’s in-force policies prior to the start of the hurricane season. Thus all policies not otherwise cancelled or terminated prior to 12:01 a.m. on May 31, 2009, will be considered cancelled as of that time and date.

Sink’s office is making arrangements to return the unearned portion of policyholders’ premium already in advance of May 31.

Coral will continue to process cancellation requests received prior to May 31 in the normal course of business. However, once the mass cancellation process has begun, canceling policies effective as of 12:01 a.m. on May 31, any additional premium due to those who cancel prior to that date will be processed on a supplemental basis.

The CFO’s office said that it appears that Coral will have sufficient funds to meet its obligations,

including the payment of unearned Security First, while homeowners premium and claims. However, with homes valued at $1 million or they added, liquidation of the com- more can buy coverage with the pany is still a possibility.

MacNeill Group, Inc., a managing To help assure that Coral has general agency, if they want. adequate funds in the event it is Agents wanting an appointment liquidated, Coral will retain the with Security First can obtain one first $100 of the initial return preby contacting the insurer, accordmium/claim payment. If the receiv- ing to officials. er ultimately determines that suffiCoral stopped writing new covcient funds are erage in early available, it will pay March and the $100 retentions It appears that stopped writat a later date.

Coral has funds ing renewal Coral, which coverage after insures about 11,750 to meet its obliMarch 29, 2009. homes, has an gations but liqui- On March 27, agreement with the state susdation of the Security First pended the Insurance Co. and company is still company’s the MacNeill license to write a possibility.

Group, Inc. to profor six months vide replacement after determincoverage. Those with homes valing that the insurer had about $2 ued at under $1 million have the million less than the $4 million in option to get coverage with insurer surplus it should have. IJ

Myrtle Beach Property Owners Add Wildfire to Hurricane Risk

By Bruce Smith

T

hey flock from other states to the coast known as the Grand Strand in Myrtle Beach, S.C., first as tourists, and later as residents, captivated by ocean views, rolling green fairways and the relaxed lifestyle.

Most knew that an occasional hurricane was part of the bargain but didn’t expect a different danger — a raging wildfire like the one that destroyed 70 homes last month.

“I always said if we lose this house it will be a hurricane,’’ said 60-yearold Kathy Horvat, standing outside her home in the Barefoot Resort. “It never occurred to me, never, that there might be a fire like that which just went through.’’

The fire devastated part of the resort, forcing thousands to flee and leaving damage which, in some ways, resembled the aftermath of a hurricane.

Myrtle Beach, studded with high rise hotels, amusements and shopping malls, is the heart of South Carolina’s $16 billion tourism industry.

Once a relatively sleepy coastal resort, the Myrtle Beach area now attracts an estimated 13 million vacationers a year. High-rise hotels and condominiums stud the shore where 20 years ago mom-and-pop motels stood.

As development pushes inland from the coast, houses are going up 6 | INSURANCE JOURNAL-SOUTHEAST REGION May 4, 2009

farther west in wooded areas known as Carolina bays, which range in size from a few acres to thousands of acres. They are densely filled with plant life and often have boggy bottoms where peat, if it catches fire, can burn for days or weeks.

Peat in some bays fueled last month’s fire, officials said, and flames jumped into the subdivision near a six-lane highway known as the Carolina Bays Parkway.

Phyllis Fessman, who relocated here six years ago, doesn’t think development needs to stay clear of such areas altogether. “I don’t believe that matters. There is plenty of open space between these houses,’’ said Fessman, 63.

Ann Toothman, 60, who moved to the area from Belgium last year, said her home was livable, but took some fire damage. She said she started crying when she saw a map showing she could return.

“The whole time I lived here I worried about hurricanes. It never occurred to me to worry about a wildfire,’’ she said. IJ Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. www.insurancejournal.com

Beyond Security®

“Safe Landing”

Mike Davis Executive Vice President U.S. Risk Underwriters Skydiver General Star Broker

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“I manage my clients’ risk the same way—nothing but the best. With an A++ rating and Berkshire Hathaway backing, there’s no stronger E&S market than General Star.

“Whether I’m free falling at 10,000 feet or working on a challenging account, I’m always confident of a safe landing with General Star behind me and my clients.”

To find the General Star broker nearest you, visit our website at www.generalstar.com. © 2007 General Star Management Company, Stamford, Connecticut. Certain coverages may be written on a nonadmitted basis. Specialty underwriting through designated surplus lines brokers.

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Southeast Coverage Snapshot Florida, Alabama Eye Ban on Accident Improved Credit Markets Could Response Fees Collected by Municipalities Aid Shaky Florida Hurricane Fund

I

t was bad enough when Matthew Norville rear-ended another driver, crushing the front end of his own car. A few weeks later, the Pensacola college student got a $714 bill to cover the cost of the county police and firefighters who responded.

Florida lawmakers are considering a ban on such fees, dubbed “crash taxes’’ by detractors who say they’re unfair and not always covered by insurance.

Six other states — Arkansas, Missouri, Pennsylvania, Indiana, Tennessee and Georgia — already prohibit them, and Alabama and California may do the same.

“When you have an accident you’re taught to call 911,’’ said Norville’s mom, Amy. “It never occurred to us that there would be a charge for them.’’

A Florida Senate committee

unanimously approved the proposed ban recently. A companion bill awaits a vote by the full House, which may not happen until the next session Republican Sen. Mike Bennett of Bradenton, the bill’s Senate sponsor, said residents already pay property taxes to cover emergency services and shouldn’t face additional fees if they’re in accidents.

“We’ve got to stop the madness right now,’’ he said.

But cash-strapped municipalities in 16 states, including Escambia County, where the Norvilles live, say the fees are necessary because of declining property taxes and tight budgets. In Escambia County, officials decide who is at fault.

Then, a schedule of fees is applied; 15 minutes of a firefighter’s time costs $10, while sending a fire engine costs about $600 an hour. IJ

Miss. Court Upholds Injured Workers’ Suit Against Furniture Manufacturer

T

he Mississippi Supreme Court has upheld a $3.76 million verdict against a Mississippi furniture maker sued by employees who alleged they were injured from a hazardous glue they had to use.

The state Supreme Court sided with four workers who claimed that the company, Franklin Corp. in Houston, Miss., ignored warnings and complaints from workers about the glue and did not provide proper ventilation in the factory. The company was sued by employees Pauline Tedford, Lora Smith, Judy Haire and Samantha Mixon who worked at Franklin between 1999 and 2004. Their suit included claims for battery and intentional infliction of?emotional distress.

Franklin had argued that the lawsuit should not have been allowed but should instead have gone before the Mississippi Workers’ Compensation Commission for a remedy. But lawyers for the employees successfully argued that the case involved such egregious conduct that it fell under the intentional torts exclusion in the state’s workers’ compensation law.

A circuit court agreed with the employees and allowed the suit to continue. In 2007, a Calhoun County jury awarded damages totaling $9.5 million to the workers. A judge later reduced the amount to $3.76 million. Franklin then appealed. IJ

8 | INSURANCE JOURNAL-SOUTHEAST REGION May 4, 2009

The Florida Cabinet received a bit of encouraging news recently about the state’s tenuous hurricane catastrophe fund when the head of Florida’s investments told them a loosening credit market provides the ability to bond an additional $5 billion, if needed.

“That’s good news, very good news,’’ said Chief Financial Officer Alex Sink, noing that several months ago the state thought it might be able to get only $3 billion worth of bonds.

Ash Williams, director of the State Board of Administration, said Florida could financially withstand a severe storm costing about $22 billion today. The Florida Hurricane Catastrophe Fund now has an exposure of more than $28 billion with less than $8 billion on hand to pay claims.

The Florida Insurance Council urged state officials to continue looking for other options to ensure the “cat’’ fund can meet its financial obligations. IJ

Pediatricians, Other Medical Groups Fight Georgia Ruling on Vaccine Liability

P

ediatricians and other medical professionals are trying to block a Georgia Supreme Court ruling they fear could encourage lawsuits and harm production of vaccines.

The American Academy of Pediatrics (AAP), which represents 60,000 pediatricians, along with several other health organizations, recently filed an amici curiae (friends of the court) brief with the U.S. Supreme Court asking that it overturn a recent decision by the Georgia Supreme Court that would allow cases alleging injury from childhood vaccines to be decided by state juries.

The doctors claim the October ruling by the Georgia court threatens the no-fault system approved by Congress when it enacted the National Childhood Vaccine Injury Compensation Act of 1986.

The federal act was intended to protect the small number of children injured by vaccines and to safeguard the nation’s vaccine supply, according to

AAP. Leading up to passage of the legislation, vaccine-related lawsuits against vaccine manufacturers had spiked, and the backers of the federal act feared that rising litigation threatened to halt of vaccines.

The recent Georgia Supreme Court ruling in American Home Products Corp. v. Ferrari would reverse the intentions set forth in the 1986 act, argued AAP. “If this decision is allowed to stand, it could lead to the very same crisis that Congress sought to prevent in passing the original legislation. There is a genuine threat to our nation’s public health if manufacturers abandon or consider abandoning the production of vaccines. This decision would set our country back decades, and have deadly consequences for our children,” said Stephan E. Lawton, co-author of the amicus brief. IJ www.insurancejournal.com

It Figures

Declarations Twittering Mississippi

$60 Million

“With a diverse group of staff members with different skills and knowledge of various technologies, Twitter was mentioned as one of the most efficient ways to connect with people, and it’s free.’’

— Mississippi Department of Transportation spokeswoman Carrie Adams explaining why MDOT will use Twitter to relay information to evacuees during the upcoming Atlantic hurricane season, which starts June 1.

The tweets — Twitter posts — can be sent or received on either a computer or cell phone. The MDOT tweets will provide updates on evacuation routes.

The estimated insured loses caused by violent weather that struck Georgia on April 10, according to Insurance and Safety Fire Commissioner John W. Oxendine.

The storms caused damage in the metro Atlanta area, Burke, Chattooga, Crisp, Floyd, Franklin, Hancock, Richmond, Stephens, and Sumter Counties.

Surplus Clarity

2.9 The magnitude of the small earthquake reported in a central Alabama county for the second time in less than 24 hours. The U.S. Geological Survey reported that thee quake was centered about 10 miles southeast of Centreville. No injuries or damage were reported.

60% The percentage of average annual loss attributable to hail storms.

Why so high? Primarily because hail storms cover a large area and occur more frequently and in coordination with tornadoes than straight wind storms, according to Risk Management Solutions.

$2.5 Million The fine levied against a Massey Energy subsidiary after a federal judge accepted the company’s guilty plea to 10 criminal charges for a 2006 fire that killed two West Virginia coal miners. U.S. District Judge John Copenhaver approved Aracoma Coal Co.’s plea deal despite a provision sparing Massey officials and the Richmond, Va., coal company from prosecution. The agreement also required Aracoma to pay a $1.7 million fine for civil violations found by the federal Mine Safety and Health Administration.

1,700 The number of tornadoes in the U.S. in 2008. They accounted for 25 percent of about $10.5 billion in insured losses, according to Risk Management Solutions. www.insurancejournal.com

“Trial lawyers wanted many things and we agreed to most of them especially when they protect the consumer. We have seen no other interest opposing these bills.”

— Steve Finver, president, Florida Surplus Lines Association, who has been working with surplus lines, Lloyd’s and other property/casualty lobbyists in Tallahassee to guide legislation they hope will clarify the surplus lines industry’s regulatory status in the state. The bills also add some consumer protections and disclosure requirements urged by trial lawyers. Finver was hopeful that the legislation would pass both the House and Senate before the session ended on May 1. If not, he fears, surplus lines carriers might restrict their writings in the state.

Cynically Viewed “Contributing to the current economic volatility have been ideologically driven initiatives not premised on fact or consumer protection. Financial institutions pushed for deregulation to promote ‘innovation’ while fundamental consumer protections, like solvency, were dismissed as obstacles to profit. With this in mind, the myth-laden pleas of an otherwise prudent Tom Wilson, CEO of Allstate, in search of federal regulatory relief should be viewed cynically.”

— Michael T. McRaith, Illinois Director of Insurance, responding to an opinion in the New York Times by Wilson advocating federal regulation.

Scary Firefighters “When we get dressed up, we kind of look like Darth Vader. A lot of younger kids in a fire situation, they get scared, and they’ve been known to hide from fire.’’

— Lt. Jack White of Fire Station No. 6 in Tuscaloosa explaining why many children are scared not only of fires, but of firefighters. He honored the bravery of fourth grader Asia Hill who put into practice what she learned a year ago in school after a grease fire started in her home. The 11 year-old escaped safely with her grandmother, her two older sisters and a baby sister she personally carried out of the house.

May 4, 2009 INSURANCE JOURNAL-SOUTHEAST REGION | 9

Southeast Coverage Business Moves

Farmers, AIG Los Angeles-based the Farmers Insurance Group of Companies is buying American International Group’s (AIG) Personal Auto Group, which includes 21st Century Insurance Co. The acquisition price is $1.9 billion.

Under the agreement, 21st Century Insurance Group, the wholly owned subsidiaries comprising AIG’s U.S. personal auto insurance business, will be sold to Farmers Group Inc., a subsidiary of Zurich Financial Services Group.

Farmers Group Inc. will sell the underlying insurance entities to the Farmers Exchanges, which Farmers Group Inc. manages, but does not own.

The transaction excludes AIG’s Private Client Group, which sells insurance to high net worth individuals.

FGI will pay AIG $1.5 billion in cash and $400 million in face amount of subordinated, euro-denominated capital notes backed by Zurich Insurance Co. FGI will also assume 21st Century’s outstanding debt of $100 million.

The acquisition is expected to close no later than the third quarter of 2009.

This acquisition by the Farmers Exchanges will position Farmers as the third-largest overall, personal lines insurer in the U.S. and as the largest auto insurer in several states, including California.

21st Century, which includes the former AIG Direct business and Agency Auto business, operates in 49 states and Washington, D.C. 21st Century has more than 2.4 million customers and insures more than 4 million vehicles across the country. 21st Century is the third largest traditional direct writer of insurance in the United States.

Bliss & Glennon, Fortegra Jacksonville, Fla.-based Fortegra Financial Corp., an insurance services company specializing in affinity marketing, payment protection, mass marketing and administration, completed the acquisition of insurance broker Bliss & Glennon Inc., from Willis HRH Inc. The financial terms of the transaction were not released.

Joe Plumeri, chairman and CEO, Willis Group Holdings, said Willis sold the unit because it did not fit with his firm’s focus on 10 | INSURANCE JOURNAL-SOUTHEAST REGION May 4, 2009

retail brokerage. Bliss & Glennon is a surplus lines general insurance agency with binding authority.

Fortegra Financial, formerly Life of the South, was founded in 1982 as a credit insurer and has since expanded into other insurance services and products. Fortegra serves clients in the banking, credit union, consumer finance, automotive, retail, credit card, and vacation ownership industries. This transaction positions Fortegra to expand into wholesale brokerage.

Fortegra President and CEO Richard S. Kahlbaugh said the firm has been looking for opportunities and it plans to enter new geographic markets and product segments. Fortegra Financial completed a recapitalization with Summit Partners in June 2007.

Chubb, Southern Florida Chubb Personal Insurance has notified its Florida agents it is no longer including wind coverage in Masterpiece homeowners insurance policies for new customers in 14 Southeast and Southwest coastal counties in the state. The insurer, however, is making wind coverage available on new business in these counties on a non-admitted basis through its Chubb Custom Insurance Co. (CCIC).

According to a recent letter sent to agents, the new approach went into effect April 15 in Broward, Hillsborough, Miami-Dade, Sarasota, Charlotte, Indian River, Monroe, St. Lucie, Collier, Manatee, Palm Beach, Lee, Martin and Pinellas counties. Chubb will continue to offer new customers in these counties “ex-wind Masterpiece homeowners coverage,” according to the letter.

For new business in these counties that was approved and bound before April 15, Chubb said it would honor the quotes when issued within 30 days of the date first bound.

The change only affects new business in the 14 southern coastal counties; Chubb is continuing to write wind coverage on new business in all other counties in the state.

Agents can access the non-admitted CCIC wind coverage through The St. James Insurance Group in Orlando, which is a Chubb approved program manager.

A Chubb spokesman declined comment. IJ www.insurancejournal.com

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Southeast Coverage People

Joseph Tracy

Robert Yarbrough

Dave Peterson

Debbie Martinez

Joseph Tracy has been named president of Travelers Inland Marine business unit. Tracy, who joined Travelers in 2006, most recently served as chief underwriting officer for the Inland Marine business unit.

Prior to joining Travelers, Tracy was the head of OneBeacon Insurance’s Inland Marine operations. He also has held positions with the Chubb Group of Insurance Cos. and Kemper Insurance Cos. Tracy succeeds Richard Rowley, who founded Travelers Inland Marine in 1982. Rowley will continue as a senior adviser with the organization.

Insurance broker Rutherfoord has appointed Robert A. Yarbrough to its Atlanta office. Yarbrough will serve as vice president, surety manager, and will oversee the surety business for the Atlanta office.

Yarbrough is a former vice president for BB&T Insurance and has 17 years of surety and business development experience.

Virginia-based Rutherfoord has also added David T. Peterson to its Raleigh, North Carolina office. Peterson will serve as division manager, providing direct oversight and responsibility for the growth and success of the Raleigh office.

Peterson is a former executive vice president with the Hylant Group, and has 20 years of experience in the commercial insurance brokerage industry.

Rutherfoord ranks 11th in the Insurance Journal Top 100 listing of the nation’s largest privately held brokers.

Michigan-based managing general agency J.M. Wilson has added Debbie Martinez as Sales and Underwriting manager for its southern regional office in Charleston, South Carolina.

Martinez will be responsible for developing relationships and growing J.M. Wilson’s presence in the South. With access to Colony and Northland Insurance Co. for commercial trucking, business auto and public auto accounts, she will help agents write business in Tennessee, Mississippi, Alabama, Georgia, South Carolina, North Carolina and Florida.

Martinez joins J.M. Wilson with nearly 20 years in the insurance industry. She has worked as a commercial transportation underwriter for another MGA. Insurance broker Lockton has created a single Southeast group which combines the insurance brokerage and consulting operations of its suburban Miami and Atlanta offices.

Doug Hutcherson will lead the executive team at Lockton Southeast as president. Stan Shaffer has been named chief operating officer.

Other senior executives at Lockton Southeast are executive vice presidents Neil Metzheiser, Philip Holley, Wayne Soud and Sean Lyons.

Bermuda-based specialty insurer Ironshore Inc. has appointed Anthony Mammolite as executive vice president

12 | INSURANCE JOURNAL-SOUTHEAST REGION May 4, 2009

of its U.S. Property unit. Mammolite, who will be based in New York, will oversee strategy for the unit, which focuses on broker-sourced specialty commercial business.

He has more than 35 years of experience in underwriting and field marketing, including over 20 years in property lines.

Mammolite most recently served as senior vice president of Property for Lexington Insurance Co. Prior to that, he held various senior level management positions for AIG in the greater New York region.

Eight employees from Jacksonville, Fla.-based The Main Street America Group received the company’s highest honor when they were recently inducted into its Circle of Excellence. The winners were selected for their individual efforts in going “above and beyond” while helping the super regional property/casualty insurance carrier succeed in 2008.

Last year, the company achieved a 94.9 combined ratio, one of its best ever, leading to a $43.6 million underwriting profit, the largest in Main Street America’s 85-year history.

The 2008 Circle of Excellence honorees are: Theresa Beauregard, senior business systems analyst, information technology, Keene, N.H.; Julia Devine, commercial lines product supervisor, Jacksonville, Fla.; Brian Fancher, senior commercial lines team underwriter, Syracuse, N.Y.; Lingmin Jiang, actuarial analyst, Jacksonville, Fla.; Doug Lehr, bonds quality assurance manager, Keene, N.H.; Paul Maestri, claims field unit manager, Syracuse, N.Y.; Nancy Murdough, state filings specialist, law, Jacksonville, Fla.; Melanie Young, technical lead, policy processing, integrated customer solutions, Keene, N.H. MacNeill Group Inc. promoted Kevin M. Tromer to president. Tromer succeeds Douglas W. Bullington who continues in his current position of CEO of Focus Holdings LLC, MacNeill Group’s parent company. Tromer is just the fifth person to serve as president in the 63-year history of MacNeill and assumes this role in addition to his position as chief operating officer of Focus Holdings.

Tromer joined MacNeill in 1996 and most recently served as the executive vice president responsible for the management of daily operations. Prior to that he served as senior vice president from 2003 to 2006 and as vice president from 2000 to 2003 responsible for new programs and information technology initiatives. He entered the insurance industry several years before joining MacNeill following successful stints in several areas of the automobile finance industry.

MacNeill Group Inc. is a managing general agency and program manager in the Southeast with its headquarters in Sunrise, Fla. The firm has been recognized as one of the Best Companies to Work For by the South Florida Business Journal; was the first recipient of the MGA of the Year award presented by the National Association of Professional Insurance Agents of America; and has earned the designation of Certified Managing General Agent from the American Association of Managing General Agents. IJ www.insurancejournal.com

Southeast Coverage News & Markets

Q&A: Rating Expert on Florida’s Domestic Insurers and Reinsurance

J

oseph Petrelli is president of Demotech, an actuarial servicing firm based in Columbus, Ohio. He and his team have been tracking the Florida property insurance market and its domestic startup carriers, in particular, for years.

Demotech rates many of the smaller companies that other ratings agencies won’t. In a recent podcast with Insurance Journal’s Andrew Simpson, Petrelli discusses the Florida Hurricane Catastrophe Fund, reinsurance, smaller domestic carriers, Coral Insurance and more. The following excerpts are from the complete interview, which is at www.insurancejournal.tv. Demotech is an official research partner of Insurance Journal.

IJ: How dependent on the state Cat Fund are these smaller insurers for reinsurance?

Petrelli: In Florida, there’re a couple unusual things going on. Number one, the reinsurer there, there’s a mandatory layer of reinsurance that the cat fund is the reinsurer that has a mandatory layer. So companies must participate.

IJ: There’s a mandatory layer and then additional layers?

Petrelli: Yes. I guess the most famous layer is what they call TICL, Temporary Increased Coverage Layer, which is a fairly high excess layer. I think it’s there that the exposure of the cat fund is most critical. As we sit now, I think the cat fund has, just using round numbers, approximately $30 billion of exposure. Its cash on hand, commitments for bonds, bonds that have been sold, it has anywhere from 10 to $15 billion of cash or near-cash. So, there’s a funding shortfall of $15 to $20 billion. [B]ecause it is a post-event funder, it is, by statute, allowed to do that. It’s allowed to write business that it hasn’t already funded, unlike a traditional insurance company. I think that’s the biggest cause of the concern. The folks in the insurance business in the other 49 states, we don’t see things like that.

IJ: Do you advise startups to have a contingency plan to pay claims without the fund?

Petrelli: I want to discuss that... but I want to make it clear that we believe - and it’s an implicit assumption - that the money will eventually be there.

Whether it’s sold in the private bond markets or whether the federal government buys bonds or whether the state itself buys emotech believes that financial stability can be indeits own bonds from indirect oblipendent of size and that small, well-managed propergation of its quasi-government ty/casualty insurers can often be more financially stable entity, we think the money will than larger, highly leveraged insurers. Its Financial be there. So, what we talk to Stability Ratings are a leading indicator of the financial sta- companies about is, “What are bility of an insurance company and the likelihood of an you going to do to continue to insurer’s survival. pay claims if the cat fund has a Financial Stability Ratings of A’’ Double Prime; short-term liquidity problem?”

(Unsurpassed); A’ Prime (Unsurpassed); and A …[W]hat we say to our compa(Exceptional) are accepted by the major participants in the nies is, “OK, if you only get half secondary mortgage marketplace. Demotech also issues rat- your money, and it’s going to ings of S (Substantial), M (Moderate) and L (Licensed), take them six months, eight with the L being its lowest rating for carriers whose finan- months, whatever it might take cial ability is limited. to get you all of your money, how The Demotech model is quantitative. It is based on are you going to continue to reported financial information and analytical information. honor claims during that period Qualitative considerations such as “quality of management” of time?” We’ve gotten some fasciare not factored into its rating process. nating responses.... Many of the A list of companies with a Financial Stability Rating can smaller companies in Florida be found at www.demotech.com. IJ have not gotten due credit for being extremely responsive to

Demotech Explains Its Financial Stability Ratings

D

www.insurancejournal.com

this contingency and being extremely careful of making sure they’re going to be able to honor meritorious claims. We have 59 carriers in Florida that we actively follow and they have all responded to us, and they are all in at least quarterly, and over the last several months, monthly communication.

Joseph Petrelli

‘The companies should be thumping their chests a little bit more … because there are some fascinating programs in place for contingency plans.’

IJ: Do they have contingency plans?

Petrelli: They do.

They do. Consumers need to know about it. The other thing is that what we’ve also found is, in this process, that the companies themselves have been, I think, very modest. They should be thumping their chests a little bit more about what they’ve done and how they’ve done it, because there are some fascinating programs in place for contingency plans.

IJ: If you find carriers without contingency plans, could that alter their rating ?

Petrelli: Oh, most assuredly…. We’re still getting information but, of the 59 that we work with, I think that there will be maybe six to 10 companies, that we will have to downgrade.

IJ: How do these startups rate as a group?

There have been a few problems. Are those isolated or a sign of more trouble ahead?

Petrelli: I would say that they are isolated problems. The reason I say that is when we look at the companies that we have reviewed and rated from 1996 to date, many of those companies now are 10 and 12 and 13 years old. Even though we don’t rate them anymore, they have gone on to get very good ratings from other services. We know we have been able to identify some very strong companies. IJ

May 4, 2009 INSURANCE JOURNAL-SOUTHEAST REGION | 13

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Idea Exchange Agency Management

Don’t Expect Top Dollar if Your House is in Chaos Get the Highest Bid When Selling Your Agency by Keeping Financials, Books in Order Price

By Daniel B. Price agreements that serve to protect business assets.

W

hether one is looking to sell, buy or grow organically, the preparation and organization of an agency’s financial, book of business and corporate information as if a sale is imminent should start today.

In reality, a sale may not be in the cards right now. However, running the agency today as if it were going on the sales block will inevitably improve management practices and overall efficiency and effectiveness; thus translating into higher earnings and undoubtedly increasing long-term shareholder value. In short, the one surefire way to increase shareholder value is to get your house in order. This is something that can be started today that does not require selling a thing.

Get your books and records in order. In an actual transaction, the amount and detail of information a particular acquirer will request varies. But one thing is for sure — the quality of information a seller is able to provide goes directly to the overall quality of the agency itself and its management team. When it comes to the sale of www.insurancejournal.com

Financial Statements Historical financial statements are often one of the best indicators of future performance of a business. To these ends, buyers will put your financial information under a microscope. Audited financial statements provide the highest level of assurance that the financial picture of an agency is in fact as it has been presented to be. The greater reliability a buyer can place on the financial statements, the more likely it is that a seller will receive additional purchase consideration either through a higher overall price and/or through a more favorable transaction structure (i.e., more upfront or an earn out with lower performance metric thresholds). This is simply the an insurance agency, all things being equal, old risk/reward trade off: By having quality the higher the perceived quality of inforfinancial statements, you are helping to mation the higher the ultimate purchase reduce the buyer’s perceived level of risk price and/or greater likelihood of improved and thus he or she is more likely to provide transaction terms. Buyers want to see that you with more return. a business is being run like a business.This It is a fact that historical financial statemeans mimicking professional standards ments of closely held businesses rarely often found within publically traded organreflect the true profitability izations and best practices industry leaders.

The one sure-fire of the business without certain adjustments. Whether Such beneficial stanway to increase the adjustments would be dards and practices to eliminate owner perks include: shareholder such as country club dues • The routine developvalue is to get or personal automobiles, or ment of accurate and to remove one-time expenstimely financial stateyour house in es related to moving or ments complete with all order. sponsorship of a local charisupporting schedules ty event, it is of no matter. and documentation; The key to getting a buyer to sign-off on • Full implementation of a first class any suggested financial statement adjustclient management system that includes ment is the amount of tangible support drill down and custom query capabilities; and justification a seller can provide.

• Thoughtfully developed business and Simply saying that 25 percent of this strategic plans, complete with budgets and expense line item and 50 percent of that management projections; and • In force and updated requisite legal continued on page N2 May 4, 2009 INSURANCE JOURNAL-NATIONAL REGION | N1

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Idea Exchange Agency Management

Chaos, continued from page N1

expense line item are “personal” and therefore these line items should be adjusted will not suffice. If a buyer is expected to give “full credit” in the purchase price for discretionary items, extensive and detailed records are required.

Buyers will only recognize and pay for earnings that are easily discernable and clearly documented. On a related note, buyers become more skeptical with each “normalizing” adjustment required to arrive at the true economic run rate of a business.

Bottom line: even if all of the supporting documentation is available, it does not always make sense to make adjustments for every little immaterial non-business item.

Revenue adjustments are related but can also sometimes come under the guise of a slightly different animal.

You may have the usual non-recurring agency and it is not required for ongoing revenue adjustments, such as a one-time operations, then mechanisms for removing gain from the sale of equipment, and these it from the balance sheet should be considadjustments are understandable. However, what is clearly unacceptable to most buyers ered.

An example of this type of adjustment is is revenue that has not been recorded on automobiles owned by the agency (includthe financial statements and tax returns.

An unrecorded revenue adjustment is clear- ing the accompanying debt), that are in reality personal automobiles of the agency ly straddling the line between tax avoidowners. By cleaning up the balance sheet a ance, which is perfectly acceptable, and tax more accurate picture of the true financial evasion, which is obviously not acceptable. position of the agency is often revealed.

This type of situation should be cleaned up Most likely a buyer is going long before contemplatto uncover the true finaning a sale, or do not Buyers will only cial picture of the agency expect a buyer to give recognize and pay at some point during his or you credit for this revher review, so you might as enue. for earnings that well approach it honestly Effectively, Uncle Sam are easily discern- right from the start. has already compensated you for this revenue able and clearly First Class Client through reduced taxes. If documented.

Management System a buyer gets wind of this I cannot tell you the type of situation the deal number of times I have asked for something will likely be stopped in its tracks as this as basic as a production report by line of type of a situation goes right to the integrity of management and the underlying quali- business and been looked at as if I were from another planet. If you cannot provide ty of the agency. reports that at least break down the book The removal of non-operating assets and of business by general and specific line of liabilities from the balance sheet is another business, producer and underwriting marimportant aspect of cleaning up financial ket, then you have substantial work to do. statements. Their presence will just comAt the same time, just because you can plicate and confuse matters if and when provide these basic reports does not mean you decide to sell. If an asset is not conthat they are accurate. Too often, records tributing to the earning power of the N2 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009

in an agency’s client management system do not reconcile to what is presented by the financial statements or payroll reports.

All accounting and agency management systems should be communicating and reflecting the same information. There is nothing more frustrating to perspective buyers than to be provided with numerous reports generated from varying systems and to have the reports not reconcile with each other.

Business and Strategic Plans – Budgets and Projections You may have considered developing a business or strategic plan in the past but decided to hold off as it was determined that such planning and strategizing was unnecessary given the size of the agency and its relative level of complexity. To this I say no way — if for no other reason than the existence of a well-thought out business plan and a thorough strategic plan reflect well on an agency’s management.

What are the short and long-term goals for the agency? What are the tactics that are being employed to reach these goals?

Acquirers want to know that there is a plan and that the agency is being proactively managed for future growth. Buyers almost always request budgets and management projections. Unfortunately, these continued on page N4 www.insurancejournal.com

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Idea Exchange Agency Management

Chaos, continued from page N2

requests tend to fall on deaf ears as most agencies do not prepare such information on a regular basis. When a buyer requests reasonable information and the seller comes back with “we don’t prepare that,” the buyer gets an immediate window into the sophistication level of the seller’s management team and business acumen.

Remember, more than likely the seller will be joining the acquirer for a period of time post transaction, so the entire selling process should be looked at as a prolonged job interview.

Establish and Update Requisite Legal Agreements Time and time again, sellers present themselves to the market without having property leases, employment agreements, first updated their legal agreements and underwriting market contracts, confidenlicensing files. Frankly, it is a prerequisite to sale that can easily go overlooked. When tiality agreements, compensation disclosures, etc. It is also very important to codiis the last time you updated your articles of incorporation or operating agreement, or fy and formalize any relationships your agency has with external parties such as reviewed your “standard” restrictive cross referral agreements or third-party covenant agreements (e.g., non-solicits, non-competes, confidentiality) in regard to producer arrangements.

If you take too long to gather requested current case law? Perhaps a previous shareinformation, or it is not available, the stage holder was bought out a few years ago and has been set for your corporate documents agency to be viewed as and the stock ledger If you take too long not well-organized and were never updated. not on top of its busiWhatever it may be, to gather requested ness. Remember, a there is often a need information, or it is buyer has to factor in to update legal docuthe future costs of ments in the middle not available, the organizing your busiof a transaction, stage has been set ness if you have not which does two things. for your agency to be already done so. An investment in time and One, it slows down viewed as not welldiligence today making the process as an additional element is organized and not on sure your agency is well-organized and added to the overflowtop of its business. capable of providing ing pile of things to standard information is do. And two, it raises an investment in the future value of the a red flag to buyers with respect to the business. Planning and preparation sellers’ overall organization and business throughout all stages of ownership are acumen. essential if one is to realize an agency’s full All legal documentation should be value at the time of disposition. IJ reviewed to make sure they are available and in good order prior to speaking with any potential buyers. This includes articles Price is a vice president with Hales & Co., located in Hales’ of incorporation or operating agreements, Harrisburg, Pa., office. Email: dprice@halesgroup.com. Phone: corporate and individual producer licenses, 717-541-9300, ext. 102. Web site: www.halesgroup.com.

N4 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009

www.insurancejournal.com

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Idea Exchange Minding Your Business

How to Improve Productivity in a New Economy Agencies Must Stop Money Wasting Financial Leaks

By Bill Schoeffler and Catherine Oak

T

he economy is in the tank and so is the stock market. Thousands are unemployed and many people do not know where to turn. No one is setting up charities for insurance agents just yet, but the industry is at the end of the economic wave. Even within the ranks of the agents there is a sliding scale of growth, profitability and future potential. Those that focus in certain niches, like construction are reeling and it seems that the smaller the agency, the tighter the financial squeeze.

The long-term soft market has wreaked havoc for the typical agency owner. Commission dollars earned to sell and service accounts have dropped. The problem is the client and the companies expect more and more out of the agents for less and less.

Typical agency profitability levels have dropped from 25 percent of revenue or more 20 years ago, to today’s typical profit margin range of just 15 percent to 25 percent.

The growth in expenses has outpaced the growth in revenue.

Personnel, the biggest single agency expense, typically costs 52 percent to 73 percent of revenue. In general, owner and producer compensation costs between 25 percent and 35 percent of revenue, while office staff compensation ranges from 20 percent to 28 percent of revenue, and benefits and taxes cost 7 percent to 10 percent of revenue.

Automation did not turn out to be the productivity panacea that was expected.

How many agencies have cut staffing after they bought a new computer system?

Sometimes staff was increased to add on an automation person or data entry person. Besides, automation expenses did not exist 30 years ago.

Other expenses are going up as well. Office rent has shot through the roof in many areas. Advertising, office supplies, travel and automobile expenses all have gone up.

N6 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009

Oak

Schoeffler

How to Help So can anything be done to help the typical agency owner stop the erosion of profits? The answer is yes.

Plugging the financial leaks in an agency can add up to sizable savings. Performing an efficiency study is the first step to understanding where these leaks exist.

The place to start is with the people doing the work.

Employees know what works and what does not Plugging the work. Management’s role is to determine which is financial leaks the most cost effective in an agency solution, if any. To start, management should ask can add up to employees the following sizable savings. question: What three things can be done to make your job more efficient?

Bring the staff together to discuss the suggestions.

Brainstorm on the issues. Map out workflow on a wall chart. See if there are any roadblocks to getting the job done.

Is the staff double entering data? Is the agency paperless?

Is the layout of the office efficient? Does the staff have to go long distances or are they impeded when retrieving commonly used files, copy or fax machines, etc. Is the office too small?

Does the agency have enough properly functioning and up-to-date office equipment? Sometimes one extra fax machine or printer can make a big difference in productivity. Is the telephone system efficient?

Delegate some of the problem solving to the staff and have follow-up meetings. The best suggestion should win a reward, perhaps $100 or more depending upon the savings. This process should be repeated annually.

Other Areas to Review Next, the owners and management should explore other areas that might be causing financial leaks.

Compare the agency’s productivity to peer groups using one of the published benchmark studies. Is the agency overstaffed or understaffed? If overstaffing exists, why and what can be done? Get rid of under-performing employees and reward the high performers. continued on page N8 www.insurancejournal.com

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Idea Exchange Minding Your Business New Economy, continued from page N6

Has management provided the employees with a clear direction for the agency?

Employees need to be pointed in the right direction and told what their purpose is.

Having a purpose will prevent employees from getting bogged down in the minutia.

How is employee morale? Any number of

things can cause poor morale. Often it is related to perceived unequal treatment.

Make sure all employees are expected to meet the same high standards. Be consistent with your relationship. The annual performance review is the time to clearly communicate performance expectations

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and past results.

Is the staff properly trained? On the job training is convenient, but it perpetuates the same old inefficient ways of working.

When possible, it is better to send the employees outside the agency for new ideas. Have the employee inform the rest of the staff on what they learned after they return from trainings.

Does the agency cross-sell on its accounts? Relationships are strengthened when an agency sells more than one coverage to its clients. Efficiencies are gained by earning more commission per account and spending less time generating the sale since they are already familiar with the firm.

Does the agency have any program business? Selling a unique product that is slot rated can be an incredible income generator. Usually these sales require less work to sell and service. The similarity of the book of business can create high productivity.

Do the producers pre-screen their prospects? Pre-screening will help eliminate business that the firm cannot write or should not write. Know the price, product and politics needed to close the sale as soon as possible. It is best to find out the quality of the prospect in the phone call before the visit, than to find out during the marketing process.

Summary Starting this process will take a commitment on the part of all owners, managers and employees. Keep in mind the first step is the hardest. Sometimes it helps to bring in an outside partner to get the process started. Oak & Associates can assist an agency in performing a Management & Organizational Efficiency study.

Small gains when compounded over time result in enormous savings. The goal is to work smarter not harder. Implementing the ideas that are laid out in this article will take some time, but will change the way you do business forever. IJ Oak and Schoeffler are partners at the international consulting firm Oak & Associates, providing services for mergers, acquisitions, management and financial consulting.

Contact: 707-935-6565. E-mail: bill@oakandassociates.com.

Web site: www.oakandassociates.com. www.insurancejournal.com

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Idea Exchange Survey Regional Carriers

Agents, Rate Your Regional Carriers in a New Insurance Journal Sponsored Survey C

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The survey is designed for carriers seeking to understand in an unbiased fashion what agents look for from carriers, and how specific carriers and their competitors are rated by agents. The survey will provide strategic, actionable information for: • Super-regional carriers (about their peer companies).

• Smaller regionals (that are growing and/or competing with larger regionals).

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The syndicated research — with multiple

subscribers sharing the cost — will provide an objective complement to any proprietary surveys carriers may do. This project will provide hard data and a strategic roadmap for carriers looking to boost their business in the challenging year ahead. The survey will address such key questions as: • What are the most important characteristics in agency benefits and service from carriers when agents choose those to place business with?

• How do agents rate regional carriers they have worked with — on 20 different factors?

• How do agents rate specific carriers overall compared with the industry?

• And many other important issues.

To participate in this survey of independent insurance agents, sponsored by Insurance Journal, visit: http://www.insurance journal.com/carriersurvey2009.

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Data are reported only in the aggregate.

The findings also will be released in a special report, “How Independent Insurance Agents View Business with Large Regional Carriers,” in an upcoming issue of Insurance Journal.

For more information about the survey or Channel Harvest Research, go to www.channelharvest.com. IJ

Employment Practices Healthcare Professional Liability e-MD™ NetGuard™ MEDEFENSE™ Identity Theft Miscellaneous E&O Tax Audit writeNOW! Programs

16501 Ventura Blvd., Suite 200 Encino, CA 91436 www.nasinsurance.com LIC #0677191 N10 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009

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Special Report Salute to Super Regionals

T

he original criteria and objective definition for Super Regional P/C Insurersâ&#x201E;˘ were established in the Feb. 12, 2007 issue of Insurance Journal. Prior to the establishment of an industry-wide definition, a number of property/casualty insurers had referred to themselves as Super Regionals. Demotech Inc., the official research partner of Insurance Journal, has been called on to examine the criteria, make changes to the composition of that criteria and update the list of Super Regionals.

To continue the discussion on the subject of what constitutes a Super Regional and to give definition to this important group of

insurers, Demotech, an actuarial services firm based in Columbus, Ohio, analyzed year-end 2008 data. This data was utilized to classify and stratify those insurers reporting data to the National Association of Insurance Commissioners (NAIC).

Company Classification System The experts at Demotech have refined their classification system for property/casualty insurance companies. The Demotech Company Classification System categorizes all property/casualty insurers into one of 11 categories based on an analysis of data reported by the companies to the NAIC.

N12 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009

The 11 categories that comprise the system are: Nationals, Near Nationals, Super Regionals, Regionals, State Specialists, Coverage Specialists, Strategic Subsidiaries, Risk Retention Groups, Surplus Lines Carriers, Reinsurers and companies with less than $1 million in direct written premium.

A company cannot be assigned to more than one category. Therefore, a company not designated as a Super Regional is given another classification, perhaps Near National, Regional, or State Specialist.

Super Regional Criteria and Thresholds To select the companies for the Super www.insurancejournal.com

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Regional Property/Casualty Insurer™ list, Demotech used these specific, objective qualifying criteria and thresholds: • Active, individual companies not under regulatory supervision at Dec. 31, 2008; • Reporting data to the NAIC using the property/casualty annual statement format; • At least $1 million of direct written premium in each of two to 34 states at Dec. 31, 2008; • Less than 90 percent of Dec. 31, 2008, direct written premium in any one state; • Less than 90 percent of Dec. 31, 2008 direct written premium in any one line of

business; • Policyholders surplus of at least $100 million at Dec. 31, 2008; • Net written premium of at least $50 million at Dec. 31, 2008; • Direct written premium of at least $25 million at Dec. 31, 2008.

2009 Property & Casualty Insurance Cos. Demotech Company Classifications Direct Premium Written Less than $1 million 5.2%

Nationals 1.6% Near Nationals 2.4%

Reinsurers 2.3%

Super Regionals 5.4% Surplus Lines Carriers 4.8% Risk Retention Groups 8.0%

In general, a Super Regional Property/ Casualty Insurer™ is an individual company writing multiple lines of insurance in multiple states. Risk retention groups, surplus lines insurers and reinsurers are not eligible for the Super Regional category.

Regionals 10.7%

Strategic Subsidiaries 15.9%

State Specialists 31.3%

Coverage Specialists 12.4%

continued on page N14

2009 Super Regional Property/Casualty Insurers™ Alphabetical Listing Acuity a Mutual Insurance Co. AIG Centennial Insurance Co. AIG Premier Insurance Co. AIU Insurance Co. Alaska National Insurance Co. All America Insurance Co. American Commerce Insurance Co. American Family Home Insurance Co. American Family Mutual Insurance Co. American Hardware Mutual Insurance Co. American International Insurance Co. American Mercury Insurance Co. American Road Insurance Co. Amerisure Insurance Co. Amerisure Mutual Insurance Co. Atlantic States Insurance Co. Auto Club Insurance Assn.

Auto Owners Insurance Co. Automobile Insurance Co of Hartford CT Bankers Standard Insurance Co. Berkley Regional Insurance Co. Bituminous Casualty Corp.

Bituminous Fire & Marine Insurance Co. Brotherhood Mutual Insurance Co. Builders Mutual Insurance Co. California Casualty Indemnity Exchange Cambridge Mutual Fire Insurance Co. Canal Insurance Co. Capitol Indemnity Corp.

Central Mutual Insurance Co. Century-National Insurance Co. Chicago Insurance Co. Citizens Insurance Co. of America Columbia Mutual Insurance Co. Companion Property & Casualty Insurance Co. Concord General Mutual Insurance Co. Cornhusker Casualty Co. Country Mutual Insurance Co. Courtesy Insurance Co. Cumberland Mutual Fire Insurance Co. Cypress Insurance Co. Daimlerchrysler Insurance Co. Darwin National Assurance Co. Delos Insurance Co. Donegal Mutual Insurance Co. Erie Insurance Co. Erie Insurance Exchange Farm Bureau Mutual Insurance Co. Farm Family Casualty Insurance Co. Farmers Alliance Mutual Insurance Co.

www.insurancejournal.com

Farmers Automobile Insurance Assn.

Farmers Mutual Hail Insurance Co. of IA Farmers Mutual Insurance Co. of NE Farmington Casualty Co. Farmland Mutual Insurance Co. FCCI Insurance Co. Federated Service Insurance Co. Fidelity National Insurance Co. Fire Insurance Exchange First Colonial Insurance Co. Frankenmuth Mutual Insurance Co. General Casualty Co. of WI General Fidelity Insurance Co. Grange Insurance Association Grange Mutual Casualty Co. Guideone Mutual Insurance Co. Harco National Insurance Co. Harford Mutual Insurance Co. Harleysville Mutual Insurance Co. Harleysville Preferred Insurance Co. Harleysville Worcester Insurance Co. Hartford Insurance Co. of IL Hastings Mutual Insurance Co. Hudson Insurance Co. IMT Insurance Co. Mutual Indiana Insurance Co. Insurance Co. of North America Insurance Co. of the West Jewelers Mutual Insurance Co. Keystone Insurance Co. Lightning Rod Mutual Insurance Co. Lititz Mutual Insurance Co. Lyndon Property Insurance Co. Memberselect Insurance Co. Merchants Mutual Insurance Co. Mercury Casualty Co. Merrimack Mutual Fire Insurance Co. MHA Insurance Co. Mid-Century Insurance Co. Mid-Continent Casualty Co. Middlesex Insurance Co. Milbank Insurance Co. Mitsui Sumitomo Insurance Co. of America Motorists Mutual Insurance Co. Motors Insurance Corp.

Mountain West Farm Bureau Mutual Insurance Co. Mutual of Enumclaw Insurance Co. Nationwide Mutual Fire Insurance Co. Netherlands Insurance Co. New York Marine & General Insurance Co.

NGM Insurance Co. North River Insurance Co. North Star Mutual Insurance Co. Occidental Fire & Casualty Co. of NC Old Republic General Insurance Corp.

Old United Casualty Co. OneBeacon Insurance Co. Owners Insurance Co. Pacific Specialty Insurance Co. Peerless Insurance Co. Penn National Security Insurance Co. Pennsylvania General Insurance Co. Pennsylvania Manufacturers Assn. Insurance Pennsylvania National Mutual Casualty Insurance Preferred Mutual Insurance Co. Preferred Professional Insurance Co. Progressive Gulf Insurance Co. Progressive Northwestern Insurance Co. Protective Insurance Co. Public Service Mutual Insurance Co. Quincy Mutual Fire Insurance Co. Republic Indemnity Co. of America Republic Underwriters Insurance Co. Safeco Insurance Co. of IL Secura Insurance a Mutual Co. Selective Insurance Co. of America Selective Way Insurance Co. Seneca Insurance Co. Inc Shelter Mutual Insurance Co. Sompo Japan Insurance Co. of America State Auto Property & Casualty Insurance Co. State Automobile Mutual Insurance Co. Stonebridge Casualty Insurance Co. Technology Insurance Co. Inc. Tower Insurance Co. of NY Toyota Motor Insurance Co. Trinity Universal Insurance Co. Triton Insurance Co. Unigard Insurance Co. United Fire & Casualty Co. Utica Mutual Insurance Co. Vanliner Insurance Co. Vermont Mutual Insurance Co. Virginia Surety Co. Inc. West Bend Mutual Insurance Co. Western National Mutual Insurance Co. Westfield Insurance Co. Westfield National Insurance Co. Yosemite Insurance Co.

May 4, 2009 INSURANCE JOURNAL-NATIONAL REGION | N13

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Special Report Salute to Super Regionals Super Regionals, continued from page N13

The 2009 Super Regional Property/Casualty Insurers™ Utilizing these quantitative criteria, Demotech identified 149 Super Regional Property/Casualty Insurers™ for 2009, based upon year-end 2008 annual statement data. They are presented in this exclusive Insurance Journal Special Report both alphabetically and by size as ranked by direct premiums written as of Dec. 31, 2008.

Also included in this special report are the 14 companies that are new to the Super Regional list, as well as 17 insurers that are no longer classified as Super Regionals, but have been reclassified into another one of Demotech’s categories based on year-end 2008 information.

“Super Regional insurers are critically important to the insurance industry and to

their agents, producers and insureds,” said Joseph Petrelli, president, Demotech.

“These companies are strong, stable markets that have been working hard for their agents and insureds. This is why Insurance Journal initially expressed interest in quantifying and identifying what criteria can be used to define an insurer as a Super Regional.”

Insurance Journal and Demotech want this year’s report to continue the discussion on the role of Super Regionals, as well as the definition and criteria used in determining the classification, so that future reports can continue to refine an industry definition of Super Regional Property/Casualty Insurers™.

“Insurers and interested readers are encouraged to examine the selection crite-

NEW 2009 Super Regionals Company Name All America Insurance Co. American Road Insurance Co. Auto Club Insurance Assn.

Bankers Standard Insurance Co. Canal Insurance Co. Daimlerchrysler Insurance Co. Occidental Fire & Casualty Co. of NC Republic Indemnity Co. of America Tower Insurance Co. of NY Toyota Motor Insurance Co. Triton Insurance Co. Netherlands Insurance Co. Safeco Insurance Co. of IL Westfield Insurance Co.

2009 Demotech Company Classification

2008 Demotech Company Classification

Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional

Regional Coverage Specialist Coverage Specialist Strategic Subsidiary Near National Coverage Specialist Regional Coverage Specialist State Specialist Regional Coverage Specialist Strategic Subsidiary Coverage Specialist Near National

ria and thresholds used to determine the list of 2009 Super Regionals. Our selection criteria are quantitative and transparent.

We remain committed to setting benchmarks at levels that accurately categorize the industry,” said Barry J Koestler II, CFA, senior financial analyst and chief ratings officer, Demotech.

The authors stress that this is an objective stratification of the companies that comprise the industry, not ratings of the individual insurers. Inclusion on the list of Super Regionals is not meant to suggest that a company is superior to companies not categorized as Super Regionals.

Future issues of Insurance Journal will report on State Specialists, Coverage Specialists, Regionals and other classifications created and defined by Demotech.

Since 1985, Demotech Inc. has been providing independent Financial Stability Ratings® of property/casualty insurers and title 2007 Demotech insurance underwriters. Its services Company Classification also include statements of actuarial Regional opinion and pricing assistance. For Coverage Specialist Coverage Specialist more information, visit Strategic Subsidiary www.demotech.com.

Near National Coverage Specialist Please send suggestions, comSuper Regional ments and criticisms to Joseph Coverage Specialist Petrelli at e-mail: State Specialist Regional jpetrelli@demotech.com, or Andrew Coverage Specialist Simpson, vice president of editorial Strategic Subsidiary Coverage Specialist for Insurance Journal at e-mail: Super Regional asimpson@insurancejournal.com. IJ

RECLASSIFIED 2008 Super Regionals Company Name Alfa Insurance Corp.

Central States Indemnity Co. of Omaha EMCASCO Insurance Co. Everest National Insurance Co. Hartford Steam Boiler Inspection & Insurance Co. Lumbermens Underwriting Alliance Michigan Millers Mutual Insurance Co. National Farmers Union Property & Casualty National Liability & Fire Insurance Co. Navigators Insurance Co. OneBeacon America Insurance Co. Pennsylvania Lumbermens Mutual Insurance Providence Mutual Fire Insurance Co. Travelers Casualty Insurance Co. of America Truck Insurance Exchange Trumbull Insurance Co. US Fidelity & Guaranty Co.

2009 Demotech Company Classification

2008 Demotech Company Classification

2007 Demotech Company Classification

Reason Not 2009 Super Regional

Strategic Subsidiary Regional Regional Near National Coverage Specialist Regional Regional Regional Near National Near National Near National Regional Regional Near National Near National Regional Coverage Specialist

Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional Super Regional

Super Regional Super Regional Regional Super Regional Near National Regional Super Regional Regional Super Regional Super Regional Super Regional Regional Regional Coverage Specialist Super Regional Super Regional Near National

PHS, NPW NPW PHS States > 34 LOB > 90% PHS PHS PHS States > 34 States > 34 States > 34 PHS PHS States > 34 States > 34 PHS LOB > 90%

PHS = Policyholders’ Surplus; LOB = Line of Business; NPW = Net Premium Written N14 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009

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2009 Super Regional P/C Insurers

TM

As Developed by Demotech Inc. for Insurance Journal, Ranked by Direct Written Premium as of 12/31/08.

Company

12/31/08 DPW 000’s omitted

Group Name

1

American Family Mutual Insurance Co.

5,272,230

American Family

WI

2 3

Erie Insurance Exchange AIU Insurance Co.

3,146,696 2,770,742

Erie American International

PA NY

4

Nationwide Mutual Fire Insurance Co.

2,576,627

Nationwide

OH

5

Mid-Century Insurance Co.

2,461,429

Zurich

CA

6

Auto Owners Insurance Co.

2,119,833

Auto Owners

MI

7 8

Fire Insurance Exchange Westfield Insurance Co.

1,686,491 1,460,344

Zurich Westfield

CA OH

9

Safeco Insurance Co. of IL

1,352,538

Liberty Mutual

IL

10

Owners Insurance Co.

1,198,095

Auto Owners

OH

11 12

Country Mutual Insurance Co. Peerless Insurance Co.

1,146,917 1,073,459

Country Ins./Financial Liberty Mutual

IL NH

13 14 15

Shelter Mutual Insurance Co. Citizens Insurance Co. of America Netherlands Insurance Co.

931,235 927,098 790,738

Shelter The Hanover Liberty Mutual

MO MI NH

16 17 18 19 20 21

Farm Bureau Mutual Insurance Co. Acuity a Mutual Insurance Co. Mercury Casualty Co. Grange Mutual Casualty Co. West Bend Mutual Insurance Co. Automobile Insurance Co. of Hartford CT

787,823 783,483 756,465 704,217 668,505 636,607

Iowa Farm Bureau N/A Mercury General Grange Mutual Casualty West Bend Mutual Travelers

IA WI CA OH WI CT

22 23

NGM Insurance Co. State Auto Property & Casualty Insurance Co.

623,471 612,395

Main Street Amer State Auto Mutual

FL IA

24 25 26 27 28 29 30

Farmers Mutual Hail Insurance Co. of IA Central Mutual Insurance Co. Progressive Northwestern Insurance Co. Selective Way Insurance Co. Tower Insurance Co. of NY Pennsylvania National Mutual Casualty Ins. Harleysville Mutual Insurance Co.

555,396 525,862 507,064 505,944 469,578 462,920 433,462

Farmers Mut Hail Central Mutual Progressive Selective Tower Pennsylvania National Harleysville

IA OH OH NJ NY PA PA

31

State Automobile Mutual Insurance Co.

427,502

State Auto Mutual

OH

32 33

Motorists Mutual Insurance Co. American International Insurance Co.

413,035 412,201

Motorists Mutual American International

OH NY

34 35 36 37

Erie Insurance Co. Selective Insurance Co. of America Frankenmuth Mutual Insurance Co. General Casualty Co. of WI

407,630 407,016 399,711 399,301

Erie Selective Frankenmuth Mutual QBE

PA NJ MI WI

38

Virginia Surety Co. Inc.

399,183

Warranty

IL

39 40 41 42

Amerisure Mutual Insurance Co. Memberselect Insurance Co. Farm Family Casualty Insurance Co. Technology Insurance Co. Inc.

398,301 389,425 380,728 359,553

Amerisure Automobile Club MI American Natl. Financial Amtrust

MI MI NY NH

43

Bituminous Casualty Corp.

345,575

Old Republic

IL

www.insurancejournal.com

State of Domicile

Number/States with Greater Than $1 Million DPW 12/31/2008 18 - AZ,CO,ID,IL,IN,IA,KS,MN,MO,NE,NV,ND,OH,OR, SD,UT,WA,WI 10 - DC,IL,IN,MD,NC,OH,PA,TN,VA,WI 25 - AL,AK,CA,CO,CT,DE,GA,KS,LA,ME,MD,MI,MO, NJ,NY,OH,OR,PA,TN,TX,VT,VA,WA,WV,WI 31 - AL,AZ,AR,CA,CT,DE,DC,FL,GA,IL,IN,KY,ME,MD,MI, MS,NH,NY,NC,OH,OK,OR,PA,RI,SC,TN,TX,VT,VA,WA,WV 30 - AL,AZ,AR,CA,CO,ID,IL,IN,IA,KS,MI,MN,MO,MT, NE,NV,NM,ND,OH,OK,OR,SD,TN,TX,UT,VT,VA,WA,WI,WY 25 - AL,AZ,AR,CO,FL,GA,ID,IL,IN,IA,KS,KY,MI,MN, MO,NE,NC,ND,OH,SC,SD,TN,UT,VA,WI 14 - AL,CA,CO,MI,MO,MT,NE,NV,ND,SD,TX,UT,WI,WY 34 - AZ,AR,CO,DE,FL,GA,ID,IL,IN,IA,KS,KY,LA,MD,MI,MN,MS, MO,MT,NE,NM,NC,ND,OH,OK,PA,SC,SD,TN,TX,VA,WA,WV,WI 29 - AL,AK,AR,CA,CT,FL,GA,ID,IL,IN,KY,MD,MI,MN,MS,MO, MT,NE,NV,OH,OR,PA,TN,TX,UT,VA,WA,WI,WY 24 - AL,AZ,AR,CO,FL,GA,ID,IL,IN,IA,KS,KY,MN,MO,NE,NC,ND, OH,SC,SD,TN,UT,VA,WI 14 - AK,AZ,CO,IL,IA,KS,MN,MO,NV,ND,OK,OR,WA,WI 32 - AR,CA,CT,DE,DC,GA,IL,IN,IA,KS,KY,LA,ME,MD,MA,MI,MN, MO,NE,NH,NY,NC,OH,OK,PA,RI,SC,TN,TX,VT,VA,WI 13 - AR,CO,IL,IN,IA,KS,KY,LA,MS,MO,NE,OK,TN 15 - CT,GA,IL,IN,ME,MA,MI,NH,NJ,NY,OH,PA,RI,VA,WI 32 - AR,CA,CT,DE,GA,IL,IN,IA,KS,KY,LA,ME,MD,MA,MI,MN,MO, NE,NH,NJ,NY,NC,OH,OK,PA,RI,SC,TN,TX,VT,VA,WI 8 - AZ,IA,KS,MN,NE,NM,SD,UT 17 - AZ,CO,ID,IL,IN,IA,KS,KY,MI,MN,MO,NE,ND,OH,SD,TN,WI 5 - AZ,CA,NV,NY,VA 6 - GA,IL,IN,KY,OH,TN 7 - IL,IN,IA,MI,MN,OH,WI 34 - AL,AZ,AR,CO,CT,DC,GA,ID,IL,IN,KS,KY,LA,ME,MD,MI,MN, MS,MO,MT,NV,NH,NY,NC,OH,OK,OR,PA,SC,TN,UT,VA,WA,WI 16 - CT,DE,FL,ME,MD,MA,NH,NY,NC,PA,RI,SC,TN,TX,VT,VA 26 - AL,AZ,AR,FL,GA,IL,IN,KS,KY,MD,MI,MN,MS,MO,NC,ND, OH,OK,PA,SC,TN,TX,UT,VA,WV,WI 15 - AR,CO,IL,IN,IA,KS,MI,MN,MO,NE,ND,OH,OK,SD,WI 18 - AZ,CO,CT,GA,IL,IN,MA,NH,NJ,NM,NY,NC,OH,OK,SC,TN,TX,VA 17 - AK,AZ,AR,CT,HI,ID,IN,KS,ME,MO,MT,NV,NY,ND,RI,VA,WA 10 - DE,DC,GA,MD,MI,NJ,NY,PA,SC,VA 17 - AZ,AR,CA,CT,FL,GA,ID,IL,MA,MN,NV,NJ,NY,PA,SC,TX,WA 12 - AL,DE,GA,MD,NJ,NY,NC,PA,SC,TN,TX,VA 21 - AL,AR,CA,CT,DE,DC,FL,GA,LA,MD,MA,MS,NJ,NC,OH,PA, RI,SC,TN,TX,VA 24 - AL,AZ,AR,CO,GA,IL,IN,IA,KS,KY,MD,MI,MN,MS,MO,NC,OH, PA,SC,TN,TX,VA,WV,WI 5 - IN,KY,OH,PA,WV 34 - AL,AK,AZ,AR,CO,DE,DC,FL,GA,ID,IL,IN,IA,KY,LA,MD,MA, MI,MN,MS,MO,MT,NE,NV,NH,NM,NY,OK,PA,RI,SC,TX,UT,WA 10 - IL,IN,MD,NY,NC,OH,PA,TN,VA,WI 11 - CA,DE,DC,GA,HI,MD,NJ,NY,PA,SC,VA 9 - GA,IL,IN,MI,NC,OH,SC,TN,WI 20 - AR,CO,CT,IL,IN,IA,KS,KY,MA,MI,MN,MO,NE,NY,ND,OH, PA,SD,TX,WI 30 - AZ,AR,CA,CT,DE,DC,FL,GA,IL,IN,IA,KS,LA,MD,MA,MI,MN, MO,NE,NY,NC,OH,OK,PA,SC,TN,TX,VA,WA,WI 19 - AL,AR,CA,FL,GA,IL,IN,KS,KY,LA,MI,MS,MO,NC,OK,SC,TN,TX,WI 7 - IL,IN,IA,MI,NE,ND,OH 10 - CT,DE,ME,MA,NH,NJ,NY,RI,VT,WV 26 - AL,AZ,AR,CT,DE,FL,GA,ID,IL,IN,KS,MD,MA,MN,MS,MO, MT,NH,NY,NC,PA,SC,TN,TX,VT,VA 31 - AL,AZ,AR,CO,FL,GA,IL,IN,IA,KS,KY,LA,MD,MI,MN,MS, MO,MT,NE,NM,NC,OK,OR,PA,SC,TN,TX,UT,VA,WI,WY

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Special Report Salute to Super Regionals Company

12/31/08 DPW 000’s omitted

Group Name

44

Pennsylvania Manufacturers Assn. Ins.

337,846

PA Manufacturers

PA

45

Delos Insurance Co.

319,717

Lightyear Delos

DE

46 47 48 49

Auto Club Insurance Assn.

Mutual of Enumclaw Insurance Co. Indiana Insurance Co. United Fire & Casualty Co.

302,054 300,844 298,040 297,973

Automobile Club MI Mutual of Enumclaw Liberty Mutual United Fire & Casualty

MI WA IN IA

50

Motors Insurance Corp.

296,305

GMAC Insurance Holding

MI

51 52

Hastings Mutual Insurance Co. Guideone Mutual Insurance Co.

291,534 286,655

N/A Guideone

MI IA

53 54

Merrimack Mutual Fire Insurance Co. Hudson Insurance Co.

286,580 269,567

Andover Fairfax Financial

MA DE

55 56 57 58

Progressive Gulf Insurance Co. Harleysville Worcester Insurance Co. Quincy Mutual Fire Insurance Co. Farmington Casualty Co.

269,379 264,127 263,152 261,958

Progressive Harleysville Quincy Mutual Travelers

MS PA MA CT

59 60 61

Insurance Co. of the West Westfield National Insurance Co. Old Republic General Insurance Corp.

258,771 257,473 257,086

ICW Westfield Old Republic

CA OH IL

62

California Casualty Indemnity Exchange

256,312

California Cas Mgmt

CA

63 64 65 66

Companion Property & Casualty Insurance Co. Unigard Insurance Co. Secura Insurance a Mutual Co. Triton Insurance Co.

252,624 252,292 239,263 231,299

BCBS of SC QBE Secura Citigroup

SC WA WI TX

67 68

FCCI Insurance Co. Utica Mutual Insurance Co.

228,471 227,234

FCCI Mutual Utica

FL NY

69 70 71

Amerisure Insurance Co. Vermont Mutual Insurance Co. AIG Centennial Insurance Co.

225,241 215,176 212,890

Amerisure Vermont Mutual American International

MI VT PA

72 73 74 75 76

Mid-Continent Casualty Co. Western National Mutual Insurance Co. Preferred Mutual Insurance Co. Farmers Automobile Insurance Assn.

Brotherhood Mutual Insurance Co.

211,459 211,280 208,502 208,013 207,725

American Financial Western National N/A Pekin N/A

OH MN NY IL IN

77 78 79

Donegal Mutual Insurance Co. Farmers Mutual Insurance Co. of NE American Road Insurance Co.

207,332 204,169 199,326

Donegal N/A American Road

PA NE MI

80 81

Alaska National Insurance Co. Canal Insurance Co.

196,913 196,538

N/A Canal

AK SC

82

American Family Home Insurance Co.

191,855

Munich Re

FL

83

Courtesy Insurance Co.

189,417

JM Family

FL

84

Sompo Japan Insurance Co. of America

187,516

Sompo Japan

NY

85

Mitsui Sumitomo Insurance Co. of America

185,003

Mitsui Sumitomo

NY

86

North River Insurance Co.

182,574

Fairfax Financial

NJ

87 88

American Commerce Insurance Co. Stonebridge Casualty Insurance Co.

179,965 179,672

Commerce Aegon US Holding

OH OH

89 90

North Star Mutual Insurance Co. Vanliner Insurance Co.

175,720 172,041

North Star N/A

MN MO

91

New York Marine & General Insurance Co.

164,797

New York Marine & General NY

92

Lyndon Property Insurance Co.

162,031

Protective Life

N16 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009

State of Domicile

MO

Number/States with Greater Than $1 Million DPW 12/31/2008 31 - AL,AZ,AR,CA,CO,CT,DE,FL,GA,IL,IN,KS,KY,MD,MA,MI,MN, MS,MO,NV,NH,NJ,NY,NC,PA,SC,TN,TX,VA,WV,WI 30 - AL,AZ,AR,CA,CT,DE,DC,FL,GA,HI,IL,IN,KS,LA,MD,MI,MN, MS,MO,NE,NV,NJ,NY,OH,PA,TN,TX,VA,WA,WI 5 - MI,MN,NE,ND,WI 4 - ID,OR,UT,WA 7 - IL,IN,KY,MI,NJ,OH,TN 22 - AL,AR,CO,FL,ID,IL,IN,IA,KS,LA,MN,MS,MO,NE,NM,ND,SD, TN,TX,UT,WI,WY 26 - AL,AR,CA,CO,FL,GA,IL,IN,IA,KS,LA,MI,MN,MO,NE,NJ,NM, NY,NC,OH,OK,PA,SC,TN,TX,WI 5 - IL,IN,MI,OH,WI 34 - AL,AZ,CA,CO,CT,DC,FL,GA,IL,IN,IA,KS,KY,LA,MD,MI,MN, MS,MO,NE,NJ,NY,NC,ND,OH,OK,OR,PA,SC,TN,TX,VA,WA,WI 8 - CT,IL,ME,MA,NH,NJ,NY,RI 30 - AL,AZ,AR,CA,CO,DC,FL,GA,HI,IL,IN,LA,MD,MA,MI,MN,MO, NV,NJ,NY,NC,OH,OR,PA,SC,TN,TX,UT,VA,WA 3 - GA,MS,VA 7 - CT,ME,MA,NH,NY,RI,VT 5 - CT,MA,NJ,NY,RI 26 - AL,CA,CO,CT,DE,DC,GA,IL,IN,IA,KS,KY,MD,MI,MN,MS,MO, NM,NY,NC,OK,OR,PA,SC,TN,TX 14 - AK,AZ,CA,CO,FL,ID,MS,MO,NV,OR,TN,TX,UT,WA 9 - CA,IL,IN,IA,KY,MN,OH,PA,TN 22 - AZ,CA,CO,CT,DC,FL,GA,HI,IL,MD,MA,MO,NV,NH,NJ,NY, NC,PA,RI,SC,TX,VA 22 - AL,AZ,CA,CO,CT,DE,GA,ID,IN,IA,KS,KY,MD,MN,NV,NM,OK, PA,TN,TX,VA,WA 17 - AL,FL,GA,IL,IN,KY,LA,MD,MS,NJ,NC,PA,SC,TN,TX,VA,WI 8 - AZ,CA,ID,MT,NV,OR,UT,WA 12 - AZ,CO,IL,IN,IA,KS,KY,MI,MN,MO,ND,WI 25 - AL,AZ,CA,CO,DE,FL,GA,HI,IN,IA,KS,MN,MO,NJ,NM,NC,OH, PA,SC,TN,TX,VA,WA,WV,WI 10 - AL,FL,GA,IL,IN,KY,MI,NC,SC,TN 25 - CO,CT,DE,FL,GA,IL,IN,KY,MD,MA,MI,MN,MO,NH,NJ,NY, NC,OH,PA,SC,TN,TX,VA,WA,WI 15 - AL,AR,FL,GA,IL,IN,KS,KY,MI,MS,MO,NC,SC,TN,TX 7 - CT,ME,MA,NH,NY,RI,VT 31 - AL,AZ,CT,DE,DC,FL,GA,IN,KS,LA,ME,MI,MN,MO,MT,NH, NJ,NY,NC,OH,OK,PA,RI,SC,TN,TX,VT,VA,WA,WV,WI 14 - AR,CO,FL,KS,MI,MO,MT,NM,ND,OK,OR,TX,UT,WY 5 - IA,MN,ND,SD,WI 4 - MA,NH,NJ,NY 4 - IL,IN,IA,WI 25 - AZ,AR,CA,CO,GA,IL,IN,IA,KS,KY,MD,MI,MS,MO,NM,NC,OH, OK,OR,PA,SC,TN,VA,WA,WV 5 - DE,MD,OH,PA,VA 2 - NE,SD 28 - AL,CA,CO,FL,GA,IL,IN,KS,KY,LA,MD,MA,MI,MN,MS,MO,NE, NJ,NY,NC,OH,OK,PA,SC,TN,TX,VA,WI 6 - AK,CA,ID,LA,OR,WA 29 - AL,AZ,AR,CO,CT,DE,FL,GA,IL,IN,KY,ME,MD,MS,MO,NV,NC, OH,OK,OR,PA,RI,SC,TN,UT,VA,WA,WV,WI 30 - AL,AZ,AR,CA,CO,FL,GA,IL,IN,KS,KY,LA,MD,MI,MS,MO,NV, NJ,NM,NY,NC,OH,OK,OR,PA,SC,SD,TN,VA,WA 21 - AZ,AR,CA,CO,FL,GA,IL,ME,MD,MN,MS,MO,NC,OH,OK, OR,PA,SC,TN,VA,WI 31 - AL,AR,CA,CT,FL,GA,IL,IN,IA,KY,LA,MD,MA,MI,MN,MS,MO, NH,NJ,NY,NC,OH,OK,OR,PA,SC,TN,TX,VA,WA,WI 28 - AL,AZ,CA,CO,CT,FL,GA,HI,IL,IN,KY,LA,MA,MI,MO,NV,NJ, NY,NC,OH,OR,PA,RI,SC,TN,TX,VA,WA 29 - AL,AZ,CA,CO,CT,DE,FL,GA,HI,IL,IN,KY,LA,MD,MA,MI,MN, MO,NJ,NY,NC,OH,OK,PA,SC,TN,TX,VA,WI 14 - AZ,CT,ID,IL,IN,KY,NJ,OH,OK,OR,PA,RI,TN,WA 29 - AL,AZ,CA,CO,CT,FL,GA,IL,IN,IA,LA,MD,MA,MI,MN,MO, NV,NJ,NY,NC,OH,OR,PA,SC,TN,TX,VA,WA,WI 5 - MN,NE,ND,OK,SD 32 - AL,AK,AZ,CA,CO,CT,FL,GA,IL,IN,KS,KY,MD,MA,MI,MN,MO, MT,NE,NJ,NY,NC,OH,OR,PA,SC,TN,TX,VT,VA,WA,WI 25 - AL,CA,CO,CT,FL,GA,IL,KS,KY,LA,MA,MO,NV,NJ,NM,NY,NC, OH,OK,PA,SC,TN,TX,VA,WA 27 - AL,AZ,CA,CO,CT,FL,GA,IL,IN,IA,KY,ME,MD,MI,MN,MO,NE, NJ,NC,OH,OR,PA,TN,TX,VA,WA,WI

www.insurancejournal.com

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Company

12/31/08 DPW 000â&#x20AC;&#x2122;s omitted

Group Name

State of Domicile

93 94 95 96

Century-National Insurance Co. Concord General Mutual Insurance Co. Trinity Universal Insurance Co. OneBeacon Insurance Co.

161,406 159,637 156,401 153,157

N/A Concord Unitrin White Mountain

CA NH TX PA

97

Protective Insurance Co.

151,242

Baldwin & Lyons

IN

98 99 100 101 102 103 104 105

Hartford Insurance Co. of IL Fidelity National Insurance Co. Cypress Insurance Co. Merchants Mutual Insurance Co. Builders Mutual Insurance Co. Pacific Specialty Insurance Co. Public Service Mutual Insurance Co. First Colonial Insurance Co.

144,298 142,296 139,637 138,021 136,928 135,050 130,126 118,390

Hartford Fire & Casualty Fidelity Natl. Financial Berkshire Hathaway Merchants Mutual Builders Western Service Contract Public Service Allstate

IL CA CA NY NC CA NY FL

106 Jewelers Mutual Insurance Co.

117,289

N/A

WI

107 108 109 110 111

116,609 116,545 115,768 114,174 111,596

American Financial Mercury General N/A Andover N/A

CA OK WY MA MI

112 Harleysville Preferred Insurance Co 113 Grange Insurance Association 114 Preferred Professional Insurance Co

110,041 109,540 108,894

Harleysville Grange N/A

PA WA NE

115 Farmers Alliance Mutual Insurance Co. 116 Chicago Insurance Co.

105,693 103,396

Alliance Allianz

KS IL

117 118 119 120 121 122 123 124

101,957 101,255 100,747 99,651 96,326 93,110 92,474 90,926

Donegal Fairfax Financial Van Enterprises Cumberland IAT Reins Columbia Fincor Holdings Federated Mutual

PA NY KS NJ NC MO MI MN

125 Toyota Motor Insurance Co.

90,700

N/A

IA

126 IMT Insurance Co. Mutual 127 Harco National Insurance Co.

89,804 88,967

IMT Mutual Holding IAT Reins

IA IL

128 Darwin National Assurance Co.

85,574

Allied World Assur. Holding DE

129 Middlesex Insurance Co. 130 AIG Premier Insurance Co. 131 American Hardware Mutual Insurance Co.

84,259 83,715 83,062

Sentry American International Motorists Mutual

WI PA OH

132 Harford Mutual Insurance Co. 133 Farmland Mutual Insurance Co.

77,359 74,882

Harford Nationwide

MD IA

134 Capitol Indemnity Corp.

73,876

Alleghany

WI

135 136 137 138 139 140 141 142 143 144 145 146 147 148 149

72,396 72,194 70,472 68,797 62,652 57,090 56,782 56,231 53,558 43,608 41,419 39,350 38,521 31,353 29,209

Ace Ltd. White Mountain State Auto Mutual Western Reserve AAA Mid Atlantic Pennsylvania National Central Mutual WR Berkley Lititz Mutual Berkshire Hathaway American International Delek Old Republic Ace Ltd Bankamerica

PA PA SD OH PA PA OH DE PA NE IN TX IL PA SC

Republic Indemnity Co. of America American Mercury Insurance Co. Mountain West Farm Bureau Mutual Ins. Co. Cambridge Mutual Fire Insurance Co. Daimlerchrysler Insurance Co.

Atlantic States Insurance Co. Seneca Insurance Co. Inc. Old United Casualty Co. Cumberland Mutual Fire Insurance Co. Occidental Fire & Casualty Co. of NC Columbia Mutual Insurance Co. MHA Insurance Co. Federated Service Insurance Co.

Insurance Co. of North America Pennsylvania General Insurance Co. Milbank Insurance Co. Lightning Rod Mutual Insurance Co. Keystone Insurance Co. Penn National Security Insurance Co. All America Insurance Co. Berkley Regional Insurance Co. Lititz Mutual Insurance Co. Cornhusker Casualty Co. Yosemite Insurance Co. Republic Underwriters Insurance Co. Bituminous Fire & Marine Insurance Co. Bankers Standard Insurance Co. General Fidelity Insurance Co.

Number/States with Greater Than $1 Million DPW 12/31/2008 4 - AZ,CA,IL,NV 3 - ME,NH,VT 8 - AL,AR,ID,LA,MT,OK,TX,UT 30 - AZ,AR,CA,CO,DC,FL,IL,IN,IA,KS,KY,LA,MA,MI,MN,MS,MO, MT,NJ,NM,NY,OH,OK,OR,PA,SC,TX,VA,WA,WI 21 - AZ,CA,CO,FL,GA,IL,IN,MD,MI,MO,NJ,NY,NC,OH,OR,PA, TN,TX,UT,WA,WI 4 - CT,IL,NY,PA 15 - AZ,CA,FL,HI,LA,MS,MO,NE,NV,NY,PA,SC,TX,VA,WA 3 - AR,CA,GA 9 - MA,MI,NH,NJ,NY,OH,PA,RI,VT 4 - NC,SC,TN,VA 4 - AZ,CA,GA,TX 13 - AZ,CA,CO,CT,IL,MA,NJ,NY,OR,PA,RI,TX,WA 30 - AZ,AR,CO,FL,GA,IL,IN,IA,KS,KY,LA,MD,MA,MI,MN,MO,NE, NV,NJ,NM,NC,OH,OK,PA,SC,TN,TX,UT,VA,WA 30 - AL,AZ,AR,CA,CO,CT,FL,GA,HI,IL,LA,MD,MA,MI,MN,MO, NV,NJ,NM,NY,NC,OH,OK,PA,SC,TN,TX,VA,WA,WI 10 - AK,AZ,CA,CO,GA,IL,NV,NM,OH,UT 6 - CA,CO,FL,GA,OK,TX 2 - MT,WY 7 - CT,IL,ME,MA,NH,NY,RI 28 - AL,CA,CO,FL,GA,IL,IN,KS,LA,MD,MA,MI,MN,MS,MO,NE, NJ,NM,NY,NC,OH,OK,PA,SC,TN,TX,VA,WA 9 - CT,DE,MD,MA,NJ,NC,PA,TN,VA 6 - CA,CO,ID,OR,WA,WY 20 - CA,CO,FL,IL,IN,IA,KS,KY,LA,MD,MO,MT,NE,NJ,NY,OH, PA,TX,WA,WI 9 - CO,ID,KS,MO,MT,NE,ND,OK,SD 24 - AZ,CA,CO,CT,DC,FL,GA,HI,IL,IN,IA,MD,MA,MI,MO,NJ,NY, NC,OH,PA,TN,TX,VA,WA 7 - DE,GA,MD,NY,OH,PA,VA 17 - AZ,CA,CO,CT,FL,IL,KY,MD,MA,MI,NV,NJ,NY,NC,OH,PA,VA 7 - AZ,CA,FL,KS,MI,MO,TX 4 - DE,MD,NJ,PA 17 - AL,AZ,CA,FL,GA,IL,IN,KY,LA,MO,NV,NJ,OH,SC,TN,TX,VA 8 - AR,IL,IA,KS,MO,NE,OK,SD 8 - IA,KY,MI,MN,ND,OH,SD,WI 28 - AL,AR,CA,CO,GA,IL,IN,IA,KS,KY,MI,MN,MO,NE,NV,NM,NC, ND,OH,OK,PA,SC,SD,TN,TX,VA,WA,WI 19 - AZ,AR,CA,CO,FL,IN,KY,MD,MA,MI,MS,NV,NJ,OK,OR,PA, TN,VA,WA 5 - IL,IA,NE,SD,WI 25 - AZ,CA,CT,FL,GA,IL,IN,LA,MI,MS,MO,NE,NV,NJ,NY,NC,ND, OH,OK,OR,PA,TN,UT,WA,WI 21 - AZ,CO,CT,FL,GA,IL,MD,MA,MI,MN,NJ,NY,NC,OH,OK,OR, PA,TX,VA,WA,WI 15 - CA,CO,CT,FL,GA,IL,IN,KS,MN,MO,NJ,OH,TN,TX,WI 16 - CA,CT,FL,ME,MI,MN,MO,MT,NV,NJ,NY,OH,PA,VA,WA,WY 19 - AZ,CA,CO,ID,IL,IA,KY,MA,MI,MN,NV,NJ,NY,OH,OR,PA, TX,WA,WI 7 - DE,DC,MD,NC,PA,TN,VA 24 - AL,AR,GA,ID,IL,IN,IA,KS,KY,MN,MS,MO,MT,NE,NC,ND,OH, OK,SD,TN,TX,WA,WI,WY 20 - AZ,CA,CO,GA,IL,IN,KY,MI,MN,MO,MT,NV,ND,OH,OK,OR, PA,SD,WA,WI 5 - CA,FL,MA,NY,WA 8 - CA,CT,MA,NH,NM,NY,RI,TX 6 - AZ,IN,MN,ND,SD,UT 2 - IN,OH 5 - DE,MD,NJ,PA,VA 8 - AL,DE,MD,NC,PA,SC,TN,VA 14 - AZ,CT,GA,IL,IN,MA,NJ,NY,NC,OH,OK,SC,TN,VA 8 - FL,GA,ME,NV,NY,NC,TN,TX 9 - DE,KS,MD,MO,NC,PA,SC,VA,WV 10 - AK,CO,ID,IA,KS,NE,NC,SC,VA,WA 15 - AZ,CA,CO,FL,GA,IL,IN,KY,NC,OH,PA,SC,TN,VA,WI 5 - LA,MS,NM,OK,TX 12 - FL,IL,IA,MI,MO,NE,NC,OK,PA,TX,VA,WI 7 - CT,FL,GA,IL,NJ,NY,PA 11 - AL,FL,GA,IN,LA,MO,NJ,NM,NY,OH,WA

Data Source: The National Association of Insurance Commissioners, Kansas City, Mo., by permission. Information derived from a Highline Data product. The NAIC and Highline Data do not endorse any analysis or conclusion based upon the use of its data. www.insurancejournal.com

May 4, 2009 INSURANCE JOURNAL-NATIONAL REGION | N17

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National Coverage News & Markets Risk Managers Report ‘Soft Landing’ for Market Pricing

I

nsurance premiums for businesses continued to slide towards a “soft landing” rather than an abrupt reversal resulting in rate increases, according to risk managers.

While banks and other financial institutions bought directors and officers (D&O) insurance at substantially higher rates, the rest of the commercial insurance market in the first three months of 2009 saw a continuing trend of little or no change in rates, according to RIMS Benchmark Survey, a survey of policy renewal prices as reported by North American corporate risk managers.

General liability premiums fell 3.8 percent for policies renewing during the first quarter of 2009, as compared to a 5.9 percent decline in the fourth quarter of 2008, risk managers reported. The average workers’ compensation premium fell 2.5 percent, which is similar to price decreases in the past several quarters.

The average property renewal was flat for the first quarter as compared to a decline of

3.8 percent in the fourth quarter of 2008, the survey revealed. Also noted was a wide range of changes in recent renewal premiums for individual property risks: Premium changes ranged from a decrease of 11 percent to an increase of 14 percent.

Risk managers said the D&O market continued to be split between financial institution (FI) risks and all other (commercial) risks. Overall, the average D&O premium increased by 3 percent, but the increase was driven entirely by financial companies.

Excluding FI firms, the average renewal was down 3 percent, the survey found.

Higher FI premiums are the outcome of massive losses from the meltdown of the subprime mortgage market and the ensuing credit crisis. By comparison, overall D&O rates fell 1.2 percent in the fourth quarter of 2008 and fell 4.5 percent during that period excluding FI firms.

“Even though the credit crisis and the

N18 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009

continued on page N20

Bad Economy Not Impacting Essential Insurance Coverages

M

any Americans have taken steps to reduce personal insurance costs in response to the economic downturn, but a new industry study suggests that maintaining essential auto and homeowners coverage remains a priority for the most consumers.

Twenty-eight percent of those with auto insurance coverage surveyed by the Insurance Research Council (IRC) reported shopping for lower rates when they normally would not have done so. Among those with auto or homeowners insurance, 15 percent said they had increased their insurance deductibles or reduced the amount of coverage to reduce premium costs.

Most Americans, however, have maintained essential homeowners and auto insurance coverage despite the challenges posed by the ecocontinued on the bottom of page N20

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National Coverage News & Markets Risk Managers, continued from page N18

global recession have had a negative impact on insurers’ top and bottom lines, so far financial institution D&O is the only segment tracked by RIMS Benchmark Survey to respond with higher premiums,” said Dave Bradford, Advisen’s executive vice president and editor-in-chief of RIMS Benchmark Survey. “Insurers struggle against falling rates, increased losses in some lines, and sharply lower investment income due to the credit crisis, but the commercial insurance industry is still overcapitalized.”

RIMS Benchmark Survey is produced by Advisen Ltd., which collects and analyzes the data and provides the technology infrastructure for the survey’s online services. IJ Bad Economy, continued from page N18

nomic downturn, according to the study. Nine percent of those with at least one household vehicle reported canceling or not renewing coverage for a household vehicle in response to the economic downturn. However, almost one-third (31 percent) of those canceling auto insurance coverage also reported selling a vehicle as a way to save money, so many of those vehicles for which insurance coverage was canceled were also likely sold.

Five percent of homeowners and 14 percent of renters reported canceling homeowners or renters insurance coverage.

The study also reported on the frequency with which consumers have taken other steps in response to the downturn. For example, 65 percent reported greatly reducing their expenditures on entertainment. Thirty-seven percent reported postponing the purchase of a major household appliance.

“These findings confirm that most Americans recognize the importance of maintaining essential insurance coverage on their homes and cars,” said Elizabeth A. Sprinkel, senior vice president of the IRC. “But they also show that Americans are willing to shop and reevaluate their insurance needs in order to reduce insurance costs.”

The results of the IRC’s report, “Public Attitude Monitor 2009, Consumer Response to the Economic Downturn,” are based on 1,000 telephone interviews conducted with adults age 18 and older in December 2008 by GfK Custom Research North America.

Copies of the study are available for $65 each in the U.S. at: www.ircweb.org. IJ www.insurancejournal.com

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The Insurance Professional’s Guide to Workers’ Compensation: From History History through through Audit Audit From Author: Christopher J. Boggs, CPCU, ARM, ALCM, LPCS, AAI, APA Price: $55.00 for paperback and $49.95 for a pdf download Available at: http://ijmag.com/wcbook

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1 2 3 4

Legal and contractual concepts surrounding workers’ compensation presented in simple, non-legal terms.

Provides selected statutory information for every state.

Allows the reader to understand the framework on which workers’ compensation coverage is built.

Designed to combine statutes, common law, contracts and the human element of workers’ compensation into one resource.

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Closer Look Agency Technology

Social Networking in an Insurance World Web 2.0 Tools Enhance the Face-to-Face Interactions in the Industry

By Nicole Bissett

I

nsurance firms that have used the tools with their agents and prospective clients. of Web 2.0 appear to be won over for They are experimenting with Twitter to keep good, and have little to say that is negatheir agents up-to-date with what’s happentive. ing in the markets.

Snyder says social McAuley, Woods & Associates, a privately networking tools held boutique wholesale brokerage based in only enhance facePalm Beach, Fla., is one company that has to-face interaction benefitted. McAuley, Woods & Associates, between customers. which uses a select group of retail agents “You can start a conthroughout the United States, began using a versation and relawiki, a internal collection of Web pages that tionship in person allows anyone in the company to contribute and then continue it content,just nine months ago. in the community So far reviews from the McAuley, Woods & getting input from Associates’ employees are positive. everyone,” he said.

Jim Snyder, a property/casualty broker who heads up marketing efforts for McAuley, Community Woods & Associates says, the brokerage is Benefits currently putting all of its corporate knowlMike Wise, the edge into the wiki. “We have our corporate vice president of IdeaStar, also believes agents processes there as well as training videos and will benefit from these tools. marketing information for all of our carriers,” “My opinion is the social web is really putSnyder says. The wiki, Snyder says, can be ting the agents back in the driver’s seat after updated by anyone in the company. Everyone being sort of disenfranchised a little bit over contributes by entering their knowledge in to the past few years because of search engines,” the firm’s wiki.

Wise said. “Everybody’s focused on going and Their main use for it is to market, and to doing a search on a particular insurance share their success stories. They also receive product or need. The big direct consumer updates from underwriters on a daily basis marketers were dominating the search concerning their appetites and where they are results and the agents were open and closed. The brokerkind of left out when it came age also uses the wiki for ‘The social web to all that traffic.” forums and blogs to share IdeaStar, based in information with each other. is really putting Cleveland, Ohio, provides Snyder says it is now faster the agents back Web-based software applicaand easier to access informations to help customers create tion when answering quesin the driver’s online initiatives. Wise says tions over the phone. “We can seat ...’

Web 2.0 tools such as Twitter, look into the wiki and see blogs, podcasting, videocastwhat we’ve done in the past,” ing, YouTube, and others, are excellent from a he said. “It helps us market faster and give prospecting standpoint. them answers quicker.”

These tools are appreciated by other Snyder believes the wiki will be an excelexperts in the field of technology as well. lent teaching tool for new employees. He also Rick Morgan, a board member for the believes the firm’s underwriting guides will Agents Council for Technology (ACT), who become more robust as they build the library has four decades of experience in technology, of risks and how to place them. marketing, and publishing in the independThe firm also uses LinkedIn to keep up N22 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009

ent insurance agency system, says these tools are easy to use, and very inexpensive. He believes in the concept of social networking, not just because the tools are inexpensive.

“When you engage in the social networking world, you build relationships, and relationships are important,” Morgan said.

“In the agency world of sales, service, and marketing, what they do in small, home-town, Main Street businesses, is they depend a great deal on relationships and on trust. Part of what social networking does is help in that area. It enables, in a digital way, relationship.”

Morgan’s message is that social networking is not a fad; it is a way of tapping in to a core, human desire to belong to a community.

Downsides So with all the benefits of Web 2.0, is there a downside?

As with anything, Snyder believes there are some concerns. Loss of control and mis-information are always possible contingencies.

“For our internal wiki, if you have rogue employees that deliberately want to try and put false information in, they can certainly do it,” he said.

Future revenue possibilities can’t yet be determined from the use of these tools. Even so, Snyder believes they increase the company’s marketing efficiency. “We’re looking for ways to open this up to our retailers and underwriters so we can all communicate as one team in the future,” he said. “This is a bit far off since there are many issues to consider, but it is my vision to help make our business more transparent to our customers.” IJ www.insurancejournal.com

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New Markets The following markets were selected from the MyNewMarkets database of 25,000 coverages and programs. To find additional markets, or to submit markets, go to www.MyNewMarkets.com.

Products Liability for Roller Coasters and Rides Market Detail: MarketScout (www.marketscout.com) offers agents access to products and completed operations coverage for amusement ride manufacturers and importers. In addition to general liability, the insured can purchase protection for discontinued products, excess liability and workers’ compensation. Minimum premiums begin at $20,000 and the insured can apply as high as $10,000 SIR’s.

Available Limits: $1 million to $5 million.

Carriers: Unable to disclose. “A++” rated

by A.M. Best. Non-admitted.

States: All. Contact: John Gaskill at 972-934-4212 or e-mail jgaskill@marketscout.com.

Workers’ Comp Programs Market Detail: Chamber Insurance Agency Services (www.chamberagent.com) makes it easier for agents to find workers’ compensation coverage for hard-to-place risks. This featured program provides access to coverage for accounts with high experience modification factors, multi-state operations and what are usually considered difficult risks.

Available Limits: As needed.

Carriers: Various carriers. Ratings not provided. Admitted.

States: All except where not allowed.

Contact: John P. Ferreira at 973-669-2309 or e-mail jpferreira@chamberagent.com.

offered for claims in connection with professional and pollution liability; 4) Coverage for independent contractors; 5) A worldwide coverage territory; 6) “Innocent insured” and mediation credit coverage offered; 7) The availability of an aggregate deductible endorsement; and 8) An available blanket waiver of subrogation.

Minimum premiums begin at $2,500 and deductibles begin at $2,500.

Available Limits: $500,000 to $10 million.

Carriers: Ace, Admiral, AIG, Beazley, CNA, Hiscox, Houston Casualty, Lloyds

rated by A.M. Best. Admitted and nonadmitted.

States: Ala., Ariz., Ark., Calif., Colo., Conn., Del., Fla., Ga., Idaho, Ill., Ind., Iowa, Kan., Ky., La., Mich., Minn., Miss., Mo., Mont., Neb., N.H., N.J., N.M., N.Y., N.C., N.D., Ohio, Okla., Ore., Pa., S.C., S.D., Tenn., Texas, Utah, Vt., Va., Wash., W. Va., Wis. and Wyo. Contact: Josh Hancock at 800-977-9884 or email underwriting@transportationrisk.com.

Bringing Market Seekers and Market Providers Together

Market Detail: Professional Program Insurance Brokerage (www.ppibcorp.com) offers professional liability coverage to interpreters and translators. Coverage is offered on a claims made basis and protects against claims alleging errors, omissions or negligent acts arising out of professional interpreting or translating services.

Coverage can be included for the applicant, applicants owned company, employees and contractors. The option to include general liability protection is also available.

Applications, quotes and purchase requests can all be done online. Minimum premium begins at $275.

Available Limits: $250,000 to $1 million.

Carriers: Lloyds of London. “A” rated by A.M. Best. Non-admitted.

States: All except Alaska and Mississippi.

Contact: Susan Preston at 415-475-4300 or e-mail susan@medispa-ins.com.

• Find markets in our database • Promote your markets on our site • Join our community forums • Membership is free! and Navigators. “A” rated by A.M. Best.

Admitted and non-admitted.

States: All. Contact: Robert J. McIntyre at 610-3373200 or e-mail rmcintyre@apogeeinsgroup.com.

Architects & Engineers Market Detail: Apogee Insurance Group, a Berkshire Hathaway Co. (www.apogeeins group.com) offers a broad architects and engineers program with the following coverage features: 1) Definition of professional service includes engineering, architecture, construction management and environmental consulting; 2) Offerings can include cyber liability, pollution liability and an option for first dollar defense; 3) Bodily injury and property damage coverage

Interpreters and Translators Professional Liability

Household Goods Truck Cargo

Mortgage Broker/Banker Professional Liability

Market Detail: Transportation Risk Underwriters Inc. (www.transportation risk.com) brings agents a cargo market for all household goods movers. Less than two years experience, no problem. Insureds can also get contingent auto liability, contingent cargo, and commercial general liability for brokers. Deductibles begin at $1,000.

Available Limits: $25,000 to $100,000.

Carriers: Multiple carriers. “A-” to “A+”

Market Detail: Gresham & Associates (www.greshaminc.com) has facilities for mortgage broker/banker professional liability which includes sub-prime loans and prior acts coverage. Investor required errors and omissions coverage is also available through a Special Mortgage Bankers Bond naming the investor as the loss payee.

Minimum premiums begin at $2,500.

Available Limits: $1 million to $5 million.

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Carriers: Unable to disclose. “A” rated by A.M. Best. Non-admitted.

States: All. Contact: Art Hays at 888-473-7444 or email ahays@greshaminc.com.

Fire Protection Contractors Market Detail: McNeil & Co. (www.mcneilandcompany.com) brings agents the FireWatch Program. This is a comprehensive insurance and risk management program offering high quality, specialty insurance products to the complete fire protection market including firms that engage in the sales, service, and installation of fire suppression systems, fire extinguishers, burglar and fire alarm systems, and those involved in selling or distributing fire equipment or emergency apparatus. The program can be tailored to provide an unequaled coverage portfolio.

Available Limits: As needed.

Carriers: Arch Insurance Co. “A” rated by A.M. Best. Admitted.

States: Alaska, Ariz., Ark., Calif., Colo., Conn., Del., Fla., Ga., Idaho, Ill., Ind., Iowa, Kan., Ky., La., Maine, Md., Mich., Minn., Miss., Mo., Mont., Neb., Nev., N.H., N.J., N.M., N.Y., N.C., N.D., Ohio, Okla., Ore., Pa., R.I., S.C., S.D., Tenn., Texas, Utah, Vt., Va., Wash., W. Va. and Wis. Contact: Shawn Yingling at 717-646-8886 or e-mail syingling@mcneilandcompany.com.

Medical Property Protection Market Detail: RPS of New York (www.rpsins.com) offers agents a property protection program designed specifically for the healthcare industry equipment. The medical diagnostic equipment coverage form is crafted to provide protection for: MRI’s, CAT scanners, X-ray equipment and

other portable diagnostic equipment.

Power units and specialized trailers part of mobile units can also be covered. Blanket limits of $250,000 are also available on items such as accounts receivable, EDP (including extra expense), extra expense, food spoilage and contamination, loss data preparation costs, personal property of patients and valuable papers and records.

Minimum premiums and deductibles begin at $5,000.

Available Limits: $1 million to $100 million.

Carriers: Unable to disclose. “A” rated by A.M. Best. Admitted.

States: All. Contact: Robert Hecht at 631-969-1900 or e-mail bob_hecht@rpsins.com. IJ Submit your company’s property/casualty markets to the industry’s leading searchable database at www.mynewmarkets.com.

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Special Report AAMGA Issue

‘Red Flags’ to Watch For When Choosing an MGA Partner in a Bad — and Good — Economy or Market

I

n today’s tough economy and proaround for a long time with a few differWhat should agents watch out for longed soft market, some insurance ent markets, then it’s generally one of the when questioning whether an MGA is firms are likely to get into stronger players,” he added. in good financial health or if they are financial trouble. Smaller Donoghue advises agencies to a good firm to partner with? wholesalers and managing always have backups to their priAre there ‘red flags’ to consider? general agencies (MGA) maybe mary markets, Kevin Donoghue: Not havat risk. Their ability to stay especially ing much experience in If they keep afloat with working capital when they are the business is a flag. It’s could be a challenge, says placing surswitching markets, very difficult for an agent Kevin Donoghue, managing plus lines to assess the financial sitit’s an indicator director for Mystic Capital business uation of an MGA or Advisors Group LLC, a New because “anyMGU because financials that they might York-based firm that provides thing can hapare not shared, just as an Kevin Donoghue not be the best financial consulting services to pen.” agency generally doesn’t the retail insurance, wholesale insurance In this interview share their financials. …

MGA to be doing and financial services industries. with Insurance Journal’s Check on references business with.

Andrea Wells, and experience. Checking If an MGA loses a market or loses key Donoghue outlines a with the markets they insurance lines, the fallout could make it few “red flags” agents should be aware of represent is always good due diligence, if difficult for those groups to stay in busiwhen trying to gauge the health of their they (agents) are not familiar with a cerness, Donoghue says. “But if it’s a sizeable MGA partners. Here’s what he had to say: wholesaler or MGA, or one that’s been continued on page N28

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Special Report AAMGA Issue

50 Reasons Why Retail Agents Choose Managing General Agency Partners In an Insurance Journal online survey, 304 independent agents wrote criteria on how they choose their MGA partners. Here’s what some of those agents had to say: 1. As a large broker, this is decided based on relationships, successes, volumes, commissions levels, service. In other words we are dictated by volume.

2. Service, service, service, markets, price, service.

3. Personal relationships.

4.Must know their products and give quick turnaround on quotes.

5. It’s very important to work with someone who will walk me through situations I may be unfamiliar with.

6. Basically we have two MGAs with relationships but will use others for exclusive specialty programs. Sometimes response time can be an issue as to who we write the business with.

7. If they have been in business a long time and have markets that we know are competitive and cutting edge, we give them a chance. If they do their job quickly and accurately, we continue to use them. If their underwriters are fickle and sometimes incoherent, we go elsewhere. We prefer to not swim upstream. Any difficulty in dealing with them is the quickest way for them to lose our interest.

8. What other agents say about the MGA and how they are treated and services offered.

9. Contract with known brokers. Specialty programs influence use. When known agents move, we will follow them to their new MGA.

18. Dedicated underwriters is crucial.

19. The more the MGA can automate their services including upload and download the more we would want to work with them.

20. Ease of submission. Sense that MGA understands nature of risk and will respond accordingly.

21. Financial ratings of companies used, expertise and knowledge of products/markets by brokers/assistants, ease of doing business with my CSRs after I have bound the business as the producer.

22. I like MGAs that are in the Midwest because that’s where my agency is. I feel that puts me in touch with an underwriter who may be feeling the same issues as my customers.

23. I consider those who can provide good service, quick response time and a good selection of companies.

24. Expertise and ease of doing business.

25. The three things all agents want: competitive markets, ease of doing business and the highest rate of commission possible.

40. Service, reputation and recommendation of other agents.

41. I only want to work with a couple. We receive tons of e-mail, mail and advertising, but I tend to stay with MGAs I have used in the past.

43. Met personnel at convention or conference, gained insight to their markets and experience. Tried and liked.

44. Print ads.

26. I choose them based on commitment to service, response time and access to markets.

27 We prefer to limit the number of E&S brokers and MGA/program adminstrators with whom we work; believing that carefully selected relationships will be more rewarding in the long term.

11. Their honesty, expertise, quickness, and quality of the carriers they offer. Their pleasantness in personality is also always preferred.

28. Experience and expertise are very important. They need to have good markets and they need to respond quickly.

12. I work with MGAs who respond quickly to our requests and try to earn our business by strong communication.

29. Most important to me is the ease to work with a particular MGA.

13. Reputation and how quickly they respond to inquiries along with market availability. Customer service has been decreasing over the years.

30. Here’s the priority list: 1) availablity of markets; 2) reliable response; 3) expertise; 4) price; 5) compensation. Everything else is a consideration, but not critical.

14. To place business that can’t be written in the standard market. Most of our MGAs have been around for many years. We only pursue new MGA relationships to gain a market for placement.

31. The relationship with a wholesaler/MGA is dependent on the carriers they represent as well as the responsiveness of their organization.

15. Continuing to place additional business with an MGA does depend on the relationships and service that are given.

32. We go to an MGA because we have a client with a need that our markets cannot handle.

16. Length of time in market. Reputation. Good reports from other agents that use them. Good working relationship with the underwriter staff.

33. Consistent quality level of service is most important.

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38. Three reasons: expertise, product or price.

39. I choose them via peer referrals. I stay with them according to the response time.

42. We select our wholesalers based upon their expertise, references and our employees’ past working experiences with a wholesaler or MGA.

10. Early response to my needs extremely important. In the future being able to quote online with MGAs will become more and more important.

17. Most important factors are the ability to have the most attractive markets for our clients, in conjunction with providing top level service and to believe that the number one priority is taking care of the client.

37. Recommendation of peers is very important and the input of company reps who pass along comments and/info from multiple sources.

34. Service, response time and and a competitive premium are a must.

35. Ease of doing business, service, and financing.

36. We discuss with similar agencies outside our marketing territory and also evaluate their market representation.

45. I work primarily with construction related accounts so even in the soft market it is important to work with brokers and MGAs who know the markets, have good relationships with the companies and understand the need for a timely response to all requests. Those that can do this will keep our business even when their price is slightly higher.

46. In my experience, over many years, wholesalers make a lot of promises in their ads that they will respond quickly to quote requests but for the most part they do not. Their underwriters are overwhelmed and do not respond to newly appointed producers. This is counterproductive and I don’t have time to deal with them. My quote requests die on their desks.

47. We work with the brokers who have expertise in a niche and expect quick response and results.

48. I look for a firm who has good relationships with their carriers and can provide expertise when it comes to questions regarding the quotes. I also look for a good response time for new business, renewals and for everyday service problems.

49. I appreciate brokers that take the time to help me understand the some of the peculiarities of a particular coverage form or company’s way of doing business.

50. Choice. Variety. Access. Today, the little guy can’t obtain many appointments by himself/herself. Agents must band together to meet quotas via MGAs. IJ

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Special Report AAMGA Issue Red Flags, continued from page N26

When a wholesaler or MGA is having tain MGA and they want to write with financial difficulties, what happens? Is them. … the department of insurance involved?

Ask for a company referral. Say XYZ Donoghue: A lot of times when they get in managing general agency underwrites on trouble they sell themselves. They try to get behalf of the Lexington. Don’t be hesitant out of trouble via sale. If there’s been a misto ask for a reference from Lexington.

If an agent is talking to an MGA and that appropriation of funds, then the insurance department would definitely be alerted to MGA tells them that they represent XYZ (carrier), a follow up question is, “How long it.

And then there’s just that gray area where have you represented them?” And if the they are not able to sell answer is a year or two, or they haven’t found the the agent should find out sale so they are kind of who they represented With the times, using fiduciary funds to before that and how long and the soft maroperate their business, they represented them.

And here’s the point, if ket, if you get into having yet been caught to playing the float. they represent a company financial hardships due So sometimes it’s difficult that they have only represented for a few years, there’s more pres- to know who’s in solid financial shape and who’s and did the same previsure to do somenot. ous to that, it’s a bad business practice because thing that is probaGiven the current they are probably burnbly inappropriate. financial crisis and ing markets. That’s a soft market, and huge red flag. heightened pressure to increase revWe look at that when we look at the enues, is it more likely for someone to value of an MGA. If they keep switching be dishonest now than in the past? markets, it’s an indicator that they might Donoghue: I don’t know that it’s more likely not be the best MGA to be doing business for someone to be dishonest if they weren’t with. It certainly begs the question, “Why dishonest to begin with. It’s almost like are you changing markets?” “what cloth are you cut out of?” With the times, and the soft market, if you get into Any examples of failed companies you financial hardships there’s more pressure to can share? do something that is probably inappropriate.

Donoghue: None that have been made public But for the most part, in insurance, you are but we work with some that have been in still dealing with the 90 percent plus that trouble and they needed to secure financare honest folks but there’s 10 percent out ing, working capital to stay afloat. None there that give the rest a bad name. that have gone out of business, but in the past we have seen situations where you If an MGA or even a retail agency is have unscrupulous individuals that misaphaving financial difficulty, what propriate funds, on both the retail side and chance do the owners have of securing the MGA side. capital to help given today’s credit It’s always important to do your due dilimarkets? gence on a group before starting to write Donoghue: Well there are good operations out with them. It’s always good to know that there that lend. So to the extent that they your client, your insured, is actually in are in trust and they have solid business place with the insurance company. The practices and they just need working capiMGA may have been paid but you always tal, there’s potential that they can get there. want to make sure that that payment was If they need money tomorrow, they are remitted on to the company and your poligoing to have a difficult time finding it. cy is in force.

But if they are looking ahead and saying “I N28 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009

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might need a working capital loan in 90 days” and plan ahead, I think some of the banks out there, InsurBanc being one of them, could try to see if they could bridge the gap.

On the retail side, another bank out there, Westfield Bank in Ohio, lends to agencies. There are groups out there that will lend to an agency that will make it a little easier than going through a traditional banking facility.

But for the most part, as long as the agent verifies that the underlying insurance is in place and it’s with a credible company, the agent should be in good shape. They have done their job. They have maintained the confidence of their client to the extent that there is an intermediary that went

under during the course of business.

To the extent that agents don’t do due diligence, and they haphazardly place risk with groups that they are unfamiliar with, then they would have exposure. … It’s always important to do some background on the owners and their experience. IJ

Are you seeing an uptick of firms looking for capital these days?

Donoghue: Yes, in the last couple of years I think there’s been somewhat of an uptick just because revenues are soft and people haven’t maybe downsized their staff appropriately. But lately there seems to be less softening going on. If anything it seems to be bottoming out so that could be helpful.

So to the extent that they have right-sized themselves right now they might benefit from an uptick in pricing.

If an MGA did go under, closed its doors, or was selling, how should the clients be handled? Would the MGA look for another firm to buy the book?

Donoghue: Ideally they would. So to the extent that they have the ability to sell, they are not financially impaired to where a sale price would be less than the debt they are in, they can generally find an avenue to sell and maybe make some money on it.

If an MGA goes under, it’s not necessarily the end of the world as long as that underlying insurance has been placed with a company. You know, it’s when they went under and didn’t place the coverage (that’s a problem). For the most part, the underlying insured shouldn’t be at risk if the policy was placed and underwritten properly.

If the MGA fails the policy is still in force.

If an MGA were to fail, how might the end customer view the retail agent who placed the account?

Donoghue: I think anytime you have a change in a market, the underlying insured is going to wonder why, so it could look bad on the agent. www.insurancejournal.com

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W

elcome to Insurance Journal’s 2009 Premium Finance Directory, a comprehensive listing of premium finance companies able to assist agents and brokers with their clients’ financing needs.

All company information listed in this directory was directly submitted to Insurance Journal. To be listed in future editions of Insurance Journal’s Premium Finance Directory, or any other directory, contact Kristine Honey at: khoney@insurancejournal.com.

We hope you find this directory to be a valuable resource when searching for financing options for your clients. Feel free to send us comments and suggestions on how we might improve this directory, or for additional help, e-mail: editorial@insurancejournal.com.

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750 N St. Paul, Ste. 1500, Dallas, TX 75201 Phone: (800) 299-5626, Fax: (214) 954-0537 Email: service@afsibex.com www.afsibex.com

534 Broad Hollow Rd., Melville, NY 11747 Phone: (631) 777-1377, Fax: (631) 777-1388 Email: info@allislandcredit.com www.allislandcredit.com

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AFCO 310 Grant St., Ste. 1600, Pittsburgh, PA 15219 Phone: (412) 402-3853, Fax: (412) 402-3048 Email: promptservice@afco.com www.afco.com ; www.cafo.com · Cananwill has joined forces with AFCO to create one strong team · We offer Expertise, Capacity, Flexibility in premium financing across North America · Currently, Chapter 11 financing offers great value-added to your clients

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N30 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009

Aviation Premium Finance, LLC P.O. Box 18067, Kansas City, MO 64133 Phone: (877) 353-1047, Fax: (816) 353-1048 Email: kw@aviationpremiumfinance.com www.aviationpremiumfinance.com · APF provides aviation insurance buyers with payment options for their annual insurance premiums. · Customers traditionally put 20% down and then make 9 monthly payments. · Our goal is to make aviation affordable for everyone!

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Premium Finance Directory Birch Financial, Inc.

COST Financial Group, Inc.

20946 Devonshire St., Ste. 200 Chatsworth, CA 91311 Phone: (818) 772-4244, Fax: (818) 772-2221 Email: info@birchfinancial.net www.birchfinancial.net

784 Wall St., Ste. 110, O’Fallon, IL 62269 Phone: (800) 844-2678, Fax: (618) 206-3223 Email: daveg@costfinancial.com www.costfinancial.com

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Budget Installment Corp (BIC) A Webster Bank Company 1050 Franklin Ave., Garden City, NY 11530 Phone: (800) 557-3000, Fax: (877) 678-2235 Email: ahanes@bicfinance.com www.bicfinance.com

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Cypress Premium Funding, Inc. 30448 Rancho Viejo Rd., Ste. 100, San Juan Capistrano, CA 92675 Phone: (949) 487-0602, Fax: (949) 487-0640 Email: info@cypressfunding.com www.cypressfunding.com

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Capital Premium Financing 12235 S 800 E, Draper, UT 84020 Phone: (800) 767-0705, Fax: (800) 700-3170 Email: info@capitalpremium.net www.capitalpremium.net · Industry leading Agency Revenue Programs · Highest level of Agent/Client service available in the industry · Local presence, multiple payment options, and online access

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gotoPremiumFinance.com 21820 Burbank Blvd., Ste. 300 Woodland Hills, CA 91367 Phone: (888) 875-4000, Fax: (818) 610-2066 Email: information@gotopremiumfinance.com www.gotopremiumfinance.com · Nationwide premium finance provider for agents, MGAs & insurance companies. · Online quoting, e-submission of finance agreements, online payment options, real time account status, scheduled reporting, customized notice delivery & more. · Highly attractive producer compensation programs are available in fee legal states.

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Premium Finance Directory IUI Premium Financing, Inc.

Imperial A.I. Credit Companies 101 Hudson St., 33rd Fl, Jersey City, NJ 07302 Phone: (877) 902-4242, Fax: (201) 631-5484 Email: marketing@iaicc.net www.iaicc.com · Financing programs customized for the specific needs of your insured. · Branch offices distributed throughout the U.S. & Puerto Rico to provide local, efficient service. · Web based account access, quoting and contract submission. Integration with a wide variety of agency management software. · Partnership that goes way beyond the numbers.

27970 Crown Lake Blvd., Ste. 3 Bonita Springs, FL 34135 Phone: (727) 864-0816, Fax: (727) 867-7087 Email: TCulley1@tampabay.rr.com www.IUIPremiumFinancing.com · Financing Commercial Insurance: Trucking, Property, E&O, etc. · No Waiting for Quotes (instant quotes/contracts) · Competitive Rates: Can meet or beat with commissions available

LG Premium Finance

Imperial Finance & Trading, LLC

Life Endeavors Financial Solutions, LLC

701 Park of Commerce Blvd., Ste. 301 Boca Raton, FL 33487 Phone: (866) 664-9303, Fax: (561) 995-4201 Email: info@imprl.com • dbenaim@imprl.com www.imprl.com

6430 Rockledge Dr., Ste. 500 Bethesda, MD 20817 Phone: (301) 803-7553, Fax: (301) 803-7570 Email: konstantin.zvereff@lefinance.com www.lefinace.com

· The premier provider of premium financing in the U.S. · Explore financial strategies to create wealth without using money set aside for retirement · Visit Imperial on the Web at www.imprl.com

· Life Insurance Premium Finance Program Administrator · Perfect for Estate Planning and Wealth Management · Designed as a financial Planning tool; low loan origination fee, low interest rates and no prepayment penalty

P.O. Box 315, Des Moines, IA 50306-1315 Phone: (800) 247-4190, Fax: (515) 223-0226 Email: Brian@ifcorp.biz www.ifcorp.biz · Completely independent, IFC has no ties to insurance companies, agencies or other financial institutions. · The agent has the option to control any and all cancellations and reinstatements of policies financed. · Every agent is assigned its own personal account rep and when you call IFC during normal business hours you’ll always talk to a real person, not an automated attendant.

8530 La Mesa Blvd., Ste. 208 La Mesa, CA 91941 Phone: (888) 280-0235, Fax: (619) 697-0326 Email: info@financepremium.com www.financepremium.com · We look for ways to say “yes” to financing any commercial account. · Aggressive Cancellation Prevention Program with ALL forms of payment accepted. · Premium Finance Licensing and Third Party Administration available (www.pfcaptive.com).

16438 Vanowen St, Ste 205, Van Nuys, CA 91406 Phone: (800) 452-8505, Fax: (800) 209-0120 Email: info@lgpf.net www.lgpf.net · Better retention & servicing of insured resulting in lower cancellation rates · Productivity gains related to streamlined quotation & activation of financing agreements · Superior client services for the agency

Insurance Finance Corp.

Mountain West Premium Finance Group of Companies

Monarch Premium Resources, Inc. 30448 Rancho Viejo Rd., Ste. 100 San Juan Capistrano, CA 92675 Phone: (800) 731-7890 Email: info@MonarchPremium.com www.monarchpremium.com · Exclusive financing arrangements for brokers of Monarch E&S · Interactive Web site for account viewing, reports and On-line payments · Financing Commercial and Personal Lines Insurance Premiums

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NCMIC Finance Corporation 14001 University Ave., Clive, IA 50325 Phone: 1-(800) 600-9250, Fax: 1-(800) 630-9250 Email: rmiller@ncmic.com www.nfcfinance.com · Custom solutions – even for smaller insureds or niche markets. · Flexible plans that can include reduced down payments and extended terms. · State-of-the-art software, immediate funding and web-based account management.

Prem Finance 1230 B.12th St., Far Rockaway, NY 11691 Phone: (718) 301-5940, Fax: (718) 301-5940 Email: lifepremium@gmail.com www.premfinance.com · High commissions for agents and brokers · Completely legal · Backed by a State Charter Bank

Premium Assignment Corporation 3522 Thomasville Rd., Ste. 400 Tallahassee, FL 32309 Phone: (800) 342-0991, Fax: (800) 286-8999 Email: marketing@premiumassignment.com www.premiumassignment.com · Premium Financing Made Easy · Superior Service · Competitive Rates

www.insurancejournal.com

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Premium Finance Directory

Premium Finance Associates 7603 First Place Dr., B-12, Cleveland, OH 44146 Phone: (866) FRIEND-0 (374-3630) Fax: (866) 839-3090 Email: info@PremFinAssociates.com www.PremiumFinanceAssociates.com

Premium Payment Plan

SIUPREM, Inc.

One Hudson City Centre, Hudson, NY 12534 Phone: (800) 677-3648, Fax: (518) 828-5729 Email: info@prempay.com www.prempay.com

P.O. Box 105611, Atlanta, GA 30348 Phone: 1 (800) 925-2546, Fax: (678) 498-4747 Email: info@siuprem.com www.siuprem.com

· Commercial and Personal Insurance product lines including Assigned Risk · Customizable program support to meet your agency needs · Full service website allowing for quoting, payment and account view 24/7/365

· Independently owned, full service online premium finance company servicing independent agents for over 40 years. · Industry leading technologies providing real-time data for online policy service by the insured or the agent. · Call or visit us online to learn more about the many more benefits SIUPREM can offer.

· Licensed in all 50 states · 24/7 Access to Online Quoting and Viewing system – same day payment posting · Automatic ACH monthly installment withdrawal from insured checking or savings account

Prime Rate Premium Finance Corp.

Premium Finance Brokerage, LLC

· Financing Commercial & Personal Lines Nationwide · 24/7 Web based access · Pre-approval of loans up to $100,000 & no minimum premium.

2012 S Tollgate Rd., Ste. 204, Bel Air, MD 21015 Phone: (866) 381-6501, Fax: (866) 381-6502 Email: tlarsen@premiumfinancebrokerage.com www.premiumfinancebrokerage.com

2141 Enterprise Dr., Florence, SC 29501 Phone: (866) 669-0937, Fax: (800) 677-9850 Email: info@primeratepfc.com www.primeratepfc.com

· Guaranteed Lowest Interest Rates · Access to several national premium finance companies through one point of contact · Flexible payment options, cutting edge technology and a service pledge that’s put in writing P.O. Box 817099, Hollywood, FL 33081 Phone: (800) 491-8937, Fax: (866) 632-9776 Email: marketing@pro-premium.com www.pro-premium.com

Premium Financing Specialists

· Premium Simplicity; most premium finance quotes available within minutes with no financial information required. · Premium Security; we offer national expertise, without compromising the local service you value (PFS has over twenty full service branch offices). · Premium Access; our comprehensive website allows you to access accurate information whenever you need it, but a friendly representative is always just a phone call away.

www.insurancejournal.com

21535 Hawthorne Blvd., Ste. 275 Torrance, CA 90503 Phone: (800) 393-2012, Fax: (888) 328-6747 Email: contact@sbac-finance.com www.sbac-finance.com · Interactive and user-friendly state of the art website · Producer compensation up to 3% · Flexibility to meet all your financing needs!

Specialty Risk Premium Finance

Pro Premium Finance Co., Inc.

427 W 12th St., Ste. 100, Kansas City, MO 64105 Phone: (800) 838-2350, Fax: (816) 627-0502 Email: jen.newhouse@premiumfinance.com www.premiumfinance.com

South Bay Acceptance Corp.

· Achieving excellence in the premium finance industry · Interactive web application providing turnkey agency management system · Competitive agent marketing incentives with flexible rate structures

Royal Premium Budget, Inc. 30833 Northwestern Hwy, Ste. 220 Farmington Hills, MI 48334 Phone: (800) 477-7889, Fax: (248) 932-9043 Email: financing@royalpremium.com www.royalpremium.com · Online Payments & Account Status – make payments or review insureds' accounts, including payment history, 24/7. · Same-day turnaround on finance quote requests and quote revisions. · Online Quotes system gives agents the option of producing finance quotes and finance contracts anytime.

7600 Fern Ave., Bldg. 600 Shreveport, LA 71105 Phone: (318) 683-6206, Fax: (318) 683-3846 Email: frances.lee@specialty-risk.com www.specialty-risk.com · 1st Class Service with in house finance through Specialty Risk Associates! · In house finance allows for immediate credit to your broker statement · 24 hour “real time” account access for you and your clients

Standard Funding Corp 335 Crossways Park Dr. Woodbury, NY 11797 Phone: (800) 526-2470, Fax: (800) 203-2547 Email: info@standardfunding.com www.standardfunding.com · Fully automated web-based online services · Personalized customer service & experienced field representatives nationwide · Competitive rates & loan structures

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Premium Finance Directory Tepco Premium Finance 1333 S Rustle Rd., Spokane, WA 99224 Phone: (800) 571-0843, Fax: (509) 622-4702 Email: info@tepcofinance.com www.tepcofinance.com · Easy to use online system for quoting & account management · Free online payments · Licensed in 9 western states

TWG Capital 6666 E 75th St., Ste. 500, Indianapolis, IN 46250 Phone: (877) TWG-CPTL (894-2785), Fax: (317) 813-1701 Email: sales@twgcapital.com www.TWGcapital.com · Trusted by agents as leading financial solutions provider for 10 years · Providing capital to P&C Agents · Free valuations & customized business solutions

US Premium Finance 1255 Lakes Pkwy, Bldg 200, Ste. 201 Lawrenceville, GA 30043 Phone: 1 (866) 246-9691, Fax: 1 (866) 246-9692 Email: customerservice@uspremiumfinance.com www.USPremiumFinance.com · SERVICE: Creatively Structured Premium Finance Loans. · TECHNOLOGY: User-friendly software, easy access to your customer database any where in the world 24/7. · PRICING / RATES: Flexible, Fair Market Pricing.

UPAC Premium Finance 8245 Nieman Rd., Ste. 100, Lenexa, KS 66214 Phone: (800) 877-7848, Fax: (913) 984-4988 Email: marketing@upac.com www.upac.com · Financing insurance premiums since 1954 nationwide. · Industry-leading web site offering unlimited flexibility and options that will save you time AND money. · Paperless e-commerce, reduced cancels, flexible payment options, endorsements in a just matter of seconds and total account management are just some of the benefits you will enjoy. · Agency management system integration for seamless financing. · 10 - Ways for your insureds to pay. · Old-Fashioned Service with Leading-Edge Technology provides you with the one-stop, effortless financing you can count on.

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BE HERE...

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Insurance Journal webcasts allow you to interact with the experts in real time.

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Check out the next webcast TransUnion presents: Protecting Your Portfolio Against Foreclosure and Vacancy-Related Claims Date: May 5, 2009 Time: 10:00AM PT / 1:00PM ET Register at: www.insurancejournal.com/webcasts Are you interested in having your own webcast or custom video? Give us a call: 800-897-9965 ext. 148

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Idea Exchange Closing Quote

Being Prepared Don’t Lose Sight of the Greater Risks We Face

By Richard Ward

N

o one could fail to have noticed that we are in the grip of a recession. With unemployment affecting 2 million in the United Kingdom, interest rates almost at zero and a deflationary environment, there is a lot for businesses to deal with.

While the financial crisis has certainly been front-of-mind for many around the world, it would be disastrous for us to lose sight of the greater risks that we face, particularly as insurers.

This has been recognized at the highest level during the recent G20 meeting in London when the communiqué agreed by all of the world leaders reaffirmed their commitment to address the threat of climate change.

As our understanding of climate change and its impact develops, it is clear that it will have major implications, not only on our environment but also on how our societies and economies operate in the future.

Indeed, it is likely climate change will pose a threat to the future security of the world.

For example, we could see a time when because of changes in our climate, nations cease fighting over ideology and instead compete for control of natural resources. As a result, the world map could be significantly redrawn as borders are decided on the availability of food, water and oil. Whereas prospectors left their homes centuries ago to search for gold and land, water shortages could force mass migration on a previously unseen scale. Nations could be held to ransom as energy pipelines become crucial bargaining tools in world politics and finally the exotic foods that we have all come to know and love could become a thing of the past.

Climate Change and Security Our new report on Climate Change and Security, produced in conjunction with the International Institute for Strategic Studies, examines how climate change will affect global security by exploring four key interrelated issues —

N36 | INSURANCE JOURNAL-NATIONAL REGION May 4, 2009

Ward

water scarcity, food supply, energy security and demographic pressures. To read more, visit our Web site at www.lloyds.com/360.

We are also investing in research to better understand the current threat of political risk. The recession is likely to lead to greater instability across the world — the increased incidences of piracy are just one recent manifestation of this.

Incidences of piracy in the Gulf of Aden and off the coast of Africa have been increasing since 2005, but the number and scale of recent attacks is a real cause for concern. To set things in context, since June 2007 there have been more than 200 reported acts of marine piracy there and 30 percent of Europe’s oil goes through this route.

We are also likely to see a rise in businesses and their executive being targets from threat groups, terrorists and disgruntled populations following the financial and economic turmoil we are witnessing — which could long outlast the recession. We will be exploring this in more detail in a report in June.

Blame Culture It’s not just changing weather and violent actions that the world seems to be facing more of, but a blame culture that, in this current financial environment, may spiral out of control. Boards now spend 13 percent of their time discussing litigation, and most companies believe that stakeholders outside the United States are now more willing to litigate generally.

Globally, actions brought by employees and customers are the most frequent, but actions from shareholders, regulatory authorities and special interest groups will grow as people take stock of the subprime and credit crunch crises.

Added to this, there is a perception that U.S. courts are becoming more willing to rule on cases that might have once been considered extraterritorial. Concerns about liability risk — whether real or perceived — are constraining entrepreneurship in business at a time when we need the best and brightest to stand up.

But it’s not all doom and gloom. Risk is not a dirty word.

The insurance industry deals within it every single day and we have made it our business. We manage many risks — big and small; immediate and long term; simple and complex — but the most important thing is, when managing these, we don’t forget the others. IJ Ward joined Lloyd’s as CEO in April 2006. www.insurancejournal.com

Joe Santini, Master Mechanic.

Keeps classic cars running smoothly.

Relies on Applied Underwriters to help run his business the same way. ®

Business owners shouldn’t have to be experts in everything. Applied Underwriters gives them tools to focus on what they know best: their business. With products like SolutionOne® that integrate casualty coverages with payroll processing and risk reduction services. Our superior customer service and Best’s Rating of A (Excellent) have earned us a client retention rate of over 90%. For more information call (877) 234-4450 or visit www.applieduw.com.

©2007 Applied Underwriters, Inc. A Berkshire Hathaway Company.