Old-Fashioned Values Keep Agency Current

Insurers used to be committed to a "standard of service to the agent for their clients that our industry has lost," according to Mr. Nolt.

Now, he said, various "niches and service voids" have been created as companies have shut down branches and closed regional and sub-regional claims offices.

Murray has turned this type of void into a positive by creating a program division to fill gaps in customer service, Mr. Nolt explained, calling the move a "huge opportunity" for the agency. "With the culture we have here in central Pennsylvania–which is a work ethic and excellent economic results-oriented culture–service wears well."

In the construction industry, where contractors require a lot of service, he said, the agency has "scrambled" in the last year or so with the hardening of the surety market to meet customers needs.

To help its construction industry clients, Murray has four full-time safety and loss control staff members who are "hands-on and relationship oriented."

The staff is trained to teach certified Occupational Safety and Health Administration courses, which are offered on a regular basis. "We are always available to help," Mr. Nolt said.

Being a third-party administrator of workers compensation claims, he said, is a niche opportunity created by insurers, which have shut down branch offices and moved into large corporate service centers.

"They cause a problem for themselves because they lose touch with the [geographic] area, the lawyers, doctors and the people who ultimately have a say in how large and how much of a problem those claims become," he said.

The agencys theme for claims is "day-one, minute-one," Mr. Nolt explained. "When a claim comes in here, it gets treated and handled immediately as a medical claim." This makes for a happy employee who is "getting attention. We dont want the claim to become an indemnity claim unless its justified." Many claims end up as lawsuits when people get frustrated because of delays, he said.

"A national company with a claim office in Florida trying to handle comp claims in Pennsylvania is a problem," he said.

He noted that the agency offered a course last year to teach its contractor clients how to qualify for a 5 percent discount on workers comp premiums by setting up safety committees.

In the state of Pennsylvania, he said, employees must be given a list of doctors available to them in case of a workers comp claim. The employer, however, has some control over which doctors are on that list, and Murray helps them with this.

Murray stepped in to fill a different kind of void in the insurance market for preferred, not-for-profit retirement communities in Pennsylvania. When it became evident that insurance capacity for such communities was diminishing in the state, Murray queried its clients, did some research and, as a result, developed a single-cell captive program.

Eastern Pennsylvania is a leading area in the country for top-quality nonprofit retirement communities, Mr. Nolt explained.

"These retirement communities have a nursing home component," he noted. "Although they dont have doctors on staff, they have nurses and an incidental exposure for professional liability."

A captive was set up in Bermuda. "After a year, we have $3.5 million in premium and 10 of the local communities in it. So its been a real success story," he said.

As captive managers, the agency administers the underwriting, loss control and claims. The captive is one of only a few created for retirement communities in the United States, he noted.

The agency also has addressed Pennsylvanias serious medical malpractice issues by setting up a risk retention group for physicians in a nine-county area. The program includes a customized risk management strategy that includes physician education, best practices, event management and peer review.

The RRG, effective only since July 1, already has attracted more than 50 doctors, he said. It is domiciled in South Carolina and approved by the Pennsylvania Department of Insurance.

"A big component of the captive and the RRG is the prevention of claims and handling them quickly, effectively and locally when they occur," he said.

Mr. Nolts advice to agents and brokers: "Its a well-worn clich?, but you have to build relationships with your customers and suppliers," he said. "In the hardening market, we talk about the fact that we probably spend more time developing the relationships to convince the underwriters to accept the risks than we do finding risks to sell."

He added that it has become more difficult for small agencies to get started.

"I dont know if our industry is a place for the small guy anymore," he said. "Thats a sad commentary, but the big seem to be getting bigger." Agencies should "merge or find niches to quickly establish themselves and build the right relationships," he recommended.

Mr. Nolt said direct benefits from the agencys initiatives include more risk management assistance to clients, which has helped those clients during the hard market and resulted in new and enduring relationships for the agency; new sources of fee income, which have offset commission reductions; and the creation and maintenance of "local services" that are preferred by area businesses.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 19, 2003. Copyright 2003 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.