“Specialty Insurance In A Soft Market” – 2006 Peak Performance Insurance Ski Conference

Snuggle amidst the snow-capped peaks surrounding Colorado’s Vail Mountain Resort, a choice group of insurance professionals gathered from January 25th through January 28th to develop the strategy and means to generate higher profits, greater income and new available markets/programs. 

The annual Peak Performance Conference has proven itself to be one of the industry’s most unique networking events due to the intimate atmosphere and limited attendance level.  The hotel at which the conference was held  sold out in early January with a total of 90 registrants and ten having to cancel before the maximum cutoff of 100-attendees.  The delegation was made up of reinsurance carriers, reinsurance intermediaries, PEOs, Third Party Administrators, insurance carriers, national brokers, retail agencies and venders.  It was truly represented by every player in the property casualty industry.

Rick Gulliver, President, Hub International, Ltd. shared a "State of the Industry Opening".  His comments from a number of 852,000 employees that are working in the property casualty industry.  He also made mention that a 34% increase from 2005 with an astonishing 47,000 million internet users. The largest market is made up of the baby boomers 27%. Also 79% of commercial lines business is managed by independent agents and brokers.  We need to consider our approach and way we all market our services and products in the future.

Despite the self-limited number of participants, the Peak Performance Conference boasts a powerhouse agenda, with companies such as the St. Paul/Travelers, AIG Programs (Lexington), Hub International, Zurich, Beazley (Lloyds) and AMTRUST on hand to promote new business opportunities amongst the high-caliber agency attendees.  In addition names such as NSM Insurance Group, Thomco, Brooke Corporation, CRC, AVRECO and Staff Brokers Inc. sponsored and presented to assist our retail delegates in distribution and marketing of unique programs.

Innovative sales and marketing techniques are covered in panel discussions sponsored by National Marketing Services. Plus, representatives of programBusiness.com, AMS-Rackley and Acord participated to offer technology solutions for the progressive agencies, wholesalers and program administrators. 

The 3 1/2 day agenda brings together a panel of industry honchos, moderated by National Marketing president Larry Neilson, on "Specialty Insurance In A Soft Market."  The panel, which includes Pete Purvis, VP Multiline Programs for AIGs Lexington Insurance Company, Jino Masone, CPCU, CLU, ARM, Executive Vice President of Zurich Programs, Andrew Cutler, Vice President of Beazley Lloyds and Geof McKernan, President & CEO of NSM Insurance Group.  They did a  recap of 2005 market conditions and discuss what is foreseen for 2006.  One common denominator that came from the panel was if your going to get into the programbusiness make sure the accounts combined can make up a minimum of 5-million in premium on a regional basis and 10-million in premium minimum on a nation basis.  In addition any new program needs to have a strong review of both data and historical information.  Data that’s available in some cases by having to call the potential insured and capturing via telephone calling and some data that can be purchased from vendors that offer compiled data such as National Marketing Services.

In a new twist this year representing the retail distribution there was two agencies nominated from the audience to speak. They were Ray Pavese, President, Pavese McCormick Companies and Bob Froese, President, Aronov Insurance, Inc. It was refreshing according to the retail delegates to hear a voice up there talk about commissions and the way both carriers and program administrators can improve the service and products into 2006.  It’s often frustrating for an agency that’s been in business for decades to have to deal with a carrier representative that is new to the property and casualty industry and may have never experienced a changing market place from hard to soft or visa versa. 

Larry Neilson, CEO of National Marketing Services, discussed the new release of the of the ilist, where NMS has designed a service to help agencies effectively focus their time, efforts and resources on prospective accounts. It’s called iLIST, and with this service you’ll receive intelligent data so that you can conduct an initial assessment (before the underwriting process and face-to-face survey) of a prospect’s potential insurance risk and with which program, if any, you should place the insurance once the prospect is interested. The bottom line: You can categorize your prospects based on the information you receive from iLIST, allowing you to streamline your marketing efforts between ideally prospects that fit your business objectives or markets, those that need to be placed outside the markets, and those perhaps that don’t fit your marketing objectives at all. How so?

Once you determine the markets you want to target and are ready to order a prospect list, with iLIST you simply don’t get thousands of contact names and addresses. Each name is rated and scored based on its attractiveness as an insurance prospect. Furthermore, behind this rating system are intelligent, critical data differentiations that make up the score. PLUS, YOU HAVE THE OPTION OBTAIN INDIVIDUAL UNDERWRITING REPORTS to see the full scope of the rating system and determine your next step.

Each of the 16 million businesses in the NMS national iLIST database has been rated based on its relative attractiveness as an insurance business prospect. Businesses have been scored and ranked along two major areas: intrinsic attractiveness and geo-based attractiveness. Intrinsic includes factors such as risk of bankruptcy, age of business and SIC code classification. Geo-based attractiveness includes factors such as proximity to a firehouse, location relative to a flood plain and crime rates for the area in which a business is located. This allows you to see which businesses make marketing and underwriting sense for your agency and to make informed prospecting decisions.

In addition, carriers have access to individual underwriting reports, which provide enough background to confirm or challenge his or her decision to write an account.

Jason Lewis, Health Care Practice Leader, CRC Insurance Services, Inc had a 30 minute presentation.  CRC Insurance Services, Inc. is the 2nd largest wholesale brokerage in the country with over 26 offices nationally. "While we are proud of our results, we most pride ourselves on the specialization & value we bring to our retail agent clients," said Lewis CRC Insurance Services.  Our Denver office specializes exclusively in casualty & property for healthcare & human service risks.  To best serve you, we utilize a diverse mix of in-house programs, exclusive appointments & brokerage markets to provide you the best possible solution for your clients.

Ron Dudley, Vice President, Standards for Acord and Cal Durland, Manager Member Relations, Acord teamed up to share they are aggressive in moving to work with the specialty market place.  They did this with a terrific video clip which you can access on their web site at www.acord.org They also made mention they’re active in working with the AAMGA and NAPLSO members as well.

Martin Gray, President & CEO Staff Brokers, Inc.   The title of this presentation was "Bottom Line Profits From PEOs".  This was a unique opportunity for any retailer and or program administrator to add another product to their arsenal.  Not only did Marty speak about what a PEO is, but how to go about selling them and creating enormous profits from them as well.

The day ended at 11:00 AM sharp with ½ day ski ticket paid for and handed out thanks to Rackley Solutions.  The group reconvened when the slopes closed for am apre ski gathering at the Sapphire Restaurant, Vail Village which was hosted by NSM Insurance Group, AIG Programs (Lexington), Zurich Programs and AVRECO.  It was fun to see the group relax and consume freshly opened oysters at the Sapphire restaurant while some delegates looked on in amazement that anyone would if get close to an oyster.

Kelly Drouillard, COO of Brooke Brokerage, Brooke Credit Corp opened up the conference on Friday morning with how to leverage human capital.  The delegation took copious notes while she was speaking about the methods Brooke goes through to lend money.

Many MGAs, wholesalers and program administrators have a tremendous amount of value right under their own roof they can leverage without giving up ownership of their business.  Kelly said they have provided millions of dollars to the qualified business in the market place to help them grow through acquisitions, mergers or those in need of capital.

Greg Thompson, President & CEO of Thomco Insurance Enterprise shared exciting new ideas for "How to Place a Start-up Program".  This was a must for wholesalers, MGAs and retailers that are interested in starting  or creating a new program or line of coverage to offer.  The main message in this was be prepared to have staying power in the development when it comes to investing money and time.  The one with the most data about the potential program came up again when it comes to average premium per account, accurate loss ratios and number of accounts both on a regional or national basis in order to get the carriers attention.

Jino Mason, CPCU, CLU, Executive VP, Zurich North America.  Zurich programs business in North America provides specialized insurance to small and mid-sized commercial and professional markets. Zurich services a variety of commercial automobile, general liability, professional liability. excess liability and property exposures for various targeted businesses and industry segments. Targeted businesses include trucking operations, independent auto dealer and rental businesses, crop owners, tanning salons, fitness clubs and a variety of professional service providers. The company utilizes its nationwide selection of agency carriers, program administrators, independent agents and an in-house sales force to distribute its products.

Ted Baran, Vice President for Sales & Marketing, shared they are one of the largest independent wholesalers in the United States, AVRECO has access to over 100 insurance companies, both domestic and international. AVRECO has 40 years experience providing commercial property and casualty insurance underwriting with Lloyd's of London, and together our brokers and underwriters bring more than 100 years of brokering and underwriting experience to AVRECO.

We are also members of THE PARK GROUP, headquartered in Bermuda, and together with PARK we provide US corporations, carriers, and retail brokers with access to the world’s major wholesale and specialty markets.  Also in attendance was Bill Yurek, President of ARECO.

Frits Seifert, National Marketing Manager, AIG Programs opened up Saturday morning with "The Plan for the Third Billion."  In a very well crafted presentation he went over what AIG programs is what AIG Programs is not.  AIG Programs is fast approaching $2 Billion and are 40% admitted and 60% non admitted.  Frits demonstrated how the AIG Programs team has the experience to facilitate taking an idea and turning it into a program.  They have plenty of track records on helping take a small program and making it large or large program and making it larger.  At the end again we heard program requirements of $5-million minimum  for monoline or regional business and $10-million on a national or multi-line basis.

Bruce Winterburn, Vice President, Carrier Sales of AMS Rackley presented "SubmitWrite MGA Submission System." He concentrated on how the use of rating products AMS Rackley offers can help with the specialty markets for insurance policies and coverage’s.  Some features he keyed in on was how agents are allowed to submit via the MGA/Broker’s web site.  The system allows the underwriter to receive clean and complete submissions.  The system even allows the user to create and write custom underwriting rules and questions.    Once the retail agent submits the quote the underwriter at the MGA would be notified via email that a submission has been received and is available for import into Rackley POLICYrater.  Bruce was also the winner of being the best Story teller during the closing night dinner and walked away with some cash in his pocket.  If you ever get a moment to speak with him ask him to share this funny moment he shared with the delegation while at Peak Performance.

Leslie Woods, National Sales Manager, St. Paul Travelers Companies stood up and shared the key to success "Writing Commercial Programs in a Changing Market."  Les was helpful in sharing what St. Paul Travelers looks for when selecting the right program manager.  Four traits that come to memory are knowledge of the market place, expertise in the class of business, common goal of profitability when underwriting and effective management of the distribution of the program.  Also just as important  is the carrier selection that the program administrator chooses from a financial strength and commitment to the class of business.  We also heard many echo the impact of reinsurance will continue to affect the market place. It was interesting to see one of the slides in this presentation that in 2005 we had 27 actual named storms and in 2006 a projected 17.  As for hurricanes we had an actual 14 occur in 2005 and a projected 9 in 2006.  As for Cat 3+ in 2005 we had 7 occur and in 2006 a projected 5.  These source of these statistics are from Colorado State University.

As far as personal networking, aside from 3 Power Breakfasts, events also include an incredible "Bavarian" opening reception the famous Helmet Fricker and his yodeling team and a closing night dinner that had a lot of laughs.  There are many other opportunities for mixing and mingling at the fun and casual  social events.

Vail, Colorado at the Vail Marriott Mountain Resort is Nestled at the base of Vail Mountain, and just 150 yards from a gondola that carries you to the very top, the Vail Marriott Mountain Resort and Spa is the perfect location for daredevils, daydreamers and dynamic meetings - offering hospitality at the height of perfection This village truly lived up to the mountain for the last three years of this conference.

If you are interested sponsoring or attending next years 2007 Peak Performance Insurance Ski Conference on Wednesday January 18th through January 21rst being held at The Canyons www.thecanyons.com , Park City Utah during the Sundance Film Festival, you can find all the details and a registration form at www.skiprogrambusiness.com which will be updated soon or call Jeff Neilson, President of programbusiness.com 800-736-9741 ext. 3003.

Contact:

Jeff Neilson
1-800-736-9741, ext. 3003