Posted on 06 Apr 10
In this edition we’re featuring Storefront Bunker Hill Insurance Agency (BHIA), a premier MGU and MGA located in Houston and Austin, Texas. BHIA has a nearly thirty-year history and in 2008 became a wholly owned subsidiary of Southwest Insurance Partners, Inc. (SWIP). SWIP was founded by Stephen Way who previously founded and managed HCC, as Chairman and CEO, for thirty two years. SWIP owns National Healthcare Insurance Company and Southwest Risk. BHIA is an MGU for Great Midwest Insurance Company, an A.M. Best A rated carrier also owned by SWIP. As an MGA, BHIA partners with QBE, Chartis, and Berkley Underwriting Partners to offer various key programs, including Senior Living, Churches, and Marinas. BHIA handles all claims activities for Great Midwest as well as for its third-party insurer affiliates in their respective markets.
We spoke with Arthur (Art) Seifert, who joined BHIA as CEO in October 2009. With more than 30 years in the insurance industry, Art began his career as a Property/Casualty underwriter with Reliance Insurance Company and later worked with a retail agency in Baltimore. He then formed his own company, working primarily with large trade associations putting together captive programs. In 1994, Art founded Lighthouse Underwriters and sold the company in 2006 to US Risk based in Dallas, Texas, where he served as president of US Risk Underwriters until joining BHIA.
In discussing BHIA’s culture and business approach, Art underscores the company’s underwriting experience. “Because of BHIA’s history as an MGU for Great Midwest our underwriters think of themselves as company underwriters whose primary objective is to generate an underwriting profit for insurers…and that’s both for Great Midwest and our third-party affiliates,” says Art. “What’s more, we develop products that independent agents are proud to sell, products that have true value incorporated into them so that they [agents] have something new and worthwhile to offer. We also respond with a sense of urgency to the agents’ needs…everyone at BHIA provides the type of service that allows our agents and us to gain business. We strive to get it right the first time so we don’t waste valuable resources. We’re small enough to listen, and can be very flexible.”
Art also emphasizes BHIA’s commitment to developing programs for profitable niches. “These programs can be state, regional, or national with an opportunity to generate a profit,” says Art. “We don’t have huge overhead to support so we can bring a program to market cost-effectively.”
BHIA is expanding its footprint both as an MGU and MGA. With Great Midwest, BHIA researches certain classes of business to determine their market potential and profitability for a new program. The program is then rolled out and incubated primarily in Texas where filings can be accomplished relatively economically and expeditiously. “A good example of a new product we’re rolling out and incubating in Texas is our CNC Tool Pro, designed for machine tool shops,” says Art. “There are about 8,000 shops in Texas, and we created an innovative product for this sector from the ground up. We have included several additional specialty coverages on a sub-limited basis that differentiates the product from what’s currently available in the marketplace. We’ll begin the program In Texas, a big enough state and market, which gives us broad enough representation of how our product will perform. Once we incubate the program here and learn the lessons we need to learn, we’ll roll it out to other parts of the country geographically, based on the regulatory and legislative favorability of each state.”
As an MGA, BHIA is expanding its Marinas underwriting expertise via its relationship with Berkley Underwriters Partners. “We have been writing this market in certain states with Great Midwest for years and have done extremely well,” explains Art. “We want to expand the program to the West Coast and have an opportunity to do so with Berkley.”
Additionally, BHIA has expanded its underwriting expertise on a national platform in the Senior Living market with QBE. “We write this market with Great Midwest in six to seven states and now are expanding our geographical footprint with QBE,” says Art. “We are also in the process of expanding our Church program nationally with Chartis.”
BHIA is creating opportunities to generate the same underwriting success that produced a 22% loss ratio over ten years in the states that it has served to other states and with other insurers. “In January-February, we saw a 227% growth year to date, primarily generated from new products. And during the first two months of this year, we have also seen significant growth over last year in existing classes, and the underwriting profitability is as good or better as well,” says Art.
BHIA’s marketing efforts include conducting regional email campaigns to the ProgramBusiness members as well as to the company’s internal database. “We also do some print media advertising and publish articles as often as possible,” says Art. In 2010, BHIA refocused its participation in industry-specific trade associations to attending state insurance associations. “We find that attending state PIA or IIAA association meetings is more effective; they’re more intimate and attract agency principals so it’s a great venue to have face-to-face time with them and show them what we are doing, solidify relationships.”
Additionally, BHIA has an aggressive face-to-face marketing program in Texas. “We require our underwriters to conduct a minimum number of agency visits each year. It’s expensive but effective. Our agency visitation initiative is lead by our president, Byron Way. He just spent a week in California visiting twelve agents over four days and coming back with submissions; he is great at shaking the tree and driving submissions”.
BHIA is unique in that it’s closely affiliated with its carrier, Great Midwest, serving as the insurance company and conducting underwriting, filing, loss control, and claims servicing and management. “For retail agents looking for an MGU with a great deal of flexibility because of our broad underwriting control, we’re a very attractive partner,” says Art.
For more information about BHIA, please call Art Seifert at 713-935-7400 or email him at email@example.com.