Hull & company "tames the lions" for almost 40 years

Rough Notes, May 2001 by Zinkewicz, Phil

Hull executives discuss the ways the surplus lines business will meet new challenges

Chris Hull, vice president of business development for the Fort Lauderdale, Florida-based Hull & Company, Inc., believes that the surplus lines business in the United States is "greatly under-- appreciated." He likes to compare surplus lines to lion taming. "You can't throw a lion into a cage full of pussycats and expect it to be handled in the same way," he says. "It is basic that a risk that has a high loss profile, or is esoteric or unique in nature, has no business being grouped with risks that do not have a higher loss potential or that are vastly similar in nature. That one risk can force anything from increased premiums on the whole group to financial instability for the carrier. These situations negatively affect the consumer. Surplus lines allows those risks to be handled in a way that can help the particular insured while protecting the larger group. We (surplus lines agencies) are the lion tamer of the industry, utilizing our skills, creativity and freedom to control the lion and protect the pussycats."

Hull & Co., which was founded by Chris' father, Richard Hull, will celebrate its 40th anniversary next year. It is privately owned and, in addition to its home office and five branches in Florida, has 11 branch offices in eight states - Texas, California, North Carolina, South Carolina, Nebraska, Hawaii, Montana, Washington and Colorado. Although these are Hull's primary geographic areas, the firm is also active as a managing general agency (MGA) and wholesale broker in other states.

Mike Riordan, executive vice president, says that the lines of business that the firm is engaged in are numerous and varied. "We write monoline property and general liability and package policies for habitational risks such as hotels, motels, apartment complexes, mercantile risks, coastal/catastrophe exposed property, contractors, product risks and much more. Hurricane Andrew, which struck in our back yard, thrust us into the forefront of the Florida homeowners market. Now we write a significant book of homeowners and related coverages in Florida and the Carolinas and we're expanding our success in those states to others such as Texas, California and Colorado," says Mike.

In addition, Hull writes commercial auto-livery and intermediate and long-haul exposures.

"Hull has always been known for our marine products," says Mike. "We write boats, yachts, personal watercraft, marinas, marine contractors and products, boat repair yards and marine excess. Partly because of our name and partly because we tend to be somewhat 'low key,' many people assume it's all we do. In fact, while it's an important piece of the puzzle and we do a lot of it, it represents only around 5% of our total premiums."

Professional liability is another area to which Hull has made a commitment, according to Mike. "Our branches have written miscellaneous errors and omissions and directors and officers for years, but until recently we have never had a team that could innovate new solutions and get us into this business in a way that would add significant value to our customers. We do now. Future, and current plans call for significant growth in this area."

And growth seems to be high on the agenda for Hull & Co. Bill Simons, senior vice president and chief financial officer, says the year 2000 was a "banner year" for acquisitions by the firm. Two major acquisitions were completed: All American Agency Facilities of Denver and Unamark Underwriters of Fort Lauderdale. "These added many talented people and several key new markets to the Hull arsenal. Our philosophy on acquisitions is to buy those MGA wholesalers that can contribute to our bottom line and that can work with our culture. We are looking for self-starters who want to focus on growing their business, not managing the minutiae of accounting or human resources or any of those functions we can easily handle from our home office," says Bill. "We will continue our aggressive posture on mergers and acquisitions into 2001."

Another executive of Hull, Bob McGrew, senior vice president, sees today's insurance marketplace as "a very exciting one at this point in time, filled with challenges, opportunities and, yes, even some potential pitfalls for those who don't move with the changes taking place in the industry. There are changes on the regulatory front unlike any that have taken place before," he says. "Moreover, for the first time in 15 years we're seeing a hardening of the marketplace. There will be a good deal of rate increases, not in every class, but the cumulative effect will be a positive upward adjustment that, hopefully, will put the markets back on solid ground. As hard as that is to sell, it's in the best interests of all of 'us' consumers to have a financially stable marketplace. In addition, some of the more exotic risks (the lions) that moved into the standard market during the soft market period will be moving back into surplus lines."