American Safety Insurance

Rough Notes, Sep 2006

When American Safety Insurance (ASI) entered the program business market in 1996, one of its first ventures was a pest control program for a small insurance company in Louisiana that was looking to expand into other states, according to Brad Isaacson, director of program business for ASI. "We have since expanded our program writings, finishing 2005 with 10 programs and over $85 million in gross written premiums," he says. "We look for programs that generate between $5 million and $20 million in written premiums, where the program manager has an established track record of underwriting a specialty book of casualty business and is willing to participate in the underwriting risk. Since we mirror ASI's strategy, which is to deliver insurance solutions for specialty risks in underserved markets, we've had our greatest success in the smaller, $5 million to $10 million range as that is the area that is underserved in the program marketplace."

Isaacson says that ASI has two core segments. "The first is its excess and surplus lines segment, which includes construction, environmental liability, surety and a specialty casualty unit that focuses mainly on products liability and excess and umbrella coverages. The second division is the alternative risk transfer segment, which includes our fully-funded and our specialty programs units," Isaacson explains.

"Our environmental line provides general, pollution and professional liability for environmental contractors and consultants as well as pollution for fixed sites such as storage tanks, real estate property, manufacturing facilities and storage facilities," says Isaacson. "We also offer contract surety bonds for environmental contractors and consultants. This business is written through various retail and wholesale brokers and is underwritten by experienced environmental underwriters employed by ASI.

"Our construction line of business," continues Isaacson, "provides primary and excess general liability primarily for construction risks not being adequately served by the standard markets." The unit also provides general liability for habitational risks. These accounts, which are underwritten by ASI underwriters, are placed through selected wholesale brokers.

Isaacson says that ASI's typical program is a general or professional liability program. "We have a total of 12 active programs. Some examples of the programs we have in force are general liability and pollution for pest control operators; real estate agents E&O for small real estate agencies; bail bonds; package liability for small excess and surplus lines risks; general liability for residential general contractors; general liability for senior independent living facilities; and miscellaneous errors and omissions."

ASI can write programs in any of the 41 states in which American Safety Indemnity Company is approved as a surplus lines carrier, says Isaacson.

According to Isaacson, the soft market has not materially affected ASI's business. "ASI seeks to write casualty business in underserved markets where there is less competition," he says. "These classes are usually the more difficult to place risks and are not adequately being served by the standard markets. While overall conditions in the casualty insurance market have softened, we have not experienced the same degree of softening due to the specialty nature of the business we write," he says.

Isaacson also says that ASI is actively seeking new program opportunities. "We still see program business as an excellent means to identify new special niche areas that can enhance ASI's position as a leading provider of insurance for specialty risks in underserved markets. We are interested in partnering with program managers that have proven underwriting expertise in specialty markets."