United brokers focuses on transportation business

Rough Notes, May 2002 by Zinkewicz, Phil

In soft markets and hard markets, MGA emphasizes strong relationships with retail agents

There is a kind of chain of communication in the property/casualty commercial insurance marketplace. Starting at the top, there are the reinsurers who, via various intermediaries, communicate to primary insurers what coverages they are willing to write, under what terms and for how much. Primary companies then communicate with their producer forces to let them know what they are willing to take on in terms of exposures, basing their decisions on reinsurance availability and costs. The producers, particularly those that deal directly with consumers, then have to communicate to their clients the reasons for any price increases and coverage restrictions-not an easy task after so many years of soft market conditions.

In fact, in that chain of communication, the retail agent probably has the most difficult job, according to Tony Glotzbach, CPCU, president of the New Albany, Indiana-- based United Brokers, Inc. United Brokers, CMGA is a managing general agency (MGA) that specializes in the transportation industry, but which writes other lines of business as well. "In today's hard market, the retail agent has to do more than just explain to clients, who have enjoyed 15 years of soft market conditions where prices were low and coverage conditions were generous, why insurance company markets are raising prices significantly or no longer want their business at all," says Glotzbach. "The retail agent then has to canvass the marketplace to find new companies willing to take on their clients. At least in that last task, MGAs can demonstrate that they play a vital role in assisting agents in effectively placing business."

Glotzbach's assessment of the property/casualty commercial lines insurance marketplace is more than a fairly accurate one. From the late 1980s up until 2000, the P-C marketplace had remained extremely competitive. During those times, a good deal of business that had traditionally been placed in the surplus lines arena found its way into the standard market, of course at lower prices. Property/casualty insurance companies were eager to attract additional premiums in order to invest in a booming stock market, and to take advantage of large investment gains.

For a while, it appeared to most insurance industry solons that the industry never again would see an overall hardening as it had in the past. But the insurance marketplace began bottoming out in 2000, due to a faltering economy and a downturn in the stock market; and there were signs that insurance companies were returning once more to sound underwriting practices. Then came September 11, which not only changed the face of the nation, but which also brought about a hardening of the property/casualty insurance marketplace, the likes of which had not been experienced since 1984-85.

"Retail agents are on the front lines," says Glotzbach, "but the good news is that they have the backing of a strong MGA community to help them. As an MGA, we've built up strong relationships with our underwriting companies over the years. We will be there for the retail agent now when he needs us most."

United Brokers was started in 1983 as a general commercial lines insurance agency. By 1985, it had begun its metamorphosis into an MGA, specializing in the transportation industry. "Today, fully 70% of our business is in the transportation arena," says Glotzbach. "The rest of our business is in commercial property insurance, general liability, commercial auto and professional liability."

United Brokers operates in Indiana, Kentucky, Ohio, Tennessee, Georgia, North Carolina, and West Virginia. The firm has contracted with 200 to 300 agents in each state. How did United Brokers find its way into the transportation industry? According to Glotzbach, it was just a question of being in the right place at the right time, a lot of work and some luck.

"By 1985, the property/casualty marketplace had begun to harden significantly," he says. "We got a call from an agent whose client wanted truck physical damage coverage. Through an old relationship we found a market. As the market hardened further, we began to get calls from other agents who wanted our coverage. Today, we are involved in every line of transportation coverage."

Amy Zettel, vice president of United Brokers, and the lead underwriter for all of the company's transportation exposures, says that the company's growth pattern over the years has been steady, primarily because of United Brokers' emphasis on quality and its determination to meet its customers' expectations. In addition, she says that the MGA has worked hard to earn first shot at the business of its agents.

The products which United Brokers specializes in include: physical damage for truckers, cargo for truckers, primary liability for truckers, non-trucking liability, property, general liability, garage liability, inland marine, warehouseman's legal liability, agents E&O, real estate agents E&O, nonprofit D&O and for-profit D&O, employment practices liability, liquor liability, consultants professional liability, personal and commercial umbrellas and business auto. In addition, United Brokers also has special programs for alarm installers, restaurants, bars, taverns, contractors, vacant buildings, beauty shops and salons, day care centers and, of course, trucking.