Automotive Risk Management & Insurance Services, Inc. (ARM)

Rough Notes, Sep 2005

Automotive Risk Management & Insurance Services, Inc. (ARM), with headquarters in Stockton, California, is a founding member of the Target Markets Program Administrators Association. "We were there in the initial formative stages," says Marvin McDougal, president & COO of ARM.

"The Target Markets Program Administrators Association is among our most valuable assets in that it brings us together with other program managers, the carriers that are interested in program business, and others who have operations related to program business, all of which builds familiarity and respect." In addition, being able to communicate with the retail brokerage body through Target Markets enables us to create substantial interest in our programs. We receive a number of inquires from retail brokers and agents almost every day, which has been quite beneficial to us, and all at a reasonable cost."

ARM is owned by Don Marlette, chairman and CEO; Marvin McDougal, president and COO; and Julian Street, director of loss control. Marlette started his insurance career when he joined his family's agency in 1946 and has been involved in the auto dealer business since the mid-1950s. McDougal began his insurance career at Universal Underwriters in 1962 and has been involved in the auto dealer business ever since. ARM was started from scratch by McDougal in the early 1990s, with Marlette joining in 1996.

ARM is the outgrowth of operations started by Mariette in the late 1970s as part of the Frank B. Hall organization, the successor in interest to Mariette Insurance Agency. McDougal joined Hall in 1980, and together McDougal and Marlette expanded the operation to over $100 million in annual premium volume in auto dealer-related property/casualty business on a nationwide basis. The Hall operations were sold in the late 1980s.

"A number of the present ARM staff have been with us since the very early days of the Hall operations," says McDougal. "Cathy Whitby, senior vice president and underwriting manager, and John Krivacsy, president of Meridian Claims Service, an ARM affiliate, have been involved in the operations for over 20 years and have extensive experience in this market on a nationwide basis. Other key staff members have been involved in these operations for many years." Day-to-day operations are carried out under the direction of McDougal.

ARM is dedicated to providing coverages and services to the franchised automobile and truck dealer industry, and to other garage-related business such as used autos, trucks, truck tractors, RV dealers, towing, salvaging, valet parking, and auto service and repair shops.

ARM's authority varies by program and usually includes production, underwriting, rating, policy issuance and service, claims, loss prevention and control, statistical and accounting, and regulatory compliance. All of ARM's carriers are rated A- or better by Best's, including CNA for the franchised dealer package, AIG and Interstate Indemnity for umbrellas, and other specialty carriers for EPLI, crime, pollution and dealers open lot. Other garage and service facility risks are handled by Colony and Sequoia.

"ARM also has a very active and disciplined loss prevention and control program, which has been very successful, and we have found that our clients not only appreciate this program, but they corne to rely on it," says McDougal. "This program has also become a great selling tool for us."

Through its affiliated company, dbCache, ARM has developed a state-of-the-art DataTracker Web-enabled system, which is an outgrowth of the system created in the early 1980s at Hall. The system is specifically designed to carry out the functions of ARM's programs, and extensive loss prevention and control information is available on ARM's Web site (www.armonline.com), McDougal says. The DataTracker system includes a module that automatically orders and tracks MVRs, greatly reducing both the acquisition and handling costs of the thousands of MVRs reviewed monthly by ARM, he says.

"Target Markets has brought a great deal to ARM, and we feel that ARM has brought some added value to Target Markets," McDougal observes. "Again, we at ARM feel that the bringing together all of the various functions of handling program business is extremely valuable."