structure is also an edge, execs contend
“These are companies that are built for
the long haul because they can think long-term as opposed to quarter-by-quarter,”
Additionally, leadership at these smaller
“Our focus is on policyholders,” says
Parrillo. “We have no other motives—no
one else to answer to.”
Shareholders of stock-structured
companies may not be so aligned with
the insured, executives at smaller
carriers say, adding that many of
those shareholders likely aren’t even
policyholders with the company in
which they hold stock.
shorter duration in their positions, you
tend to develop short-term strategies,”
Strong reinsurance partners are critical
elements of small/regional insurers’ success.
For instance, Hochheim Prairie
was able to recoup $48 million of
its $161 million in insured losses in
2011 via reinsurance treaties. About
$40 million of losses Germania took
from the Bastrop fire were absorbed
by its catastrophe program.
And tight relationships with
independent agents are also standard
parts of the game plan for successful
“Independent agents are the best way
for our clients to buy insurance,” says
Kennedy at Ohio Mutual. “They know the
area and what we are looking for and can
explain the policy to an insured.”
Every claim we took this year
was a chance to show we have the
resources to compete with the big
guys. People have to believe we’re
as good as anyone. It’s the best
James J. Kennedy, President/CEO, Ohio Mutual
insurers is typically well-tenured.
“They have seen the heavy catastrophe
cycles and been through the hard- and soft-
market cycles,” adds Chamness. “They’ve
seen it all, and they don’t overreact.”
“When those in the C-suite have a
What Do Agents Think of Smaller Carriers?
ONE RECENT survey by the National Association of Professional Insurance Agents (PIA) reveals what agents really think of small/regional insurers.
Nine out of the 10 top-performing carriers
in the state of New York are regionals. In
Connecticut, six of the top 10 performers are
regionals. And while agents recognize the
difficulties smaller carriers may have faced in
a cat-filled 2011, they aren’t about to change
their mostly high opinions.
“Why would my confidence waver?”
asks James Berliner, principal and owner
of Berliner-Gelfand in Bridgeport, Conn.
“Smaller companies as a whole are healthy,
with strong combined ratios in many cases.”
Agents like the personalized, nimble
service a smaller company can provide.
Small and regional carriers “seem to care
and put the effort in, making sure they know
who their customer is and not forgetting
about them,” says Richard Savino, principal
of Warwick Resource Group in New York.
“They want to hear agent feedback, and they
stay attuned to their needs.”
“They are committed to us as partners,”
Berliner adds. NU
Top 10 Performers – New York
*Ratings based on 20 performance items. Total available points: 200
COMPAN Y RATING
Kingstone Insurance Co. 166.6
New York Central Mutual 165.1
Merchants Mutual-commercial 164.4
Preferred Mutual 162.9
Narragansett Bay 159.9
Utica National-personal 159.9
Merchants Mutual-personal 159.4
HARD LESSONS LEARNED
While 2011’s catastrophes may have provided
the chance to showcase the claims-handling
skills of small/regional carriers, the year also,
of course, delivered plenty of hard lessons.
Ehlert says Germania hadn’t budgeted for
the type of destruction caused by the Bastrop
Fire. Going forward, the company will be
more conscious of brush and vegetative
overgrowth on its properties, he says.
Homes with metal roofs fared much
better in the fire, Hochheim Prairie found.
The insurer discovered the discounts it
offers these homes are indeed valid.
Parrillo says the frequency and
severity of claims in 2011 has allowed
the company to assess itself from an
operational perspective. How quickly were
representatives able to get into the field?
How well did the independent claims-adjustment firm handle its tasks?
“If you don’t use last year to learn, you’re
missing a great opportunity to grow,” she says.
Interestingly, despite the losses they
endured in 2011, many small or regional
March 19/26, 2012 | National Underwriter Property & Casualty | 15