Minn. Collins Offers Umbrella Coverage Reinsurance Program

John B. Collins Associates, Inc. has opened a new facility to provide help to regional insurers writing umbrella coverage.

According to the Collins’ written statement the goal was to help insurers across the United States that are now have competing for personal and commercial lines business.

Describing itself as the fastest growing reinsurer in the United States, the company said that the new national umbrella facility provides up to $5 million in commercial and personal umbrella limits exclusively for Collins clients, with capacity provided by three international reinsurers rated A or higher by A.M. Best. It serves as a master reinsurance program for umbrella business of qualifying firms, providing “following form” coverage and rate flexibility to allow Collins clients to more effectively serve their clients needs.

Umbrella insurance policies cover losses above the limit of an underlying policy or policies, such as homeowners or auto insurance. Terms of coverage are sometimes broader than those of underlying policies.

For many regional and independent insurers, however, the reinsurance needed to write such business has been disproportionately expensive and difficult to obtain. One reason is that umbrella policies provide high limits of coverage for comparatively low premiums. This is rarely an issue for major national insurance companies that can develop a more balanced portfolio of umbrella coverage derived from their large underlying volume of auto, home or commercial insurance business.

But for insurers in regions around the country, who require reinsurance to competitively underwrite umbrella business, this has been an issue because umbrella business is a relatively small portion of their business. As a result, many broker market reinsurers, who provide most of the reinsurance coverage in the United States, have been reluctant to offer umbrella reinsurance to these firms.

The Collins facility assists such reinsurers by bringing numerous, similar regional insurers into one facility, providing a more balanced mix of business to reinsure.

The reluctance of broker market reinsurers also, in the past, led to a cost issue for many insurers. Without other options, many regional insurers could only obtain reinsurance from direct writers, who often dictated separate rates and forms for umbrella coverage, disproportionately increasing costs for the insurers.

The Collins facility addresses this problem by providing insurers with a much-needed option in the broker market, with reinsurance that follows the rates and forms of the underlying umbrella insurance business. The facility also removes the need to separately find reinsurance for an insurer’s umbrella program, requiring only the approval by reinsurers involved to include the insurer in the umbrella facility.

“We understood the challenges this situation created for many of our clients and other insurers across the country, as they could lose quality accounts if unable to offer significant limits of umbrella coverage at viable rates,” Collins President and CEO Pat Denzer said. “We worked with high-quality reinsurers to provide this stable, long-term solution.”This facility removes a competitive disadvantage for many U.S. insurance companies, helping them to offer their quality products and services to consumers across the country.”

John B. Collins Associates, Inc. is a privately-held company that places reinsurance coverage for companies in the property-casualty, life, and accident & health insurance markets. Headquartered in Minneapolis, it has 13 offices across the United States as well as in London and in Bermuda.

Source: John B. Collins Associates, Inc.

Topics USA Carriers Reinsurance Minnesota