How we surpassed a competitor by creating a better insurance product
Arrowhead’s Excess & Surplus Lines was barely a year old when Bill Murray, president of Arrowhead E&S, was approached by Peachtree Special Risk Brokers and Omni Insurance, an Atlanta retail agency, to create a better liability market for fraternities. Arrowhead is part of Brown & Brown National Programs.
“As you might imagine, fraternity liability is a very tough risk and difficult to place,” explained Murray. “The premiums were high from their former insurer, who wrote the policy on an occurrence-form basis. Peachtree was looking for a better liability market for national fraternities and their chapters.”
Murray, working with National Programs President and Arrowhead CEO Chris Walker, leveraged an existing relationship with carrier Transverse Insurance Group, who agreed to be the fronting carrier with Arrowhead E&S as the program administrator. They also brought in Lloyds of London as their reinsurer.
“Once Transverse came onboard, we went to high gear in terms of putting together the fraternity liability binder – all the forms for the policies,” recalled Rich Collins, vice president of operations. “We started the process in October 2021 and bound our first policies in early February 2022. That’s an amazing launch timeline, given the complexity of this product.”
Murray, along with Omni Insurance, structured the program on a claims-made, rather than an occurrence-form basis.
Writing the policies on a claims-made basis allowed them to limit the exposure on abuse and assault and battery plus reduce the premium, making much more attractive to Transverse as the carrier. In other words, in order for a claim to be covered, the incident must take place after the retroactive date of Feb. 5, 2022, and the claim has to be made during the policy period.
What challenges did you face along the way?
“The first hurdle was finding a carrier for a such tough risk and getting the fronting carrier, Transverse, to come on board,” Collins recalled. “The established relationship that National Programs and Brown & Brown already had with Transverse, opened the door for us.
“The second hurdle was finding a reinsurer for fraternity liability, which Bill was able to locate through a London broker,” he added.
But the biggest challenge, they agreed, was creating the binder, because all the forms are so detailed and complex. “This is a very large policy with numerous forms – 80-plus pages in length,” Collins explained.
Then they realized that for this first go-round, they needed to manually issue these very large policies. Since these weren’t being produced out of a policy administration system, there were greater chances of error. So they called in help from National Programs’ Shared Services. Teammates from the Program Management Office, Business Systems Analyst team, Accounting and Commercial Operations came together to carry the ball past the goal line.
How would you sum up the process?
“This was a very difficult risk to place, yet we were able to provide a new fraternity liability market in six months,” Collins said. “We saw an opportunity where current needs weren’t being met. Once we had created this solution, 20 of the 22 fraternities and their chapters who were insured with their former insurer cancelled their policies and came on board with us in February.
“Since we now have established ourselves as a solid market for fraternities, we’re open to looking at other fraternity-type exposures. And since we were able to go-to-market so quickly, with a preferable product, other retailers or brokers will contact us with risks for which they need a better market. And we’re certainly open to that.”