Entering New Markets with Surplus Lines Carriers

[speckledpig]

Hi all,
I have been in the P&C business for over a year now; I got licensed and started last year at my father-in-law's independent agency here on the Alabama gulf coast.

I'm sure many of you realize that we are fairly limited in our markets here; many companies are not writing wind. Still, we have some good options and are writing business, so it could be worse.

The agency has been here for over 25 years. We have specialized in car, house, and mobile home insurance, mainly because we had been busy enough with that. However, we have some spare time now with the market down, so I am considering new markets (to us) such as commercial property and liability (and others).

My question is this:
When I look at writing business for these markets, I am first turning to our surplus lines and specialty brokers because I don't have any other options. We have underwriters such as Appalachian, Bass, and some others. One of my obstacles (and it may all be in my head) is completing the due diligence affidavits that accompany the applications. How do I know which markets aren't writing? Maybe I'm making a mountain out of a molehill.

I know that once I start writing some of this, it will get easier; it's just difficult to get over that hump.

I hope to get more acquainted with everyone and learn more through these forums. I'm glad I found this place.

 

[Hefe]

I think the only way to learn who is writing what is by trial and error, unless you have someone that has already done this in the agency.

Being a relatively new producer myself, I don't ever go straight to surplus unless one of the vets can tell me for certain that none of our admitted carriers will write the policy.

If it's a questionable risk, I typically send out an email to the admitted underwriters. If they all come back declined, I immediately have the info needed to complete the affidavit.

Aren't there admitted companies that you can get appointed with in your state? Maybe your personal lines carriers also write commercial lines.

 

[speckledpig]

Well, our location on the gulf coast doesn't help us much with options for admitted carriers.

I have asked our DOI's office for a list of Alabama admitted companies, but I never received a respose. Their website only lists all companies registered with the DOI, but makes no distinction between admitted and non-admitted.

 

[MDatlas]

I think the only way to learn who is writing what is by trial and error, unless you have someone that has already done this in the agency.

Being a relatively new producer myself, I don't ever go straight to surplus unless one of the vets can tell me for certain that none of our admitted carriers will write the policy.

If it's a questionable risk, I typically send out an email to the admitted underwriters. If they all come back declined, I immediately have the info needed to complete the affidavit.

Aren't there admitted companies that you can get appointed with in your state? Maybe your personal lines carriers also write commercial lines.

There are also state specific laws to use surplus lines. Here in MD you can't go directly to a surplus line carrier untill the applicant has been denied by three standard carriers. The law is in place since surplus lines are less regulated.

 

[speckledpig]

So far, all of the due diligence forms I've encountered include a minimum of three companies which denied the applicant.

That's not a problem for our homeowners markets, but when it comes to other markets I am clueless. I will try the DOI again for a list of admitted companies and go from there.

 

[allbusiness]

I am having the same problem with the diligence form. Were you able to find anything? I am currently not working with any admitted carriers.. and like you really have no idea who to turn to to get the declinations. Thanks!

 

[jhuang]

Get in relationship with some admitted markets that are captive. Allstate, State Farm, Farmers for example. Build a relationship with them and ask them for risks that they can't place that you can help them with. Most of the time, if they can't place it, it's will have to go surplus lines.

 

[Bertolinoins]

It is simple... go to three admitted markets and see if they will write the policy... they will decline it due to UW reasons (they don't write wind in your area) and there you go... fill out every form with those 3 carriers including UW contact info stating it is declined for UW reasons. Don't submit accounts know they will not write it, just get a single email confirmation from your Travelers, Safeco, metlife, Hartford, etc UW stating they are not a market.

 

[speckledpig]

Wow, figured this thread was kaput.

Thanks for the suggestions, everyone. This is very helpful. I figured there were more independent agents out there who were dealing with this.