PPEL (Protector Plan Executive Liability), the first executive liability product team at Arrowhead Programs, has partnered with SCOR to offer excess management and professional liability solutions and now primary solutions to private and non-profit middle market companies.
They launched their Primary offering in August 2023. We recently sat down with Greg Boornazian and Ben Young, VPs and executive underwriters, to discuss their Primary product launch and lessons learned along the way.
What need were you seeing in the marketplace?
Boornazian: More than a gap in the market with other competitors or with capacity, we saw the need for tailored policies and underwriting expertise in the middle market space.
Oftentimes our competitors focus their best underwriters and client tailored solutions on public and large private clients. Our underwriting experience as well as our support service teams have definitely given us a leg up on some of our competitors who offer a more standardized product to their middle market customers. We’ve certainly seen a softer market than three or four years ago, but we’ve grown significantly since our primary product launch in August 2023.
There’s plenty competition in this space right now. I’d say there are over 50 middle market D&O competitors. Some of them are well-established national carriers – household names – and then there are folks like us who are MGUs with fairly new capacity. The major differentiator for us as a new capacity MGU is our internal product development people, in-house claims administration and our operations team right next door.
We have the resources of one of those household name carriers, but also the nimbleness to operate like a new MGU. Probably the most impressive piece of all is the ability to have created our own primary product with a suite of over 300 endorsements. These endorsements have been crucial in helping us be flexible in writing numerous accounts. The ability to partner with an agent and tailor our products to their needs with our arsenal of endorsements allows us to quote quickly, which helps them – and us – gain new business. After all, the quotes that usually win are those that quote first.
Young: Because our product is highly specialized, a major part of distribution in our rollout was working with internal folks – Bridge Specialty. Right now, our business is predominantly wholesale. Rolling out our admitted filing will open additional doors for us, as they’ll be able to give a filed and approved solution to their clients in some of the less tough geographic areas, classes of business and such.
So, while we may see some additional distribution as a result of our admitted filing, we will continue to focus on a predominantly wholesale broker base with a limited and select group of partners.
Walk us through the process, from ideation to launch.
Boornazian: We were looking to expand our flexibility and our offering to the admitted space. It would be a differentiator for an MGU to have an admitted product. We started some of the pre-work over a year ago, working with the product development team to get the filings ready. Then we worked with our carrier partner to go through the filing process, submitted on a state-by-state basis. Next were the objections or approvals we received by each state. When these objections came through with a limit of five days to respond, we quickly adjusted our forms and our rating process so that we could access more business and more distribution in each of these states. Our goal is to get to 50 as quickly as possible.
Young: When considering your plan for launch, timely approval of an admitted product offering will be dependent upon the resources available. Make sure to consider the following high-level questions: Who is drafting the forms for the product? Who is responsible for rate/rule/form compliance with state requirements? Will your team be responsible for submitting the filing, or is your carrier partner handling it? Does the carrier have an in-house team, or will they use a third-party vendor? If a third-party vendor, will you have access to that team to ask questions/provide feedback? Who is responsible for responding to objections and tracking rate/rule/form approvals? Do you have a state priority filing strategy and how does it line up with your launch date?
How has your agility helped you gain more accounts?
Boornazian: Kudos to our product development team for manuscripting endorsements and drafting admitted forms. Other support teams helped us gain accounts too. For instance, one of our prospective insureds called our in-house claims department, asking questions about who we are and what we would do in certain situations. Shortly thereafter we got the bind order.
Young: Some program launches make it and some don’t. In my experience, you have the best path to success when the following teams are aligned
- Carrier with strong rating
- Product development team with in-house legal expertise
- Proven actuarial team
- Engaged data team from day one, willing to work through a manual environment
- Claims team experienced in your product line
- Cohesive underwriting approach
- Established onshore (and offshore if available) operations team including Shared Services and marketing
If you’re deficient in two or three of them, you’ll have a tough time trying to launch.
What lessons did you learn along the way?
Boornazian: Your carrier partners are not always on the same timeline you are – that’s an important thing for a new program to remember. You have to be willing to compromise, especially on the timeline that works for them.
We launched an Excess product mid-year 2022 based on forms our carrier had already created, making for a faster launch. It was already admitted in all 50 states along with non-admitted capability. It was also a softer market, so it was tough to grow at a rapid rate when you’re offering a form and a product that most competing carriers offer.
The real difference was when we built our Primary product. That’s when our growth accelerated. We’ve been able to leverage our expertise and tailor the product – and thrive in the market.
If I could give advice to somebody who’s starting a new program, it would be to lean into whatever support you have, whether it be product development teams, data & analytics teams, operations teams, or whether it’s just someone with experience who sits in your office. Take advantage of their expertise, and don’t try to do it on your own.
Young: We’re always looking forward to what’s the next horizon or the next tier. As you go from the research and development to launch to production, then you go into scalability mode. For instance, we’re going to an underwriting desktop, a technological advancement that helps us go to the next tier. There’s always discussion around quote/bind/issue capabilities and new expensive technologies, but It’s a bit like crawl first before you start running. Build out the business and then make the case for more headcount, more technology, more resources. Build on your wins.
We took advantage of the many resources offered by Arrowhead Programs, like their PMO and Actuary teams who worked with our internal teams (Underwriting, Product Development, Claims, Data & Analytics and Operations) to design and build our new Primary Management Liability product.
It really takes a team to build and launch a new product – and the resources and capabilities of the Arrowhead Programs network provided us with this support. It’s such a competitive advantage.
Boornazian: Starting a new program is a mindset. You will not reach peace of mind if you need to feel a sense of completion every day. The project remains ongoing, but satisfaction will come with each phase that is completed and the teamwork that it took to finish it. We have leaned into each of our own individual strengths as well as our huge competitive advantage of being part of Arrowhead Programs. With that mindset, the entire group of us move PPEL forward each day and cannot wait to see where it’s headed.