We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!

wscdsdc

media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us

855.ask.wink

Close [x]
pattern

Industry News

Categories

  • Industry Articles (21,155)
  • Industry Conferences (2)
  • Industry Job Openings (35)
  • Moore on the Market (414)
  • Negative Media (144)
  • Positive Media (73)
  • Sheryl's Articles (800)
  • Wink's Articles (353)
  • Wink's Inside Story (274)
  • Wink's Press Releases (123)
  • Blog Archives

  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • September 2008
  • May 2008
  • February 2008
  • August 2006
  • NAILBA Switches E&O Carrier After 10 Years

    March 21, 2014 by Cyril Tuohy

    After a decade with American International Group (AIG), the National Association of Independent Life Brokerage Agencies (NAILBA) has switched professional liability carriers to Everest Indemnity Insurance, for errors and omissions (E&O) coverage.

    The move represents an adjustment to AIG’s business model, said Robert G. Erzen, area vice president with Arthur J. Gallagher & Co., NAILBA’s E&O broker.

    AIG’s Berkeley Heights, N.J., unit, which was offering the coverage to NAILBA members for the past 10 years, is moving away from writing 250 or more bespoke errors and omissions policies for individual wholesalers, Erzen said.

    Instead, AIG is looking further into its business in writing one master policy for hundreds of agents and/or agencies. That’s because it’s easier and benefits from the economies of scale that massive global carriers like AIG can provide, Erzen said in an interview with InsuranceNewsNet.

    “AIG’s focus on individual agencies has changed over the past four or five years,” he said. “AIG’s New York underwriting team likes to write master policies for many agencies under the group rather than writing individual agencies.”

    Erzen, based in Irvine, Calif., also said that “Everest is A+ rated and AIG is A rated so this is a step up in financial strength, and when it comes to A.M. Best & Co. ratings, those things matter to NAILBA.”

    Individual NAILBA wholesale agencies need more flexibility and customization in their E&O coverage to fit their unique needs since many of them sell not only life insurance, accident and health, and disability insurance, but also sell variable products and other securities.

    “These folks need flexibility,” Erzen said. “They have very broad business backgrounds and broad operations, they need a product that can change as their business changes. Everest is more willing to be flexible. That said, AIG remains a big partner of ours.”

    NAILBA referred all calls to Erzen.

    “We are pleased to announce Everest Indemnity Insurance Company (Everest) as our new insurance carrier for the NAILBA sponsored brokerage general agency errors and omissions (E&O) program,” NAILBA said in post on its website announcing the change.

    “Everest’s management team brings deep experience in underwriting brokerage general agencies, life insurance agents, broker dealers and registered representatives,” NAILBA said.

    After a decade with AIG and retention rates in excess of 99 percent, “making a move was not something that’s taken lightly,” Erzen also said.

    Each brokerage general agency (BGA) and NAILBA member is free to choose whoever they want as a professional liability insurance carrier, but there’s no question that using the carrier recommended by NAILBA makes a big difference in pricing, he said.

    “Pricing is based upon the affiliation with NAILBA and pricing is extraordinarily cheap relative to other offerings,” he said. “It’s the cumulative effect of having 250 agencies out there and that’s why we have 99 percent retention rate.”

    For large nationwide carriers, BGAs, many of which only employ a handful of people, are just another small business when they walk in “off the street” and look for individual coverage so it’s much cheaper to use NAILBA’s recommended E&O carrier.

    “You don’t get the right advice because the policy is not tailored to your brokerage general agency, and you don’t get the cumulative effect of all 250 agencies within the NAILBA umbrella,” Erzen said. “If you have a claim issue, you’re better off being part of program because we have relationship and size.”

    To do business with insurance companies, wholesalers need E&O coverage, so the question isn’t whether they will buy the coverage, it’s who are they going to get it from and for how much.

    “As a category, BGAs are a great risk,” Erzen also said. “They are a wholesaler not retailer and so they are one step removed from the liability in most cases.”

    In 2009 and 2010, E&O claims against BGAs spiked after scores of policyholders sued in connection with investment losses related to the poorly performing investment components of life insurance policies, Erzen said.

    Large life and estate policies whose premiums were financed instead of paid for with cash caused issues for wholesalers. When credit markets tightened and financing dried up, the life insurance policies had to be funded by liquidating assets and irate policyholders sued claiming they’d been covered by policies that weren’t suitable for them.

    Prices for errors and omissions professional liability have flattened over the past 12 to 18 months as the financial crises faded into history and claims volume tapered off, he said. Rates should remain relatively flat for the near future, he also said.

    “There might be some inflation adjustment – a 3 percent increase or something like that – but losses have really leveled out,” he said.

    Originally Posted at InvestmentNews on March 21, 2014 by Cyril Tuohy.

    Categories: Industry Articles
    currency