Looming tariffs, supply chain disruption, higher damages awards and inflation continue to put pressure on the auto liability segment’s operating margins, and agents are feeling the strain, especially when it comes to availability and policy limits. Given current market challenges, meeting the customer’s needs requires a more nuanced, risk-aware approach.
Related: Arrowhead Programs carrier relationships helped Workers’ Compensation expand to new states
“What we’re seeing in the marketplace is that carriers are cutting their capacity on what they’re willing to write,” says Adam Johnson, president of Arrowhead/IWA Automotive Aftermarket program. “We maintain a regular dialogue with our carriers to gauge where their appetite is. In turn, we communicate that to the agents we work with, so they know what they can expect and avoid unpleasant surprises for their customers.”
Supporting agents through risk management
Agents who specialize in the segment understand how to leverage risk management to retain customers, says David Putz, executive vice president of Arrowhead’s auto liability segment, which includes Arrowhead’s Auto Rental and Tow programs, Bellingham Underwriters (commercial transportation), Mile High Markets (vehicle rentals) and IWA Automotive Aftermarket. That approach aligns with Arrowhead’s broader commitment to supporting agents with risk management tools.
Related: Time is Right to Review E&O Options
“With recent renewal increases, agents want to offer loss control services to help their customers proactively manage the unique risks that they face in this segment,” Putz says.
Johnson adds that risk management tools and services can help agents build stronger customer relationships. Whether it’s a leave-behind or a conversation starter, these tools allow agents to keep risk front of mind and continue demonstrating their value. Arrowhead’s risk management services, he notes, help agents “deliver on their promise, help them retain the customer and keep the account profitable,” Johnson says.
Keeping the conversation going
That risk management support may look different depending on the account. For large clients, it could involve a specialist who works side by side with the agent — something Arrowhead provides as a service.
“We’re trying to do everything we can to not only give the tools to the agents, but ultimately also to the customer, so they have a successful insurance program,” Putz says.
For evergreen risk management topics like distracted driving, Johnson says keeping the conversation going is key. “You can check a box in the dealer’s underwriting file to say that you discussed it, but I liken it to someone speeding a little bit and then you pass a police officer — your natural instinct is to slow down,” he says. “But then over time that wears off.”
Keeping the risks visible and top of mind, Johnson adds, puts the client in a better position to respond. “There’s no silver bullet in this space. You just have to be diligent.”
Helping agents adapt
That risk management awareness also applies to the security of facilities themselves, including lock protection, building design and fencing. “They’re having to do things differently than they have ever done before — they have to adapt,” Putz says.
But the ability to adapt ultimately rests with the agent and the support they receive.
Johnson says a successful program starts with the expertise of the underwriting team and selecting the right risk. With carriers cutting their appetite, addressing the coverage needs of an agent’s customer often requires creativity — and sometimes, taking a step back.
“We have proprietary programs that offer different coverage levels,” Putz says. “However, for a large multi-state auto dealer group, the complexity of the risk required us to go to the open market to find the absolute right coverage rather than trying to fit it into our box. The agent and customer appreciated our efforts on their behalf.”
Related: How our distribution network helps us grow
Results that reinforce capacity
Both Putz and Johnson agree that agents are the lynchpin in helping the customer implement the measures that will help get the risk bound and renewed — while keeping premium rates commensurate with the risk.
“Carriers’ appetites can change because of the results,” Putz says. “We’re trying to give agents the risk management tools to keep customer pricing consistent in the marketplace.”
Learn more about Arrowhead’s and IWA’s auto liability segment by contacting Sarrah Sheppard, SSheppard@arrowheadgrp.com.
This material has been prepared for general informational purposes only, is intended to apply generally rather than to any specific company, and presumes appropriate discretion will be exercised regarding any particular situation.
© 2025 Copyright Arrowhead Programs. All Rights Reserved.