Mid-Sized Brokers Expand In International Marketplace

"Wortham has a rich history in international brokerage," observed Frank Fiore, international director for the firm. He said the brokers first foray was with international construction company Brown & Root in the early 1950s in the building of the Aswan Dam in Egypt.

During that time, Wortham used the London market to obtain insurance for the accounts. With the firms proximity to the major oil industries, Mr. Fiore said, the broker found itself working with the petroleum producers as they ventured overseas in search of crude.

Eventually, Brown & Root, now a part of Halliburton, a Houston-based engineering and construction corporation, formed its own captive to handle its insurance needs, said Jim Davis, a Wortham partner. But, by that time, Wortham was already well established in developing programs on an international basis, and continued to grow in involvement and expertise as globalization developed.

Expanding on their global relationships, the firm is a partner in Assurex Global, the global broker network headquartered in Columbus, Ohio. The partnership extends through 70 countries and boasts $14 billion in premium, noted Mr. Davis, which augments the firms four offices and 400 employees in Texas.

Thanks to the purchase of a metal cabinet factory in Europe by one of its clients, Herbert L. Jamison & Company, LLC, of West Orange, N.J., entered the international field in 1994.

There are contacts with the Lloyds market that can be traced back to the firms establishment in 1898 when it specialized in marine insurance, explained Jesse J. Watkins, senior director of Herbert L. Jamison & Company However, with its clients factory purchase, Jamison came into contact with the International Insurance Brokers Association headquartered in Brussels, Belgium.

This association allows local brokers in more than 100 countries throughout the world to form partnerships and extend services to one another, Mr. Watkins said.

Prior to the customers acquisition, Jamison did not have an international strategy, outside of its long association with London, noted Mr. Watkins. Because of that fortuitous acquisition, the broker now enjoys expanded revenues and sales opportunities, he said.

"This has given us a dimension of growth we would not have enjoyed otherwise," Mr. Watkins said. "It allows us to interact with other markets and gives others the opportunity to work with us."

In 1991, Tom and Walton Rutherfoord, the owners of Thomas Rutherfoord Inc. of Alexandria, Va., decided they wanted to become involved in the international arena. They began by brokering an employee benefit, property-casualty program for a non-profit agricultural organization in Costa Rica. This venture led to the establishment of Rutherfoord International Inc., explained Sara K. Payne, the vice president and office manager of the subsidiary.

Now, the firm has found its niche as a broker of foreign package policies including workers compensation coverage for employees working overseas for American firms, whether they are U.S. citizens or foreign nationals working for the company.

The firm, Ms. Payne went on to explain, also is involved in handling insurance services for such diverse groups as the Organization of American States, the U.S. Department of Defense civilian contractors, and the Society for Petroleum Geologists. Coverage can also include health care for foreign medical problems, overseas medical evacuation and repatriation in case of death overseas.

The firm also acts as a managing general agent for Defense Base Act (DBA) coverage, underwritten by CNA for the U.S. Department of State and the U.S. Agency for International Development. The government requires DBA for all civilians working overseas under a government contract. The program, Ms. Payne said, is an offshoot of the Longshoremans Act that provides federal workers comp to dockworkers and also extends to acts of war.

Through a combination of word-of-mouth, referrals and the Web, the brokers business and expertise has grown substantially in this very specialized field, she added. The war in Afghanistan has also contributed to an upsurge in requests for coverage.

"We became an international broker because 20 percent of our client base had operations overseas," said Bruce Basso, chairman of ABD Insurance & Financial Services Inc., headquartered in Redwood City, Calif., with more than a 55-year history in the business.

Until its acquisition in March of this year, by Greater Bay Bancorp, of Palo Alto, Calif., the firm was one of the largest privately held brokers in the country. But that has not changed the brokers direction, as it continues to provide the myriad of services to clients throughout the world, noted Mr. Basso. If anything, the acquisition will allow the firm to grow ever larger, he said, with greater access to capital while retaining the independence it has enjoyed.

To serve its clients, in the mid-to-late-1990s the broker built World Broker Network, an elite and active group of 42 members in 38 countries, which Mr. Basso described as "not just a list you put your name on." He went to say that the group consists of very sophisticated brokers who are very fussy about their membership.

This network, he explained, is necessary because the network firms realize they need people in growth areas who know the local regulations and language and can be called upon whenever necessary. All of which is needed, Mr. Basso remarked, as corporations and insurers become more international and economies continue to globalize.

"It is necessary to grow in this business and the form that takes necessitates we be an international player," observed Mr. Basso. "You cant do that on the backs of insurers."

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, July 8, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.