National Underwriter - April 18 2011

BLISS & GLENNON
PROGRAM: Insureyourwine.com

SELLING POINT FOR CARRIERS: “You don’t need to be worried about a moral hazard,” says program creator Tony Morgan. “People who buy wine insurance take a lot of pride in their collections”—putting in all the loss-control protections they need, such as proper cooling systems. OTHER PROGRAMS: Mall Kiosks; Mobile-Home Transporters

COMMON THEME: Managing Director Bob Abramson says the focus is on providing better coverage because “we specialize” in a class. “We know more about it than the guy next door—it’s not just having a package that’s cheaper than anyone else’s on the street.”

V3 INSURANCE PARTNERS PROGRAM: Miscellaneous professional E&O SELLING POINT FOR CARRIERS: “Smaller accounts can make money in hard and soft markets,” says CEO Susan Rivera, noting that target insureds are consultants with average premium sizes of $2,500—below most minimums of other E&O programs. “There are also not many miscellaneous professional MGAs out there,” she says, noting that others focus on real estate or insurance agents, for example. OTHER PROGRAMS: Calif. DIC, workers’ comp written over the Internet, rural used car dealers COMMON THEME: Small accounts offering less volatility and better profitability in hard and soft markets.

SEAFIRE INSURANCE SERVICES

PROGRAM: Franchised auto dealers SELLING POINT FOR CARRIERS: “We’re really looking for agents who have skill, brand and expertise and are willing to commit a significant amount of controlled business,” says President Dennis Kane.

OTHER PROGRAMS: Independent auto dealers, franchised recreational-vehicle dealers, franchised motorcycle dealers, collision-repair facilities, mechanical-repair facilities COMMON THEME: Leveraging the 57 years of collective underwriting experience of SeaFire principals in the automotive space.

NEW PROGRAM NICHES

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ing SeaFire to leverage existing infrastructure.

“We didn’t have to go out and spend $1 million on IT investment. We didn’t have to hire a CFO. We could bolt onto their platform,” he says.

Farber and Treanor, with deep relationships in the industry, introduced SeaFire entrepreneurs to at least 10 potential carrier partners. Even without historical data to demonstrate profitability, they used their expertise to understand the unique risks of auto dealers—like open-lot exposure to weather-related claims— as a selling point to entice the carriers.

Another valuable talking point is the use of a limited-appointment distribution that stresses expertise as well. “We’re really looking for agents who have skill, brand and expertise and are willing to commit a significant amount of controlled business,” Kane says.

Carrier interest was high, and only two of 10 didn’t want to move forward with backing the management team. “The selection criteria for us then became time to market, systems, economics and channel conflicts,” he says, reporting that Chubb ultimately signed onto the deal as the primary carrier.

At V3, Rivera says the DIC program was the biggest struggle in terms of getting carrier support. “It always takes a longer time to get catastrophe capacity, especially as an MGA,” she says.

For all four niches she works with, she says
she did some extra upfront work the summer
before V3 actually started hiring to ensure
ultimate carrier buy-in. “I probably visited 30-
40 company executives to validate my niches
before I actually built them,” she says. NU
Earthquake Demand Heats Up

BY SUSANNE SCLAFANE

DEMAND FOR earthquake coverage is heating up on the West Coast, according to two managing general underwriters offering coverage for commercial and residential properties.

“We might need some more underwriters,” says Susan Rivera, president & CEO of V3 Insurance Partners, which launched its V3Antage EQ+ difference-in-conditions program three weeks ago.

“We have over 800 submissions” for the
program, which targets small commercial
businesses with primary exposures in Cali-
fornia, Rivera says. “We are seeing a lot of
first-time buyers.”
Tony Morgan, a senior vice president
for Bliss & Glennon, a Redondo Beach,
Calif.-based wholesale brokerage and
MGA, also reports growing interest in his
firm’s 10-year old residential and commer-
cial programs for Oregon and Washington
since the earthquake and tsunami in Japan.

In addition to the interest in his firm’s Oregon and Washington specialty programs, Morgan says he’s seen a big jump in applications for risks outside the boundaries of the two Northwest programs—for nonprogram risks in California individually written on the wholesale side.

“We see a lot of people who typically
would not buy earthquake insurance now
buying it. It’s across the board” for all three
West Coast states, he says, noting that
concerns about tsunami threats are also
behind the surge of applications. “Typi-
cally, tsunamis are covered under the flood
portion of the policy,” he says.

DIY ADVANTAGE

Bliss & Glennon offers what Morgan refers to as self-rater programs for residences in Oregon and Washington, allowing brokers to answer a few easy questions and fill out a short application by e-mail or fax to bind coverage.

“We knew that there was a good market for quake in Washington and Oregon. We also knew insurance companies had a lot of capacity for those two states. Because they had so much capacity, they were much more open to the idea of finding a different vehicle, like a program, to use that capacity,” he says.

Referring to the residential product for Oregon and Washington, Morgan says total insured values (TIV) could be as high as high as $2.5 million. Premiums start at $400.

“Basically, if it’s built after 1950 and it’s not on bay mud, and the TIV’s not more than $2.5 million, you have coverage,” he says, noting that total premium volume for the program, written on London paper, is roughly $300,000.