A reputation in the umbrella liability businessdistinguishes W.H. Greene & Associates, and according toPresident Bill Greene, that's a foot in the door of retail agencycustomers for the East Aurora, N.Y.-based wholesaler and MGU--afirm that is also pursuing public entity niches during the softmarket.

Mr. Greene spoke to NU's E&S/Specialty LinesExtra prior to the annual meeting of the National Associationof Professional Surplus Lines Offices, Ltd. inOctober.

Q: Describe the market in the lines/ regions in whichyour firm participates.

"It's still soft. I'm still seeing competitors enter a line ofbusiness that's considered long tail and therefore it shouldn't bevery sought-after business." But as they continue to move in,supply and demand forces work to knock down prices, said Mr.Greene, speaking from the perspective of a large umbrella writerfocused mainly in the Northeast, but with a book that extendsthroughout 44 states.

Mr. Greene said his firm's results somewhat contradict theoverall industry trend he described. His renewal book, in fact, isshowing a slight rate increase.

In the current economy, he said, contractors and manufacturersare suffering. Contractors don't have as much payroll as they hadin the past; manufacturers don't have as many sales. "So exposurebases are dropping--and they might drop 20 or 25 percent," hereported, adding that his firm is seeing its renewal premiums fallalso, but that the premiums are not dropping to the same extent asexposures.

That means rates are up for the book overall, he explained. "Myunderwriters are definitely looking at the exposure drops andreducing premiums, but they're trying not to reduce premiums at thesame pace."

New business, however, is much softer. If business is "gettingshopped, there are a lot of players out looking there for it, andprices fall quickly," he said. "I don't think you're getting thesame rate on new business that you're achieving on renewals."

Mr. Greene said rate decreases for new umbrella business areanywhere in the 5-to-15 percent range, while his firm's renewalbook is seeing rate increases of 5-to-7 percent.

Q: What about other lines, such as primary property,aviation or D&O?

A: "We normally work on larger accounts, and on those we havenot seen any hardening of the marketplace."

Q: What are the biggest challenges your firm faces thisyear?

A: "One challenge is alternative markets--a lot of business isgoing to captives and pools."

"Until some of these captives have problems, or they have lossesthat increase their premiums to [levels] above what the standardmarkets are going to charge, we're going to continue to face thatproblem," Mr. Greene said.

Q: Are there any particular types of businesses beingdrawn to captives?

"A year ago, I probably would have said contractors, but nowwe're seeing [captives for] just about anything that's gotsize."

Q: What strategies does your firm have in place forsurviving the soft market and the tougher economy?

A: "We look to continue to find niches where we can besuccessful," Mr. Greene said, noting, for example, that his firmhas a very large play in the public entity arena.

In that segment, neither rates nor exposures are decreasing."Schools still have the same number of students they had last year.Public entities have net operating expenditures that are usuallywithin the same ballpark as they were the year before."

Mr. Greene also said his company seeks niche business that isprogram-oriented. "We're finding some producers throughout thecountry who have niche primary programs of their own, and we'rebecoming the umbrella facility for those. That's a very successfulstrategy for us."

Q: What does W.H. Greene do to set the firm apart fromcompetitors?

A: "We're very well known as umbrella underwriters. That is ourfoot in the door. Because we are very capable, we have in-houseauthority. We control our own destiny in the umbrella arena. Thathelps us get other lines of business," Mr. Greene said.

"Why should they send the umbrella to us and the primary tosomebody else when chances are very good that we're going to writethe umbrella?"

Q: Your Web site indicates that you negotiate your ownreinsurance. Is that unique?

A: "It is very unique," although it's moreaccurate to say that "we're very involved in the reinsuranceplacements for the companies we represent." As a result, "we'reable to get much more authority and a larger underwriting box," Mr.Greene said.

Q: There have been many personnel changes among insurersthis year. Does that impact your business? Do you have anallegiance to the carrier or the individual?

A: "We have a very strong allegiance to our companies, butinsurance really is a people business. So when one of yourunderwriters or one of the top executives moves from one place toanother, you can't help but talk to that person and try to helpthat person if you can," Mr. Greene said.

"It's difficult because you do want to help and you do have arelationship with that individual. So they do have a foot in thedoor and they have a good chance of getting a block of businessfrom our office because they were the ones that helped us becomesuccessful in the first place."

Q: How does this soft market compare to prior ones? Whendo you expect to see a market turn this time around?

A: Mr. Greene didn't have any firm predictions, but he did offerobservations.

"Every time we hit a soft market, it lasts for such a long time,and as it hardens up, it seems like it's over in a flash," hesaid.

He recalled once receiving a poster from one of his companiesdepicting two vultures sitting on a branch. "Vultures eat deadmeat. They don't kill anything," he explained, going on to reportthat the poster showed one vulture telling the other he was tiredof being patient. "I'm going to kill something," the vulturesaid.

Mr. Greene said, "That's sort of how things go in the insurancemarketplace. The hard market lasts for such a short period of time,you do have to capitalize on it, but you certainly can't run yourbusiness as if that's going to be the constant."

"The constant is going to be a somewhat soft market. It's notgoing to be the pits of a soft market, but it's going to besomewhat soft," he said.

Over the last 30 years, "if I took all of the soft years and allthe hard years, that teeter-totter would never move," he said.