GETTING PAST GO: DATA, EXPERIENCE KEY
Even MGAs with less novel ideas for turning collections of insureds into brand-new programs meet with carrier resistance,
other market participants say.
“One of our big challenges was we didn’t
have any data,” says Dennis Kane, president of Overland Park, Kan.-based SeaFire
Insurance Services, an MGU launched in
March with programs tailored to the insurance needs of auto dealers and repair shops.
“It’s hard to go to a carrier and ask them for
the underwriting pen without data.”
“We spent hours evaluating industry workers’ comp
data” for the Internet-comp
program. “We put together
the policy form. We had
the underwriting guidelines. We had the applications all complete.”
So how does a great program idea get
turned into a business reality?
Working to offset the no-data disadvantage is the combined expertise of Kane
and two other principals, who collectively
have 57 years of sales and underwriting
experience in the business, he says, noting
that the trio all hail from Zurich North
America’s Universal Underwriters Group,
which has a history in insuring automobile
dealerships dating back to 1922.
Rivera says the timing
of her well-documented and
passionately presented proposals—during a soft market—also
worked to the MGA’s advantage. “If
an insurance company really wants to get
into the niche you’re talking about, they’re
happy to have you take on the risk,” she
says, referring to the risk of pouring money
into people, technology and infrastructure.
During a soft market, “they’re not investing” in any of those things.
THE PARTNERSHIP APPROACH
Kane says SeaFire has the advantage of
support from Preferred Concepts, a privately
held national program administrator set
up in 1989, now backed by
private-equity investment from Stone Point
Capital. He reports that a conversation with
Preferred Concepts’ principals Stuart Farber
and Chris Treanor about “best practices for
program administrators” turned into an offer
to join the Preferred Concepts family, allow-
continued on page 18
Like Kane, Susan Rivera, president and
CEO of V3 Insurance Partners, has staffed
her Philadelphia-based MGA with veterans
from the carrier side, also launching an
auto-dealers program (for small used-car
dealers in rural locations), as well as small-account programs for miscellaneous professional liability, California earthquake/
difference-in-conditions (DIC) and workers’
compensation written over the Internet.
MGA Profile: Bliss & Glennon’s Bob Abramson
“The carriers would tell me right out, ‘We
don’t like startups,’” says Rivera, recalling initial meetings over program ideas that had all
been successfully done by carriers she worked
with before. “That is their general feeling
because it is taking a chance,” she says, going
on to explain that V3 has gotten past objections since launching in 2008 by doing a lot
of homework to validate the opportunities in
submissions to potential carrier partners.
BOB ABRAMSON, a managing direc- miserably,” he says. “A 50 percent loss
tor at Bliss & Glennon, recalls that ratio at half the price makes 100 percent.
his first specialty-insurance program It doesn’t take a genius to figure that out.”
idea—a package of coverages for alarm in- Among its current specialty programs,
stallers—was the outgrowth of his Bliss & Glennon manages a pro-
prior job as a salesman for Security gram for transporters of mobile
World magazine. homes in Texas and a nationwide
Moving to the insurance indus- program for mall kiosks.
try in 1984, he explored the pack- Does Abramson worry that the
age-program idea and found there kiosk program might suffer the same
wasn’t a lot of competition. “We fate as the alarm program? “The pre-
went after the class vigorously,” he miums are so low that it would be
says, reporting that the program strange for a carrier say, ‘Oh yeah, I
“had a good run,” with the endorsement want to go out and write $39 policies,’” he says.
of an alarm- installer’s association coming In spite of the low premium dollars
along the way. collected for each individual risk, the pro-
“Where we could, we pulled and analyzed
competitor rate filings. We pulled [Insurance
Services Office] data, so we could look at the
loss experience” on the proposed portfolio.
“We managed to write $5 million at a gram has the potential to deliver $2 million
very good loss ratio—about 50—[until] a in overall volume to the current carrier,
competitor decided to take our program Diamond State, a unit of United America
over at half the price in 1998. They failed Indemnity, he says. NU