What emerging opportunities is your companytaking advantage of in 2012?

Jeremy Hitzig: The soft market has made itchallenging for many companies to make investments in theirbusinesses in recent years. We have reinvested in training anddevelopment as well as systems and technology. I am confident thatthese investments will pay dividends as the market begins to changein the next year or so.

James Drinkwater: Specialization. We see acontinued move of the industry toward specialization and we arefinding that our clients and markets increasingly want to deal withpeople that specialize in a certain area or industry class. Overthe past 3 years, we have built out 14 risk and industry practicesand will continue to develop those practices in 2012 to build evenstronger expertise, techniques and unique products andservices.

Next we are taking advantage of the market opportunities. Whilethere are differing opinions of where the market goes in 2012,there has been some change in underwriting appetite, pricing andprogram structure, especially in certain market niches and on moredifficult or loss-exposed accounts. This is an area of strength forus and we will be work to identify those segments, create newsolutions, and be in a position to deliver on the insurance needsof those niches and accounts.

Chris Zoidis: We have made significantinvestments in growing our specialty product areas and our personalinsurance business and we continue to have strong growth in thoseareas. We see growth opportunities in healthcare, professionalliability, and environmental liability, which we will continue tocapitalize on in 2012. We also have plans to expand our personalinsurance business and are looking at opportunities to expand ourplatform outside the U.S.

Joel D. Cavaness: We have focused a lot ofeffort in developing tools and programs that can be accessed on aregular basis. Our brokers are then able to quickly and easilyobtain quotes on accounts for certain lines of business in aslittle as 5 minutes from quote to bind. We plan on expanding thistechnology to additional lines in 2012 to make getting access toour products easier for our retail brokers. Along the lines oftechnology, we continue to see emerging needs in the way oftechnology E&O or cyber liability. Many firms do not understandthe need for this coverage and how it needs to be tailored to fitthe specific need of the business depending on the exposures thatthey may face. We have spent time and effort in this line to writepapers and provide seminars and one on one service to help ourretails help their clients.

What are your business goals for 2012?

Hitzig: We expect to complete one or two moreacquisitions in 2012 to continue to diversify our product lines. Wehave spent the last couple of years investing in a new technologyplatform which we hope to bring fully online in 2012. We have beenable to grow the business over the last few years, and I am hopefulthat our new technology will make us more efficient and customerfriendly—which we hope increases both our top and bottom lines.

Drinkwater: More specialization. From expertiseand techniques to new products and services, this has been and willcontinue to be a key strategy for AmWINS. We also have startedmaking investments in training and development about 3 years ago.We are starting to see our development program pay dividends. In2012, we will expand the program to more of our employees.

We plan to launch a customer service practice. This practicewill help us share knowledge, ideas and best practices across ourservice platform and in all of our offices. Over time, this alsowill help us with career development, employee satisfaction andretention. We have built a broad array of products(property-casualty, underwriting programs and group benefits). Wewill continue to keep a focus on cross selling and internal productknowledge so we can become even more effective at getting ourclients to these solutions when they need them. Our risk andindustry practices have proven to be a great platform to highlightour products in a more effective manner across multiple productlines.

Zoidis: We are focused on growing profitabilityin 2012. Given that we do not expect much growth in the E&Smarket in 2012, we will achieve growth by taking market share fromour competitors. We will be increasing our advertising andmarketing efforts, as well as increasing our investments intechnology and hiring to achieve this growth. We also are lookingat opportunities to expand through acquisition—which we willactively pursue in 2012.

Cavaness: Our business goals for RPS willalways have organic growth along with merger and acquisition growthfor 2012. We like to look at our business each year and deviseplans for a 10 percent to 15 percent growth rate in each of ouroffices and specialties. Growth in the past few years has beendifficult but we have managed to grow every year since we werefounded. If you are not growing, you are actually going backward;if you go backward long enough, you will be out of business.

Read on for the panel's take on business strategies,insurers and competition.

Have you shifted your businessstrategy to accommodate economic changes?

Hitzig: We have focused more on “value”products rather than upselling. And we have developed products thatthrive in challenging economic times (e.g., vacant propertycoverage). At the same time, we also have invested in new productsthat we think are well positioned for success when the economyrecovers (e.g., builder’s risk). In short, we like to have abalanced portfolio that can ride through economic and insurancecycles.

Drinkwater: Our diversification strategy hasalso been a key part of our financial success. In 2012, we willcontinue to drive that financial conservatism through the company,investing where we should to drive returns and build thecompany.

Zoidis: We have focused our efforts on productswhere we see growth opportunities despite the current economy.These areas include personal insurance, healthcare, professionalliability, and environmental liability. We are also focusing onmiddle market brokerage business where we are seeing growthopportunities in some classes of business.

Cavaness: We were fortunate that we had plansin place for each of our offices to be proactive instead ofreactive to the economy and made adjustments where needed ahead ofthe curve. We all made sacrifices. We looked at every single spendin our business and looked for ways to save money. This includedeverything from office supplies to rent to staffing levels.

Are you and your insurers on the same page with businessgoals?

Hitzig: We have enjoyed long-term relationshipswith Chartis and Great American, our two principal insurancecompany partners. We regularly discuss our goals and strategieswith them and are confident that we our aligned from both ashort-term and long-term perspective.

Drinkwater: Everyone wants growth and profit.How we do it takes more time as we work to align the needs of ourclients and our firm with the capabilities and strategies of ourmarkets. Our job is to get our clients into the right markets, so agreat deal of our success results from communication, marketknowledge and some level of consistency and patience.

Zoidis: Yes. We are all looking for profitablegrowth—with an emphasis on profitable. We respect their desire tohold their pricing and underwriting standards while also beingflexible in letting us approach the market in unique ways.

Cavaness: We strategically plan with most allof our main insurance carrier partners each year. I believe that weare all on the same page as respects the long-term plans for ourrespective business models. Although at some points in time we maybe unable to support their needs for certain changes, just as attimes they can’t support our needs, in a long-term view I think weare all on the same page.

Are you still seeing significant competition from thestandard insurance market?

Hitzig: In some lines and territories, we haveseen the beginnings of a retreat for some of the standard insurancecompanies. Not necessarily a total retreat, but rather atightening of guidelines and less flexibility on price. Thishas led to a firming of rates—which we anticipate will continue, ifnot accelerate in the coming year.

Drinkwater: The standard market will always bea competitor in our space, but the level of competition justdepends on the market cycle. Despite the competition we currentlysee from the standard markets, 2011 has been a positive year, withdouble-digit organic growth in a number of different areas.Insureds and retailers value the E&S marketplace because of thevalue we can bring with respect to pricing, terms and the abilityto craft alternate program structures. Now we are seeing the rateenvironment flatten, and we get the sense that they are beginningto back out of our space because of the deterioration in theirunderwriting results and the potential impact of RMS 11.0 in 2012.We believe that regardless of the competition from the standardmarkets, there is always going to be opportunity in the E&Smarket because of our ability to solve our clients’ most difficultissues by offering creative solutions at competitive terms.

Zoidis: Yes, in certain areas, such as fromregional carriers in the Midwest. We also are seeing the standardcarriers pull back on a sporadic basis. We have seen someunderwriting tightening and rate increases in commercial propertyand homeowners from the standard carriers across the country, butnot on a consistent basis.

Cavaness: The standard markets were strongcompetitors a few years ago but in the last year this seems to haveslowed down significantly. The standard markets seem to haveleft what has been considered E&S business and now operatesomewhat on the fringe of this segment. We love to see themout of this business, but they creep in and out depending on themarket.

The panel also discusses professional designations,technology investments and the captive market.

How important are professionaldesignations to your company's professionals?

Hitzig: We traditionally have not placed aheavy emphasis on professional designations as much of theeducational content just is not applicable to our business andapproach. That being said, we expect to strongly encourage ourcolleagues to participate in the recently launched TargetUniversity courses and ultimately complete their CPL designation aswe feel that the content is tailored to the specific needs of ourindustry and business.

Drinkwater: Designations are an importantelement of our overall focus on professional development. We havealways supported this area, and will continue to emphasize theimportance of these accreditations going forward. We have also beenusing other resources to help our employees with their professionaldevelopment, including collaborating with carriers who have donesome great things around training.

Zoidis: They are very important. We activelyencourage and enable our producers to obtain their state agent’slicense and CIC designation. In addition, our underwriters areactive in CPCU and RPLU designations.

Cavaness: Education is the foundation of thisindustry. Without this foundation the future of a businesswill not hold up in the long term. We hire many new collegegraduates each year and also have an internal training program forthese new hires. As part of this training we require thateach new hire begin the ASLI program and as part of theiragreement, they will work toward this designation untilcompleted. I worked to get both my CPCU and ARM, so I ampersonally committed to have people continue to grow anddevelopment themselves.

What technology investments will you make in2012?

Hitzig: We will continue to make a significantinvestment in the development and rollout of our new system with aparticular emphasis on providing the full range of onlinefunctionality to our broker network.

Drinkwater: Like many firms, we are makingincreased investments in technology. We view technology as a keydifferentiator for us today, but we also realize that you mustcontinue to make significant investments to stay ahead of thecurve.

Zoidis: We have invested heavily in technologyover the last 5 years and we will continue those investments in2012. We believe that a soft market is the right time to beinvesting in technology so we are fully prepared for marketchanges. We are actively upgrading our systems to improve thespeed and accuracy with which we serve our brokers and retailagents. We also continue to update our systems to make iteasier for our brokers and agents to interact with us.

Cavaness: RPS has made significant investmentsin technology in systems, software and people. We brought ina new CIO midyear with Mike Roy and Mike has already madesignificant headway in helping us be better in our use andselection of systems. You can buy the best systems availablebut if you don't use them properly, you have just wasted yourmoney. Mike has brought a new level of training to RPS to getus to use our systems in a better and more efficient way. Inaddition, we have made a significant investment in imaging andworkflow that is now being rolled out across all offices inRPS.

With coverage readily available, how important is thecaptive market to your business?

Drinkwater: While marketplace interestcomes and goes on captives, the truth is they play a role, and theytake time to build and sell. We have done more on captives in ourgroup benefit and underwriting divisions. While it is not a hugepart of our business, we will always stay close to close to it.

Zoidis: The captive market has not beenimportant to our business, given the current state of the marketand availability of coverage for a majority of exposures. In fact,we have seen some insureds moving from captives back to the E&Smarket.

Cavaness: The captive market serves a veryimportant segment of the industry today. This particularsegment grows or slows based on the market cycles that we operatein. I do not believe that if an insured is committed to thisvehicle that they generally will get in and get out. Theseclients as a rule once they commit seem to stay with this strategyfor a long period of time. Although RPS does not have acaptive specialty, it may be one that we would like toexplore in the future.