With summertime in full swing, many people have turned their attention to fun in the sun, making it a busy time for organized sports activities–as well as for the specialty insurers and producers who serve them.

This niche targets not just summer sports leagues, but camps to help improve a youngster's chances for getting an athletic scholarship, as well as more experienced amateurs in search of how to stop slicing the ball in their golf game or improve their backhand for tennis.

For agents and brokers, marketing sports insurance can be an opportunity to engage in some new business or cement a long-term relationship with existing commercial and personal lines clients.

But those who specialize in these markets say there is more to the niche than a simple liability policy required to play on a municipal field. And while the coverage is traditionally a good risk, there are potential issues that may not be so obvious to the uninitiated or inexperienced in the field.

“The amateur sports market continues to grow as the variety of sports activities available for both children and adults expands,” noted Sheila Morton, sales director for K&K Insurance Group Inc. in Fort Wayne, Ind. “With a continued media focus on the importance of healthy lifestyles combined with the popularity of youth sports, we expect the trend to continue.”

From a loss experience standpoint, the niche is a marginally profitable business, and like the rest of the property and casualty marketplace, there is a lot of competition, according to David A. DePuy, executive underwriter and program manager of the amateur sports program for Markel Insurance, headquartered in Glen Allen, Va., who said his company has managed to maintain its rates.

If there is one major drawback to the market, he said, it is that the risks are primarily low premium-dollar accounts.

Lori Windolf Crispo, senior executive vice president for Short Hills, N.J.-based Bollinger, noted this line is highly transactional involving a lot of small policies, so “the more automated, the better.”

The coaches and others involved in the sports camps and amateur leagues are not professional risk managers. Many are volunteers in organizations where the leadership changes each year, thus requiring “help to walk through” insurance purchasing decisions, Ms. Crispo noted.

“We have never been able to put these accounts on direct bill and stop touching them,” she observed. “They like their hand held a lot because they do not know or want to know much about insurance.”

For an independent agent, the likelihood is that their involvement will first begin when an existing client who becomes involved with a sports program approaches them for help with their insurance. Many times, the market specialists note, clients will contact them on short notice after discovering they need coverage before the weekend to play on a public field.

Getting liability coverage may not seem like a significant problem, but the executives who specialize in this market warn that producers need to know more than they think they might to provide proper coverage.

“Agents new to writing sports risks are sometimes unaware of gaps in coverage,” said Ms. Morton. “We often get calls from agents looking for just medical coverage or just liability coverage. Agents should take the time to understand the complete risk and verify each individual organization's potential exposures.”

Brokers helping out a sports league need “to work with a specialist to make sure the customer has the cover they need,” added Ms. Crispo. “There is a lot to think of, and they need someone to lead them through it,” she said, emphasizing the need to work with an expert who can package the insurance properly for them.

“The local broker has the presence,” said Ms. Morton. “They need to make it easy for themselves and not reinvent the wheel, and use us for their risk management needs.”

Specialists also pointed out that placing sports programs is an excellent way of promoting an all-purpose agency. Because of the nature of the buyer, local agents may find clients contacting them after volunteering to head up a sports league and discovering the league needs insurance for an event. Successfully coming to the client's aid can only be a plus for the agent's reputation for wide expertise and reliability.

Certain camp programs can be an avenue for a producer to expand an agency's business, said Mr. DePuy. This can happen when a coach or a coaching assistant at a college, for instance, runs a summer sports program. Filling that need for a coach could give an agent access to a larger college program if the client is impressed with the specialty service and could lead to expansion into more exposures elsewhere.

Both K&K's Ms. Morton and Bollinger's Ms. Crispo pointed out their firms have Web capability for agents to access information, buy insurance or speak to someone in person. At managing general agent K&K's site, www.SportsInsurance-kk.com, agents can obtain quotes on some business and get certificates, while Bollinger (www.BollingerSports.com) offers safety information, explanation of coverage and the ability to buy insurance with a credit card for direct retail service. The firm also sells the product on a wholesale basis.

Markel also offers a dedicated website at www.campinsurance.com with information and quoting capability. The company's other specific camp and activity offerings can also be obtained through this site.

One new emerging risk area the company offers is for cheerleading camps, according to Markel's Ian C. Garner, director of Camp & Youth Organization Relations, who noted that “there isn't a high school participant that does not go there each year.”

While amateur sports and camps is a good business, the specialists noted that it does suffer from the same soft market competition that many other lines are enduring in this tough economy. While standard lines carriers are less likely to enter this niche due to the low premium returns, it has not prevented excess and surplus lines carriers from competing.

Generally, capacity has not been an issue, but when it comes to limits, insurers have put the brakes on the amount of exposure they are willing to accept, specialists in the market said.

One trend cited is a growing request for higher limits, with some offerings as high as $5 million for leagues and associations.

Regional and state soccer associations, for instance, where the business is “highly competitive,” noted Markel's Mr. DePuy, have set requirements and guidelines laid out by their national governing bodies.

Other organized leagues and teams that often use municipal fields might need additional insurance beyond just a simple liability policy. Ms. Crispo of Bollinger noted that the necessary coverage could include accident and liability, directors and officers, and an equipment floater to insure transportation of league equipment–or even portable concession stands.

One feature that is increasingly advised is sexual abuse and molestation coverage. Specialists often pointed to the scandal that erupted in April at the U.S. swimming team, where several coaches were let go after reports they engaged in abusive behavior of female athletes.

Mr. DePuy noted that this is separate coverage to provide insurance for coaches and staff.

“They really need to have it,” added Markel's Mr. Garner. Markel has pushed awareness and education on the exposure, and as Mr. DePuy related it, many clients “may look at you cross-eyed” when the subject is brought up. But he said he has “seen enough alleged abuse charges that it is worth the money that is paid for it.”

Special Reports /

Summer Fun Translates Into Business Opportunities For Specialty Producers

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