IMC Says Insurance Is Still Best Policy

While most independent agents talk about insurance being a peoplebusiness, one firm feels so strongly about the value of its“braintrust” that it cites a daily, staffwide meeting as thebackbone of its successful approach to client service.

Each morning at 8:15 a.m., the 25-member staff of InsuranceManagement Company in Erie, Pa., assembles to share and discusstheir experiences in underwriting, claims, sales and customerservice. The point of the open dialogue is to help one anotherthrough the challenges of the day, especially valuable in ademanding hard market.

“It is the biggest [service] tool we have,” said IMC PresidentJohn C. Bloomstine. “Our accounts are big accounts and a lothappens. There is always something new, whether it be anacquisition or in claims. To have a bunch of individuals together[from different disciplines] to solve problems is a greatresource.”

IMC remains, after 69-years, a family business that has amassed$26 million in premium volume solely through commercial lines. Inits third generation, it remains a family-oriented firm–and,according to Mr. Bloomstine, the goal is to remain that way.

However, he confesses, with the rapidly changing face of theinsurance industry, it is hard to predict exactly what the agencysfuture niche will be.

For now, the agencys customer service efforts have won it an“Honorable Mention” in National Underwriters first“Commercial Insurance Agency of the Year” award program.

This is not the first time the agency has been noticed beyondErie. It has been the subject of several business pieces in localand trade publications, including an article in the April 26, 1999,edition of NU, after it won the “Arthur Quern QualityAward” from the New York-based Risk and Insurance ManagementSociety. The RIMS award honors the memory of the former chairmanand chief executive officer of Aon Risk Services, who was aservices role model for the risk management community.

Besides its commitment to quality service, IMC continues to keepits focus on the insurance side of the business. Whileself-insurance is always an option, the agency does not deal incaptives. Instead, it feels the best way to adequately andcomprehensively fill client coverage needs is through the standardinsurance market. “We always find a market source,” Mr. Bloomstineexplained.

Understanding where those market sources are means research,communication, and staying in touch with the underwriters whodecide what their risk appetite is.

To help everyone on staff stay on top of the market, IMC hasassembled a vast technical research and reference library, in whichthe agency invests $15,000 a year. Despite the wealth ofinformation available on the Internet, producers cant findeverything online in the public domain, he noted, and so thelibrary gives IMC a proprietary edge in this knowledge-basedbusiness.

“We dont use [the library] every day, but when you need it, youneed it,” Mr. Bloomstine said.

However, with carrier appetites changing continually, researchis sometimes not enough. “There seems to be more focus on a smalleramount of companies [among agencies],” observed Mr. Bloomstine. “Anindependent agent sometimes finds he has to go the way the companygoes. One has to really focus on whom one is going to work with,and so plan where you are going to go. Guys who have been around along time or know where they are going have been able to createtheir [agency] business around some carriers.”

IMC looks for carriers that are comfortable working with thelarge commercial accounts the agency represents. What this means isattending a lot of conferences and meeting with underwriters to“get a sense of where they are going.” It also means a lot ofhomework, reading everything available to understand where insurersare heading, and doing business with the right ones.

The reason for concentrating its efforts on the standard marketand not captives, explained Mr. Bloomstine, is that the standardmarket allows for the spread of risk, and, as he asks clients, “canyou do a better job than [insurers]?”

To keep the current hard market in perspective, IMC points outto clients that, generally, insurance rates are back to the levelsthey were in 1993, and the agency uses charts to illustrate theircase. The lesson is that despite hard market premium increases oflate, the cost of insurance is by no means beyond historicalbounds.

Clients, however, still must keep premium hikes under control.To accomplish this usually requires accepting higher retentions,lower limits, or cutting back on coverage–thus implementing a lessformal and more flexible form of self-insurance, IMC noted.

There are some lines that are very difficult to write in thetraditional markets these days, Mr. Bloomstine admits, such asmedical malpractice and high-hazard property coverage. The agencyhas filled client needs in such areas by layering programs withcarriers. In only one case, he said, has a client left the agencyto form a captive because standard insurance was unavailable.

New business is hard to write at the last minute in this market,Mr. Bloomstine conceded. Often a prospect desperately shopping fora better price or coverage comes to IMC too late for producers toprepare a proper proposal to shop to carriers.

When concentrating on renewal business, IMC tries to prepare itsapplications thoroughly, emphasizing the quality of the account tomake sure it “rises to the top of the stack” and gets theunderwriters attention. It also means knowing who to go to with arisk. “You cant do a shotgun approach. You have to know who isinterested in that type of business,” Mr. Bloomstine noted.

Technology also helps, allowing everyone within the agency toaccess information quickly, and to easily update an account orcommunicate internally through e-mail. “We are on the technologybandwagon, but it does not sell insurance,” said Mr. Bloomstine.“It helps us, but it certainly doesnt sell [by itself].”

In response to customer concerns after the terrorism attacks oflast Sept. 11, IMC called upon GE Global Assets Protection Servicesto help educate clients on how to deal with the media in case of adisaster.

While clients in IMC's Western Pennsylvania area have beenspared terrorism exclusions, the agency used its eight-yearrelationship with GE to create the disaster response program andmake a video as part of its risk management seminars. While it ishoped there would never be a need for clients to implement thelessons they learned, the initiative at least creates awareness inthe minds of clients, and adds value to the services IMC offers,Mr. Bloomstine said.

Mr. Bloomstine sees IMC growing beyond its regional reach as itsclients expand internationally. When they move into the globalarena, he said, he wants to make sure they can take IMC with themas their broker. With the carrier relationships the agency hasbuilt, he does not see placing global business as a problem.

The challenge, he said, will be to make sure communicationtechnology does not depersonalize the relationship with clients andcarriers as their sphere of business expands geographically.

“This business is a people business,” observed Mr. Bloomstine.“It is all about trust; that is what it all comes down to. And thatis measured by how involved you are with your clients, and sittingdown and telling them what is happening [in the insurancemarket].”

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, September 23,2002. Copyright 2002 by The National Underwriter Company in theserial publication. All rights reserved.Copyright in this articleas an independent work may be held by the author.