Today’s hard insurance market is the result of years of carrier unprofitability due to weak underwriting, premium declines and pricing erosion as well as weakening terms and conditions, further exacerbated by social inflation, higher loss activity, a rise in catastrophic losses, and lower interest rate levels. To effectively navigate today’s market, producers require a carrier partner committed to transparency, communication, meticulous and flexible underwriting, and robust claims defense – all hallmarks of Prime Insurance Company’s 40-year success in writing specialty, hard-to-place and misunderstood risks.
Our approach from the onset has been to collaborate with our partners, bringing together all the stakeholders – from the producer to the insured and chief underwriter — to truly understand the risk so that the insurance we provide reflects what the client is looking to accomplish. There is complete transparency throughout the process so the client is clear as to how the insurance program is designed to respond and under what situations, and how much it will cost to purchase a responsive program. Complete transparency also helps eliminate any real or perceived gray areas in coverage on behalf of the insured. At the same time, we also look at innovative underwriting approaches to achieve the desired objectives and make the client happy. This, we feel, is instrumental to managing client expectations and averting disputes down the road in the event of a claim.
Prime Insurance is committed to providing a robust claims defense, working against the pitfalls of social inflation, which has contributed to underwriting deterioration and unprofitability for many carriers. In making sure all parties are on the same page at the outset, Prime Insurance occupies a strong legal position—one that is understood by the insured. Social inflation is characterized by multi-million-dollar nuclear verdicts fueled by an aggressive plaintiff bar, the emergence and growth of litigation financing, the proliferation of class-action lawsuits, and jury pools with anti-corporate sentiment. Too often a case that would have resulted in a $50,000 settlement at one time ends up in litigation with verdicts today in the tens or hundreds of millions of dollars.
In addition, claim losses have increased rapidly in recent years—much more rapidly than in preceding years. For example, from 2013 through 2018, commercial auto claim losses increased at an annualized rate of 10.9%, compared with a 1% annualized rate from 2007–13. Medical malpractice insurance experienced similar trends. (NAIC)
Another impact of the litigation environment has been a shift in many state legislatures that have extended or attempted to extend statutes of limitations and retroactively apply the new time limit to claims whose statute of limitation had expired. Retroactive extensions of statutes of limitations have created additional liability and costs that were not contemplated when an insurance policy was originally issued and priced.
Working together with our brokers and their insureds from the beginning helps develop a real partnership in creating a sound insurance program based on a clear understanding of the costs involved and the terms and conditions of each policy. It also helps stem potential problem areas in the event of a claim. In today’s hard market with double and even triple-digit rate increases, conservative underwriting guidelines, diminished capacity and a scaled-back appetite for certain risks, strong carrier partnerships are everything. We forward to continuing to foster our broker partnerships on the road to ongoing success.
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Authored by Rick J. Lindsey, CEO, President, and Chairman of Prime Insurance Company
Rick J. Lindsey hails from Salt Lake City, Utah. He began working in the mailroom of his father’s Salt Lake City insurance firm, getting his introduction to the business that became his lifelong career. Lindsey quickly rose through the ranks while working in nearly every imaginable insurance industry job. As an entrepreneur, specialty lines underwriter, claims specialist, risk manager, and a licensed surplus lines broker, Rick Lindsey is highly skilled in all levels of leadership and execution. As he progressed on his career path, Rick discovered an urgent need for insurers willing to write policies for high-risk individuals and businesses. He was frequently frustrated that he could not provide the liability protection these entities desperately needed to safeguard their assets. He also formed the belief that insurance companies acted too quickly to settle frivolous claims. Lindsey decided to try a different approach. He started an insurance company and became the newly formed entity’s CEO. This opportunity has enabled Rick to fill a void in the market and provide a valuable service to businesses, individuals, and insurance agents who write high-risk business. Prime Insurance also specializes in helping individuals and businesses who live a lifestyle or participate in activities that make them difficult for traditional carriers to insure. If you’ve been denied, non-renewed, or canceled coverage, don’t give up quite yet. Chances are Prime Insurance can help.
