There are many stories in this industry about people who thought they were on a satisfying career path to one career and found themselves through some quirk of fate in the insurance industry. A similar story holds true for the incoming president of the National Association of Professional Surplus Lines Offices.
"I'm a somewhat unorthodox insurance person in that I entered the insurance industry in my mid-40s," said Letha E. Heaton, vice president of marketing for Admiral Insurance Co., a member of Greenwich, Conn.-based W.R. Berkley Corp.
Coming from the pharmaceutical and medical device industry, she had no idea what the excess and surplus lines industry was and had to do some research on it before interviewing with her first insurance industry employer, Markel.
"One of the things I loved about my first career was that it was very diverse," said Ms. Heaton. "You worked with virtually every industry in the United States and no day was the same as the previous one. That has been pretty much similar in working with the surplus lines industry. It is very diverse and interesting portion of the insurance industry, albeit because we deal with the new, the different and unusual every day."
She entered the insurance industry in 1993, she entered the insurance industry, becoming Markel's managing general underwriter's Shand Morahan division vice president of marketing.
Ms. Heaton said she took to her new position quickly, saying the company was a great mentor and that she learned a great deal. The one thing that surprised her about the business was her relationship to the end customer. In her former job, she said she could meet with a doctor "and tell them about your value," something she learned she now was unable to do.
"The big challenge is to get your story told," explained Ms. Heaton. "When you can't talk to the person who is buying your product, because you are prohibited by law, [that's a challenge]."
There were other surprises, such as how difficult it is to earn a profit in the E&S side of the business and that the final cost of your product is not established until it is bound.
In 2009 she decided she wanted to make a change, and after interviewing with a few insurers she accepted an offer from Berkley.
Her involvement with NAPSLO began in 1998 working on a number of committees over the years. She became Secretary last year and would have been next in line to take the position of vice president. However, with the resignation of Timothy Makowski, Ms. Heaton moved up to assume the presidency.
When asked about Mr. Makowski's leaving the association, Ms. Heaton said, "He resigned for personal and professional reasons after making significant contributions to the board."
Participating In Growth
Over the years, Ms. Heaton has seen a few changes in the E&S industry. It has become a more established and accepted option despite the unregulated portions of it, she noted.
For new and emerging risks, the standard market, aided by technology, is becoming less of the place for those exposures, primarily those new, innovative and expanding programs in the technology and medical fields.
"The rapidly growing segments of our economy are those segments that really drive the economy and generally present new exposures with the need for insurance coverage that doesn't exist in the standard market," she said.
She believes that passage of the Non-admitted Reinsurance and Reform Act is a validation and recognition of the importance of the E&S business.
"I think we have been recognized as a robust requirement for business that wants to bring innovative new products to the marketplace," she said.
As president, she said there are two major priorities that need to be dealt with in the coming year.
The first is implementation of the NRRA and ensuring that the states properly carry out the collection of taxes through a single state filing.
"We need to make sure that we do everything we can to assist the states in developing a multi-state pact," she said.
She said the law creates efficiency for distribution and "that should result in [the industry being] better and more responsive" to consumer's needs. It should also make E&S lines more efficient and cost effective.
"It is something we have wanted to bring to the table for many, many, many years," she said.
NAPSLO will aim to assist helping states to implement the law and work to eliminate any conflicts between the states. But overall, a huge burden has been lifted from the shoulders of surplus lines companies.
"As written, once the wholesaler does their filing in the state of domicile, they are done with the process and we want to protect that," she said.
The second priority will be to find a replacement for long time Executive Director Richard Bouhan who plans to retire in the next two to three years.
"We have the incredible challenge to find a replacement or replacements," Ms. Heaton advised. "He has been the face of the association for 25 years. He has been the legislative advocate for the wholesaler and E&S insurance companies. He has run the staff with grace and efficiency and delivered great value to the membership."
Because he has meant so much to NAPSLO, the transition to a new administration "will be a major focus of my term," Ms. Heaton said.
A task force will be formed consisting of Mr. Bouhan, past-presidents, members of the current board and herself to review candidates and find the right fit.
The task force will also determine if the role of the new executive director should be redefined and what the new administration should look like.
"We may not find one person to step in those three roles that [Mr. Bouhan] has filled so well," she noted.
As for the future of the wholesale industry, she is very optimistic about its survival and prosperity.
"I think when you look at the industries that will survive and prosper, regardless of what market cycle we are in, those that are able to innovate continuously will thrive," Ms. Heaton observed, "and the E&S business has built that into its fabric."
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