Over the years, we have turned to the expertise of 
In this issue, we spoke with Jerid Schmickle, Senior Vice President of Alive Risk, a new division of NAS that specializes in the Entertainment/Sports/Live Events industry. We spoke about the industry's exposures, and the capacity gap that exists. NAS, based in Encino, California, is an independent underwriting manager that has developed leading-edge specialty products for more than 30 years. Alive Risk is a new NAS division created to further the company's commitment in providing specialty insurance for a broad range of live event risks. Along with the establishment of the new division, Tim Troester also joined the group as Vice President bringing with him a wealth of experience in this specialty niche.
Jerid started out in the insurance industry in 1996 where he worked for Fortune 500 companies on every aspect of the production side of insurance, including in programs, risk management, and underwriting. He has extensive experience in the Entertainment & Sports niche, having worked in the past for Fireman's Fund as a director for its Entertainment and International division. Jerid joined NAS in August 2011 bringing with him a wealth of knowledge to properly address the exposures of this industry. He and the NAS team have worked on insuring some of the largest events in the world in addition to providing risk control for live performance stunts and pyrotechnics.
Alive Risk provides programs and products for athletes, artists, entertainers; promoters and producers; special events; touring and theatre groups, concessionaires, exhibitors, and vendors; sports and recreation; venues and music clubs; among other classes of business. In addition, with Alive Risk, NAS provides custom policies when required.
Annie George (AG): You recently rebranded your Entertainment and Sports program as Alive Risk. Tells us about that?
Jerid Schmickle (JS): "The Alive Risk name perfectly expresses our commitment at NAS to personal service, underwriting, creativity and passion for what we do in the Entertainment, Sports and Live Event niche market. We wanted to differentiate ourselves and underscore our commitment to the growing demand for specialized live event insurance coverage to our agency partners and to the industry as a whole with our new division and brand."
AG: What would you say is the biggest challenge today for those looking to insure risks in Entertainment and Sports?
JS: "There are capacity issues and tremendous liability needs in Entertainment/Sports/Live Events sector. Generally, accounts can require limits from $50 million on up for sports teams, A-list celebrities, athletes, and a number of other different risks that make up the industry. In recent years, based on the increased cost of capital, many insurance carriers that have previously provided this capacity have pulled back and are providing $25 million and even $10 million in limits. Some may still provide the limits on lucrative, large accounts, but we're in a different world today where many insurers are not offering these high-capacity limits.
"Take the stage collapse and tragic deaths that occurred at the Sugarland concert at the Indiana fair in 2011. An insurer doesn't want the entire exposure for this type of incident. So limit management is in place by most of the admitted domestic carriers that control the majority of the primary business in this realm.
"At Alive Risk, our facility can fulfill the gap. We participate from the primary coverage on up. Our sweet spot is between $10-$30 million. Other insurers will then come back in with coverage over that $30 million limit in $25 million increments."
AG: How come you are able to fill those needs?
JS: "Due to our experience, we have a clear view of this niche and understand what type of hits we can take. In the first year, we limited our exposure to a couple of million dollars for the primary coverage and up to $5 million in excess coverage. This year, we're increasing our limits and as our facility grows we'll continue to do so. What's more, we stick to our underwriting principles, and work with brokers that concentrate in this area."
AG: What types of exposures are inherent in this niche?
JS: "It's a liability-driven business. There are all types of incidents that can occur; for example, let's take a concert. Promoters take on exposures, the band and their entourage carry many liability issues, and the tour company is exposed. Liability exposures can involve something as simple as a drumstick being thrown out in the crowd and injuring someone to what occurred with Guns ‘n' Roses in the 1990s when a riot was incited. Promoters, in fact, take on a lot of the liability, serving as a buffer between the entertainer and tour company. The liability exposure will ultimately be dictated contractually.
"You also have Inland Marine exposures. For the film industry, concerts and festivals, there are many types of equipment and instruments that travel from place to place therefore you have geographic and weather conditions attached to the risk. Inland Marine has become particularly more competitive and challenging due to erratic weather patterns and unpredictable storms that can result in cancelled events."
Jerid also explains that Alive Risk provides unique opportunities to craft custom policies for groups that need them. "There are so many unusual accounts that fall outside the box, that don't quite fit into a specific risk. For example, you may have a firm that is a combination film and event company - it needs coverages that can't be covered with a standard ISO package policy. We can provide the firm with products through the open market. That's why we are such strong advocates of Lloyd's, which provides us with our Liability and Inland Marine products. We also can write Accident & Health coverage.
"Our success also has led us to work with brokers that have books of business requiring program development and a partner that can provide capacity for unique and unusual risks. We're currently working on two programs with brokers - one is in the Sports and Recreation arena.
Alive Risk also provides online capabilities that simplify the submission process. "And our team is incredibly responsive, we can turn around very complex accounts within hours."
Alive Risk products are available on a national basis and are open access. For more information about Alive Risk, please contact: Jerid Schmickle at (952) 657-5739, jerid@aliverisk.com or Tim Troester at (503) 906-7825, tim@aliverisk.com.