An insurance agency servicing the global trade andtransportation industry needs to be as fast and efficient as itslogistics-obsessed clients.

And even more important for success, risk management expertiseis necessary in an industry governed by ever-changing domestic andinternational laws and regulations.

For its proven ability to be a trusted and nimble partner to itsclient base of customs brokers, freight forwarders, warehouseoperators and truckers who ship products around the globe, AvalonRisk Management earns Agency of the Year honors in the 2012NU/AA&B Commercial Agency Awards for Excellence. The agency,located in Elk Grove Village, Ill., also takes the gold in theCustomer Service and Technology & Operations categories.

“The nature of our client base is such that we generally haveregular contact with decision-makers in our customers' businesseson at least a weekly basis,” said Lisa Gelsomino, Avalon'spresident and CEO. “This continual need to interact with ourclients gives us the opportunity to deliver excellent service on anongoing basis.

“We become business partners with our clients,” she added.“Simply providing insurance to clients is only a partialsolution.”

Avalon was founded in 1998 as a wholly owned subsidiary ofKingsway Financial Services. In October 2009, Avalon's seniormanagement capitalized on Kingsway's recession-related financialdifficulties and bought the agency through sponsorship from FundManagement Group.

The buyout reinvigorated the agency and positioned it for futuregrowth. Commission revenue has increased more than 10 percent,despite the challenges of soft market cycles and shrinkingcapacity.

Risk Management Gives Edge

As program managers for many of the coverage offerings itprovides, Avalon integrates client risk management and loss controlinto its business at many levels. And its risk managementapproaches help Avalon earn endorsements and new clients.

Avalon recently solicited a large publicly traded company thatneeded a complex risk review. The evaluation found that theprospective client had a significant amount of uncovered risk,mainly from relationships the client had with larger shippers thathandle high risk commodities. Using its authority as a MGA, Avalondelivered 30 changes to the coverage forms that allowed theprospective client to keep its shipper relationships, and Avalonsecured the business.

As global shippers, the exposures faced by Avalon's clientsinclude liability under international treaties and conventions aswell as a host of territorial issues. Often, clients will have lessthan 30 days to comply with new statutes.

To help its clients deal with this complex regulatory landscape,Avalon is involved in more than 60 logistics-related tradeassociations at an international, national and local level, and itsregular attention to detail enables clients to stay abreast ofchanges as early as possible—and make sure the right protectionsare in place.

“We believe that our clients' interests are best served when weperiodically meet with regulators to be sure that we can predictcoming changes as early as possible,” Gelsomino said.

“Our employees are constantly trained on the niche industry weserve and so are able to converse with our clients on their ownbusiness matters as well as the products and services we offer tomanage their risk,” Gelsomino added. “We are such experts in ourindustry that we are able to effectively compete against the top,global brokers on Fortune 500 accounts.”

The human touch is key to providing exceptional service—and allclients are assigned an account manager to act as their advocate.Support, including a designated claims adjuster, A/R representativeand an underwriting specialist, is given to each account manager tohelp with coverage questions.

When claims do occur, they are acknowledged within 24 to 48hours and are maintained through a proprietary claimssystem—ARMour— which tracks carrier activity and generatesmanagement reports.

Avalon is appointed as a TPA by several of its insurancecarriers, and it offers claims services to clients as a value-addedservice as well. It provides services for all claims types,including Cargo Insurance, Legal Liability and ProfessionalLiability (E&O) claims.

It can settle claims in-house up to $50,000, and Avalon iscompensated by the insurance company for its TPA services soclients can receive complimentary claims handling with theirinsurance programs. For clients that maintain high deductibles, italso handles below-deductible claims on a fee and contingencybasis.

Technology Drives Service

But it's Avalon's commitment to investing in cutting-edgetechnology—with the goal of making all transactions instantaneousand transparent—that elevates its customer-service capabilities andhelps the company attain a 95 percent retention rate (98 percent insome lines of business).

Creating software from the ground up takes considerableresources. The agency spends more than average investing intechnology and talented programmers to provide value for itscustomers. “This has provided our in-house technology team anopportunity to innovate creative solutions—and [as a result], wehave an ecosystem of tools for internal and external clients,”Gelsomino said.

In addition to its claims database ARMour, Avalon's ITdevelopment team created an agency management system calledExcalibur, which customizes billing for different product lines andinterfaces with Web Merlin, which manages clients' custom bond andcargo insurance programs.

Avalon's proprietary Web Merlin system manages clients' CustomBond and Cargo insurance programs in a 24/7 environment. Web Merlinalerts clients to fraud protection and bond insufficiencies,manages reports, provides a bond sufficiency calculator, filesclaims, insures shipments and prints, emails or managescertificates. These systems manage underwriting, policy anddocument issuance, billing and cancellations, carrier reporting andmanagement analysis to assist clients and carriers in managing ahighly transactional business model.

As Avalon looks toward the future, it anticipates a hardeningmarket that it will weather through its profitable MGA and TPAprograms. “We know capacity for windstorm and other catastrophiclosses are becoming more difficult or cost-prohibitive to insure,”Gelsomino said, “so we are providing more risk-management andbusiness-continuity services for our clients in this area.”

Programs and Endorsements

Avalon is the exclusive MGA and TPA for Great American InsuranceCo. and ProSight Specialty Insurance for a Customs Surety andCombined Transit Liability programs, respectively. The CombinedTransit Liability program also includes the option to maintain anOpen Cargo Policy to insure cargo at full value if lost or damagedduring transit. The combined program has operated under a 30percent loss ratio since 2002.

Avalon is tribunalized with Lloyd's of London to write itscombined transit liability and ocean marine programs on a worldwidebase. Avalon also writes ocean marine and commercial P&Cwith Chubb, CNA, Allianz, Travelers, TT Club and othercarriers.

Several associations have chosen Avalon to be their exclusive,preferred or endorsed insurance provider including theTransportation Intermediaries Assn., National Customs Brokers andForwarders Assn. of America, International Federation of FreightForwarders Assn. and National Assn. of Foreign-Trade Zones.