NAPSLO's International Committee Sets Its Sights On Bermuda

Just before its annual convention this month, the Internship Committee of the National Association of Professional Surplus Lines Offices, Ltd. selected two scholarship winners among 15 American college students who interned with members this summer.

Later in the year, the committee will announce its choices–one to work next summer in London, the other in Bermuda.

While the annual London scholarship reflects the decades-long relationship between the American and London markets, the Bermuda scholarship is new this year.

That's a sign of growing interest in the potential of the Bermuda market, according to International Committee Chair Matthew Nichols, president of All-Risks Ltd. in Hunt Valley, Md., and Committee Member Alan Waring, president of Hamilton, Bermuda-based Crump International, Ltd.

NAPSLO established the International Committee almost two years ago because “almost every NAPSLO member does some part of his or her business in the London or the Bermuda marketplace,” said Mr. Nichols. The committee's purpose “is to promote an exchange for ideas, business perspectives, regulatory issues,” he said.

As one of a small group of wholesalers in the booming Bermuda insurance marketplace, Mr. Waring pushed for the Bermuda scholarship, and a Bermuda visit from NAPSLO's Executive Director Richard Bouhan and Mary Ellen Rozzell, outgoing president, during her tenure as NAPSLO president this past year.

The NAPSLO visit was “timely because a couple of U.S. carriers had started to focus on wholesale producer business here,” and the NAPSLO group was able to meet with lawyers and with markets to discuss this, Mr. Waring said, noting that the NAPSLO executives made a trip to London as well.

Commenting on the inception of a Bermuda scholarship, Mr. Waring said he values international internships, adding that the scholarship is important because the Bermuda market operates differently from the London market.

“For many brokers and underwriters, doing business internationally is something they are not used to. If they don't do it everyday, they don't understand the nuances,” he said. “But once they've experienced working in that market, they are more comfortable, more effective and more able to be a reference for their colleagues.”

Regarding the differences, Mr. Waring said that London, from an American perspective, is based on Lloyd's' market–a historic subscription market where a lead underwriter sets the terms writing a “slip” that the broker takes to other firms until he finds enough who are willing to opt in. In London, capacity depends mainly on the reinsurance that's in place.

In Bermuda, however, the market is driven by individual carriers whose huge capitalization enables them to offer limits of $25 million or $50 million or even $100 million without reinsurance. The broker's approach, therefore, is different.

Mr. Waring's perspective comes from a retail and wholesale insurance career that has included five years in Ireland, 11 in London and 13 in Bermuda.

Given Bermuda's position as the leading captive domicile, Mr. Waring said part of his mission at Crump International involves “developing an awareness in the wholesale broker community of how captives can form an integral part of solving problems for clients.”

During the business meeting at the annual convention, Mr. Waring was presented with the Dana Roehrig (Past President's) Award to recognize his efforts to make Crump the first host of a Bermuda intern in 2009 and to introduce NAPSLO executives to Bermuda association officials, markets and leaders during their visit.

Letha Heaton and Robert Sargent, co-chairs of the Communications & Technology Committee were also honored–receiving the Presidents Award to recognize their efforts to launch an education campaign to build awareness of the value of wholesale brokers.

The education campaign, scaled down from a more ambitious advertising effort being considered earlier this the year, will reach out to retail brokers and corporate risk managers. The effort will illustrate the ways in which wholesale brokers bring value by providing both the expertise and markets needed to place specialty risks.

The campaign follows a NAPSLO January 2008 survey of retail agents and brokers that showed an overall positive attitude toward working with wholesale brokers.

“There was a misperception that market trending reflected a lack of confidence in wholesalers,” rather than the soft market, said Letha Heaton, senior vice president of marketing for Markel Corp. in Deerfield, Ill.

Effectively campaigning to improve on the unexpectedly high satisfaction numbers–82 percent of agents were satisfied and 78 percent of agents ranked the brokers as above average–required a shift in the committee's approach.

A broad advertising campaign, Ms. Heaton said, could have cost as much as $1 million, noting that the committee ultimately decided to opt for a targeted marketing/public relations campaign “with a price tag in excess of $100,000.”

The high satisfaction levels mean the committee is now seeking incremental, rather than dramatic, changes in customer satisfaction. “Moving the needle a little bit” can be even more challenging, she said. “If it's not really broken, you have to be careful not to fix it the wrong way.”

After several months of research and planning, the committee launched the campaign in mid-July, bringing on Gary Kimball of Kimball Communications in Easton, Pa., to help flesh out and implement the plan. It includes speaking engagements, bylined articles, news releases and media interviews, all aimed at increasing the flow of business to wholesalers, Heaton said.

In addition to Ms. Heaton and Mr. Sargent of Mercator Risk Services in Hartford, several other NAPSLO members were honored at a business meeting during the annual convention on Sept. 12.

Thomas Mulligan of Western World Insurance in Franklin Lakes, N.J., who is chair of NAPSLO's Legislative Committee received the Richard M. Bouhan Legislative Advocacy Award.

Marshall Kath, chairman of Dallas-based Colemont, received the Charles A. McAlear/NAPSLO Industry Award for his contributions to the industry.

Mr. Kath, whose NAPSLO efforts have included a stint as chair of the Legislative Committee, teaching at the NAPSLO Advanced School, serving on the board of the Derek Hughes/NAPSLO Educational Foundation, and serving this past year as NAPSLO treasurer, also became secretary at the annual meeting.

John Wood of Specialty Risk Associates in Shreveport, La. became NAPSLO's president, and Dale Pilkington of Colony Insurance in Richmond, Va. became vice president.

The efforts of NAPSLO's Career Awareness Committee were also visible at the annual meeting, with the committee sponsoring the first-ever Under 40 Reception for younger members.

The committee, which was spun off last year from the Communications & Technology Committee, is charged not just with the task of attracting young people to various disciplines in the surplus lines industry, but with championing with career advancement for younger NAPSLO members.

More than 200 young E&S professionals attended the Under Forty reception, according to Event Co-chair Kristen Taylor.

“We're looking to poll the group to see if there's an interest in a permanent under-40 group,” said Ms. Taylor, national marketing director at USG Insurance Services in Pittsburgh, before the event.

She distributed a questionnaire to learn what young attendees want from NAPSLO in the way of activities, regional events, a separate Web site and networking opportunities with peers.

In addition, the Career Awareness Committee worked on campus recruiting, a recruiting video and a job portal, this year according to the committee's chairman, Steven Gross, who is also CEO of Metro Insurance Services in Springfield, N.J.

Focusing on the ongoing education of participants in the surplus lines segment of the industry, the NAPSLO schools are making some changes as well, according to Ms. Rozzell, NAPSLO's outgoing president.

Ms. Rozzell said NAPSLO's education committee, collaborating with the American Association of Managing General Agents this year, has worked to introduce continuing education credits for the NAPSLO E&S and Advanced Schools.

In addition, NAPSLO is also working on a senior symposium which is slated for February 2009, she said.

The symposium will be geared to potential “C-levels” identified by companies, she said, adding that the symposium is set to take place at the University of Virginia.

(Additional reporting by Susanne Sclafane and Caroline McDonald.)