Crum & Forster Holdings
($ IN MILLIONS)
STATUTORY
June YTD
2012
2011
2010
2009
2008
2007
GPW
$776.7
$1,327.4
$890.2
$865.5
$1,025.8
$1,244.2
LOSS & LAE RATIO
70.0%
73.4%
73.0%
72.2%
80.8%
63.6%
EXPENSE RATIO
31.7%
32.7%
34.9%
37.5%
34.3%
30.0%
AY COMBINED RATIO
101.7%
106.1%
107.9%
109.7%
115.1%
93.6%
$30.0
$14.2
$107.8
$154.0
$484.0
$191.7
NET INCOME
Gross Premium Written Mix
Specialty vs. Standard
2001
GPW: $827M
2006
GPW: $1,353M
2011
GPW: $1,327M
Specialty,
18%
Specialty,
44%
Standard,
82%
Jun YTD 2012
GPW: $776M
Standard,
24%
Standard,
25%
Standard,
56%
Specialty,
75%
Specialty,
76%
SPECIALTY GPW MIX (EST.2012)
Marine & Energy
2%
Fairmont Hawaii
3%
Security
4%
Other
2%
MAPS
5%
Environmental
1%
Fairmont A&H
25%
Seneca Property
6%
Umbrella/Excess
6%
Primary GL
21%
Seneca x Bail/Surety
10%
Fairmont Specialty
P&C
15%
Ted Camp
CoverXSpecialty
Department
Products
Customer
Primary Casualty
Primary GL (average
premium of $24K)
Contractors, manufacturing,
mercantile, hospitality,
habitational,
owners/landlords/tenants,
pharmaceuticals, contract and
research organizations
Excess Casualty
Excess & umbrella (average
premium of $21K)
Contractors, security related,
hospitality, habitational,
owners/landlords/tenants,
entertainment business, special
events venues
Security
Primary GL (average
premium of $5K)
Security guards, alarm installation
and monitoring, fire suppression
contractors
Binding Authority
Monoline general liability,
package policies (average
premium of $2K)
Crisis Management
GL (average premium of
$72K)
Distribution Source
2011 GPW
($ in millions)
Produced through wholly-owned
distribution platform (CoverX) and
third party wholesalers
$220.7M
$67.1M
Wholesalers, Retailers
$44.3M
Artisan contractors, various
mercantile, restaurants,
habitational, offices, vacant
buildings
Wholesalers
$16.6M
Consumable products, supplier &
component parts (e.g., companies
that supply, process,
manufacturer, distribute,
import/export bottle, etc.) local,
regional and fast food restaurants
Wholesalers
$16.6M
Overview
•
•
We offer specialty commercial insurance products through 11 offices in the
United States
The E&S casualty operations of Crum & Forster, Seneca, First Mercury and
Valiant have been integrated into a $380+ million GPW business unit,
referred to as CoverXSpecialty
Programs, 2%
Other, 5%
Manuf acturing,
8%
Binding Authority, 4%
Crisis Management , 4%
Hospitality, 7%
Habitational,
5%
Security Primary, 11%
Primary Casualty, 57%
Other, 13%
Excess Casualty, 17%
Contracting,
67%
2011 GPW: $386M
2011 GPW by Top 10 States
Texas, 16%
Other, 29%
California, 14%
Indiana, 2%
Arizona, 3%
Massachusetts, 3%
New York, 13%
New Jersey, 4%
Louisiana, 4%
Colorado, 5%
1Top
Florida, 7%
five classes in CA are security guards, roofing contractors, manufacturing, concrete/masonry/paving contractors
and safety contractors
Gary Dubois
Seneca
Existing Product Lines
Standard lines
• Commercial Package/BOP
• General Liability
• Umbrella
Custom Property
• E & S Property
• Inland Marine
Surety
• Bail Bonds
• Contract & Commercial
Department
Commercial
Package
Policy/BOP
General
Liability
Products
Standard package policy
Average premium size is $12K
Standard ISO forms
Average premium size is $5K
Customer
Commercial real estate Mercantile
- Mixed Used Light Manufacturing
- Vacancies, foreclosures
Distributors
Wholesalers
Distribution Source
2011 GPW
($ in millions)
Open Brokerage
Commercial real estate Mercantile
- Mixed Used Light Manufacturing
- Vacancies, foreclosures
Distributors
Wholesalers
Umbrella
Written in support of the General liability or the
commercial package limits to $5M
Commercial real estate Mercantile
- Mixed Used Light Manufacturing
- Vacancies, foreclosures
Distributors
Wholesalers
Standard Lines
$106.3M
Inland Marine
Admitted and non admitted products.
Average premium is $25K
Builder’s risk/Installation
Motor truck Cargo
Warehouseman’s legal liability
Contractor’s equipment
Rigger’s liability
Fine Arts/dealers
Fixed and mobile medical equipment
Wholesalers
$11.4M
Custom
Property
Coverage is provided using ISO forms; In House
capacity up to $25,000,000. Primary and excess
layers are available.
Vacant properties, Association coverage
Receiverships, Nursing Homes
Manufacturing, Student Housing
Mercantile, Hospitality, Residential,
Bars, Night clubs, Restaurants,
Warehouses
Wholesalers
$36.1M
Surety
Bail Bonds
Contract & Commercial
$5M Single
$10M Bonded aggregate
General Construction, Paving/Milling,
Mechanical, Electrical, Utilities,
Excavation, Abatement, Service
Contractor’s
Bail Bonds- Managing General Agent
$4.7M
Contract & Commercial - Open Brokerage
Steve Fomchenko
Custom Property & Inland Marine
Product Lines
Inland Marine $11.4M
2011 GWP -$47.18 M
Department
Custom Property
Products
Primary Limits - $25,000,000
Excess limits - $10,000,000
Class of Business
Vacant properties, Association Coverage,
Receiverships, Nursing Homes, Manufacturing,
Student Housing, Mercantile, Hospitality,
Residential, Bars and Nightclubs, Restaurants,
Office Buildings, and Warehouses
Difference In
Conditions
Earthquake
Flood
All classes
Inland Marine
Builder’s Risk/Installation
New construction, renovations, rehabs
Contractor’s Equipment
Cranes, surface mining, oil and gas contractors,
equipment dealers
Motor Truck Cargo
Warehouseman’s Legal Liability
No commodities exempted
Dry and Cold Storage
Profit Centers
Northeast
Southeast
Midatlantic
Central
Western
All Regions except Western
Region for California
Earthquake
Countrywide
Inland Marine -Countrywide
Jack Moran - jmoran@senecainsurance.com
Northeast- Kathleen Alicks
Kalicks@senecainsurance.com
Western Region - Ken McClelland
Kmcclelland@senecainsurance.com
Central Region – David Hansen
Dhansen@senecainsurance.com
Midatlantic- Tom Diaczynsky
TDiaczynskysenecainsurance.com
Southeast- Joe Stanton
Jstanton@senecainsurance.com
Growth Opportunities
• Continue to offer participation on Primary/100% basis
• Expand product capabilities to participate excess of a primary
• Increase capacity on DIC Product to $10m
• Expansion into the Western Region
Gary Dubois
MAPS
Product Lines - MAPS Division
Large Accounts –
Lori Marino, SVP
Middle Market Accounts –
Don Fischer, SVP
Management Liability
•
•
•
•
•
•
Management Liability
D&O/EPL/FID
• D&O/EPL/FID
Lawyers Professional
• Lawyers Professional
Accountants Professional
Miscellaneous E&O
• Miscellaneous E&O
Cyber/Technology Professional
• Programs
Crime & Fidelity
— Amerinst Accountants & Lawyers
2011 GWP: $15.3M
— Managed Insurance Services (MIS)
— United Specialty Services (USS)
2011 GWP: $18.9M
2011 TOTAL GWP: $34.2M
Looking Forward - MAPS Division
• New head of Crime & Fidelity hired fall of 2012 to support
growth potential
• Cyber Liability resources in place for anticipated demand
through 2013
• Considering select opportunities within the A&E
marketplace
• Evaluating possibilities of geographic expansion into and
through 2013
Diana Cossetti
Umbrella/Excess
Umbrella/Excess
Internal Goals attained and ongoing:
•
•
•
•
One set of policy forms - E&S
One set of guidelines – all
Unified file documentation/pricing model – all
Field authority - all
Looking Ahead:
• Growth goals for both admitted and non-admitted
• Expand our writings in our Targeted Segments area
• Increase our physical presence in marketplace
Chris Pluchino
Marine & Energy
Department
Products
Customer
Distribution Source
2012 GPW
Q1&2
($ in millions)
Ocean Marine
Property, liability, cargo
and hull (average
premium of $12K)
Cargo, commercial vessels excluding blue
water, ship repairers, terminals, marine
contractors, vessels under construction
Regional brokers,
National brokers,
Wholesalers and MGU
$9.3M
Exploration &
Production
Property, control of well,
liability and business
interruption (average
premium of $170K)
Companies engaged in the exploration
and production of Oil & Gas with
operations principally located offshore,
offshore commercial construction
Wholesalers, National
brokers, Regional
brokers
$7.7M
Onshore Energy
(future segment)
Property focused
including business
interruption and
construction
Product launch delayed due to overly
competitive market conditions/prohibitive
underwriting environment for a start up.
Wholesalers, National
brokers, Regional
brokers
$0.0M
Overview
Underwriting strategy
• Focus on differentiating risks via an engineering informed underwriting process
• Underwriting appetite reflects an expertise-based segment avoidance strategy
— For example, in ocean marine – blue water hull not written owing to
undervaluation of exposures/inadequate rates; in energy and production –
drilling contractors avoided due to, among other things, high value of
moveable assets (aggregation concerns)
• Superior on-staff expertise via market leading underwriters, qualified risk
engineers and claims professionals trained in maritime law
• Typically focused on small to midsized clients, avoiding major corporations
• Market entry for targeted classes via partnership strategy (MGU)
• Look to maintain portfolio balance by keeping maximum policy limit offered
within annual premium volume
Overview (cont.)
Catastrophe management strategy
• Line setting guidance in place based on specific account criteria such
as client size, maximum loss potential and cat exposure
• Maintain portfolio balance – per risk and portfolio / NAT CAT capacity
• NAT CAT monitored by region / segment / occupancy, set against predetermined loss thresholds
• Platforms scored based on probability of failure in major wind event
• Aggregate exposures measured, deterministically as the sum of all
limits and coverages, captured using industry software; Exploration
and Production: Open Xposure/Static Marine: Risk Browser/RMS
• PMLs, storm tracks, Lloyds Realistic Disaster Scenario run nightly
and/or as needed in real time
Second year of operation for C&F under the leadership of individuals
with a combined 27 years marine and energy underwriting experience
Ocean Marine
Exploration & Production
Construction
All Risk, 4%
Package,
30%
Hull & Cargo,
47%
Liability, 23%
Owner/
Operator, 96%
2012 GPW: $9.3M
(Q1&2)
2012 GPW: $7.7M
(Q1&2)
Mark Brown
Environmental Casualty
Products
Customer
Environmental Package with up to four
coverage parts (Pollution Legal Liability,
Contractors Pollution Liability,
Environmental E&O and Commercial
General Liability) (average premium of
$22K)
Environmental contractors or consultants, environmental
facilities, environmental products such as containment
equipment, innovative technologies such as waste
recyclers
Pollution Legal Liability (average
premium of $20K)
Waste management facilities, resource conservation
facilities, treatment storage and disposal facilities,
manufacturers, distributors, warehouses, above ground
storage tanks, real estate portfolios
Contractors Pollution Liability (average
premium of $13K)
Environmental remediation contractors, engineers,
storage tank operations, emergency response contractors;
non-environmental general/Artisan contractors, masonry,
roofing, paving contractors
Environmental E&O (average premium
of $22K)
Environmental professionals such as engineers and
consultants
Environmental Follow Form Excess
(average premium of $18K)
Coverage only written on supported basis in excess of the
products mentioned above
Distribution
Source
GPW
($ in millions)
Wholesale
(Closed Selected)
2011
$12.1 M
YTD Sept.
$20M
Mark LeBlanc
Crisis Management
What do we do?
recallPROTECT+
• Consumable Products (food, cosmetics)
• Consumer Goods & Products (hard goods, appliances, etc.)
• Supplier & Component Parts (tech and auto)
restaurantPROTECT+
• Restaurants Chains (fast food, chains, franchises)
Coverage:
•
•
•
•
•
•
First and third party recall costs (consumable, component)
First Party Business Interruption
Customer Loss of Profit
Brand Rehabilitation
Replacement Costs
Consultant Costs
Growth Opportunities
Restaurant Accounts:
• High per account premium
• No diversity
Consumables:
• Competitive landscape
• Coverage Constantly evolving
• Mature market place
• Knowledgeable buyers
• Knowledgeable brokers
Components:
• Adverse Selection
• Contract Requirements
• Heavy severity, light frequency
• Lonely landscape
Consumer
• More frequency than severity
• Limited exposure
• Limited need
Solutions:
Targeted Marketing
Spread the word
Mind the gap: avoid pitfalls
Flexible terms, know your competition
There are good accounts, find them
There are good buyers, find them
Underwriter beware
Determine the real need
Is the coverage being used correctly?
Know your exposure
Know when to compete
Avoid chasing down attachments
Potential for balance
Manage Capacity