hanover specialty overview · 2017. 3. 8. · our 160th year the best kept secret in the industry 2...

Hanover Specialty Overview

John Casper Regional President, West

Our 160th Year The best kept secret in the industry

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April 1852

• Older than Travelers, Berkley, Chubb, Allstate and CNA

• National footprint in 1800s

• Wrote in Asia in 1940s

• Participated in Lloyds 1914+

• A top commercial player at turn of century

Interesting History

• One of 40 oldest companies on NYSE

• National company with material international position

• One of the fastest growing U.S. P&C companies

• Best place to work by Business Insurance last two years

• With $4.4 billion in revenue The Hanover is a Fortune 1000® company

• Ranked among the top 25 property and casualty insurance companies

Interesting Position in 2012

The Hanover

Personal

Lines 34%

Commercial

Lines 27%

International

Specialty 23%

U.S.

Specialty 16%

Hanover is a strong performing diversified company

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2012

$4.4 Billion Net Written Premium

Business Mix

50%

55%

60%

65%

70%

75%

80%

85%

90%

2007 2008 2009 2010 2011 2012

The Hanover (U.S. Domestic)

U.S. Industry Loss and LAE Ratio

Note: The 2012 industry loss ratio is an estimate. Source: Dowling & Partners adjusted for Superstorm Sandy.

$1.9

$2.4 $2.4 $2.5

$2.6

$-

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

2008 2009 2010 2011 2012

Solid financially and progressing

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Net Written Premium Growth Earnings Power Pre-Tax Segment Income Ex-Cat

Shareholder’s Equity ($ in billions)

($ in billions) ($ in millions)

Current FSR

Current Senior Debt

Ratings

Date of Most Recent Upgrade/

Outlook Change

A.M. Best A bbb May 2009 - Upgrade

Moody’s A3 Baa3 January 2008 – Upgrade

S&P A- BBB- May 2008 – Upgrade 2010– Upgraded ERM rating April 2011 – Stable Outlook

Positive Ratings

$231

$472

$369 $383

$433 $445

$-

$100

$200

$300

$400

$500

2008 2009 2010 2011 2012

$2.5 $2.6

$3.0

$3.6

$4.4

$-

$1.0

$2.0

$3.0

$4.0

$5.0

2008 2009 2010 2011 2012

The West Region Vital Statistics

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• Started June 2009: CA/OR/WA/CO/UT/AZ

• West Region Today: CO/UT/AZ/TX/OK/MO/KS/AR

• Premium: $420,200,000

• Employees: > 250

• Office Locations: Denver (Regional Office), Houston, San Antonio, Dallas, Little

Rock, Kansas City, St. Louis, Phoenix

• New Business Growth: 10.3% / 20.6% CL / 46.9% Specialty

• Total Growth: 2.7 % / 6.1% CL / 9.2% Specialty

WA

OR

CA

ID

NV

MT

WY

UT

AZ

ND

SD

MN

IA

WI

NB

KS

NM

TX

OK

MO

AR

LA

MI

IL IN OH

KY

TN

MS AL

FL

SC

NC

WV

VA

PA

NY

NJ

DE

MD

DC

CT

RI

MA

VT

NH

ME

CO CO

UT

TN

GA

AR

LA

NorthEast: $1.2B Mid-West: $1.2B

Pacific: ~$300M

West: ~$400M

SouthEast: $550M

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Nationwide Capabilities

A Period of Opportunity… For Those With Value Focus

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1.Our next decade of The Hanover journey will set us apart.

2.Industry coming out of difficult period that weakened many.

3.Current market turn leads to carrier actions that are frustrating;

creating work and confusion

4.But, environment creates an opportunity for winning agents to

embrace an expertise-and specialization-driven strategy.

5.The Hanover partnership can enhance agents’ ability to deliver and

create sustainable value.

Our vision drives a powerful value proposition for our partner agents

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World Class Property and Casualty Company

World Class People

Deep

Partnerships

with

Winning

Agents and

Brokers

World Class

Product and

Underwriting

Capability

Responsive Service Delivery

via Cost – Effective

Operating Model

Strong Culture of Execution

Strong Financial Position

Our

VISION

The Best Partner Because:

I. Intense Focus on Product Innovation

II. True Commitment to Partnership (Franchise Value)

III. Unparalleled Responsiveness and Expertise

Our proposition resonates with the best agents and brokers in the country

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Agents with >$1M

Agents with >$3M

23%

85%

35%

15%

Total Written Premium

50% Premium

800 Agents

Driving share increase with best agents

Top 100 U.S. Agents 2009 – 2011

Growth with IIABA/Reagan Best

Practice Agents 2009 – 2011

Total premium with this cohort of

agents, $874M

Total premium with this cohort

of agents, $236M

Healthcare

Management Liability

Hanover Specialty Industrial

Surety

Professional Liability

Marine

AIX Program Business

Direct Written Premium In Millions

$59

2004

$812

2012

Our investments in specialty: Key to growth with our partners

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Focus on today – Healthcare, Professional & Executive Liability

Professional Liability

Management Liability

• Lawyers

• Architects & Engineers

• Accountants

• Business, Professional, and Personal Services (MPL)

• Employment Practices Liability

• Nonprofit Liability

• Private Company Liability

• Fidelity & Commercial Crime

• Excess Liability

• Market leading products & coverages; “private label” programs

• Limited distribution – disproportionate UW attention

• Efficient & responsive operating model

• POS capabilities (ML & PL)

• Deeply experienced claims professionals

• Value added risk management

• Etc….

Products Proposition

Healthcare

• Eldercare

• Allied Healthcare Centers

• Home Healthcare

• Medical Equipment

HANOVER PROFESSIONAL

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Gerry Merritt, President

Hanover Professional Portfolio (HPP)

4 Dedicated Centers of Professional Liability Expertise:

LAWYERS ACCOUNTANTS

ARCHITECTS & ENGINEERS

MPL for 150+ PROF CLASSES

What we do

Offering

• Lawyers Professional Liability

• Architects & Engineers Prof. Liability

• Accountants Professional Liability

• Business, Professional & Personal Services E&O (MPL)

Strategy

• Focus is small to mid-size firms (<35 attorneys)

• Distribution is focused on 50 Target Agents who are aligned with our mix of business appetite

• Focus is on small to midsize firms (<$10M in revenue)

• Distribution aligns with Specialist Target Agents

• Focused on small to and mid-size (<$15M in revenue)

• Concentrating on Specialist Agents with large blocks of business

• Actively pursuing 30+ classes of professions

• Actively seeking, developing and launching program opportunities

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Lawyers Professional Liability

What we target • Focus is small to mid-size firms (<35 attorneys) with little to no area of practice severities

• Target Areas of Practice: Civil Litigation, Commercial Litigation, Criminal Defense, Elder Law, Employment, Estates/Trusts/Probate, Family, Immigration, Insurance, Municipal, Social Security, Workers’ Compensation, Public Utilities, Schools & Tax Preparation-individual

Excluded areas of practice:

• Admiralty, Copyright/Trademark, Corporate Finance, Entertainment, M&A, Municipal Finance, Mineral Rights, Patent, Mass Tort, Real Estate, Securities, Tribal Law & Water Rights

What we offer • 3 types of professional liability insurance to meet the needs of law firms:

• Hanover Lawyers Professional Preferred – Covers the professional liability risks that most law firms face.

• Hanover Lawyers Professional Primary – Accommodates the needs of smaller, more cost-conscious firms

• Hanover Lawyers Professional Prestige – Provides more sophisticated protection for larger firms with specialized practices and more complex exposures

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Strong & Growing Demand for MPL

• Professional Liability is not just for Doctors, Lawyers, Architects and Accountants anymore

– Many more classes being characterized as “professionals”

• It’s no longer “nice to have”

– Professional Liability is becoming the most important coverage these professionals can carry. Reputations are at stake.

– Lawsuits are increasing

• Most states require certain professions to carry Professional Liability

‒ More and more customers are asking for proof of insurance

• Bigger demand is coming from contract requirements

• Most companies that bid on a job are being contractually required to show proof of professional liability

Miscellaneous Professional Liability (MPL)

What we target

A wide range of personal, business, and service professionals., such as:

• Business Services E&O

– Advertising Agencies, Marketing Companies, Market Researchers, Arbitrators and Mediators, Business Associations, Executive Recruiters, Graphic Designers & Interior Decorating Services

• Personal Services E&O

– Travel Agents, Tax Preparers, Funeral Directors and Home & Commercial Property Inspection Services

• Professional Services E&O

– Curators, Management Consultants, Marketing Consultants, Property Managers & Real Estate Agents and Brokers

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What we offer 2 different products for comprehensive, custom-designed protection

• Endorsement Option - An affordable errors and omission endorsement option

that can be added on to Hanover's Business Owner's Policy (BOP) or Commercial Package Policy (CPP).

• Stand-Alone Product - For small to mid-sized businesses that need broader coverages and higher limits, we offer an industry-leading, stand-alone professional liability product.


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Product features

• Claims Made and Reported Form

• Duty to Defend/Pay on behalf of

• Claim Expense Limit available outside of Policy Limit

• $25,000 Defense Coverage for Disciplinary Proceedings

• Prior Acts Coverage available

• Internet Liability Coverage included

• Deductibles not Retentions

• Personal Injury Coverage included

• Punitive Damages Coverage included


Program Strategy

• Closely work with agents to get successful programs off the ground

• Focus on specific classes and create programs around them

• Specially crafted coverage “hook” is only available through this program, creating demand.

– Exclusivities available for specific class coverages

• Assist with or drive in marketing strategies & tools

• Educate potential insureds on exposures and how our product closes those gaps

• Provide risk management services


Program Benefits

• Significantly Increased Revenues

‒ Increased demand

‒ Lower costs of procuring

‒ Dramatic increase in hit ratios

‒ And improved renewal retentions

• Program agent has a competitive advantage in marketplace

• Higher retention with more lines of business with customer

• A strong professional Liability program is an excellent breeding ground to sell other lines of coverage

• Leverages your experience & capabilities to further grow your operation

Why Hanover MPL?

• Focus on a Selective group of Top Agents

• The Hanover is a Strong and Vibrant Carrier offering a broad and distinctive portfolio

• Significant Investments in Professional Liability: • Talent, Products, Capabilities & Ease of Doing Business

• Start Up – no min book of business is required to

start a program

• Speed to Market - We can deliver a start up program in as little as 60 days

• Access to Key Decision-Makers ‒ Minimal red tape, Hanover is flat, lots of autonomy

• National company admitted in 48 states (HI, AK are surplus lines)

MANAGEMENT LIABILITY

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Helen Ryan Savaiano, President

What we do

Offering

• Employment Practices Liability

• Nonprofit Management Liability

• Private Company Management Liability

• Fidelity & Commercial Crime

• Following Form Excess Liability Advantage

Strategy

• Products specifically designed to compete against “best in class” in management and executive liability.

• Have the ability to create “ Private Label “ enhancement endorsements for agencies making a significant financial commitment

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Employment Practices Liability Advantage

What we target • Standard - Vast array of private companies with up to 2000 employees

• Small Business Policy - Vast array of private companies with up to 100 employees and no claim history

Excluded classes:

• Financial institutions, public companies, governmental entities, labor unions, public schools and universities, credit reporting and collection agencies, professional employer agencies

What we offer

• Standard Policy: Limits up to $10 Million

• Small Business Policy: Limits up to $1 Million

• Available on POS - only 7 Application questions

• Financial data and HR handbooks are not required as part of the application

• Retentions as low as $1,000

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Nonprofit Liability Advantage

What we target

• A vast array of nonprofits of all sizes including but not limited to:

• Art Councils, Theatres, Shelters, Clubs, Professional/Industrial Trade Associations

• Economic Development Agencies, Chambers of Commerce, Museums, Medical Clinics

• Human Service Organizations

Excluded Classes:

• Governmental entities, hospitals, colleges/universities, labor unions, political organizations

What we offer

• Limits up to $10,000,000

• D&O Retention as low as $0 for individuals and $500 for entities

• EPLI Retention as low as $1,000

• Separate limits of liability available for D&O, EPL and Fiduciary

• Limits up to $1 M for nonprofits with less than 25 employees is available on POS

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Private Company Liability Advantage

What we target

• A vast array of privately held companies in various business segments with less than 2500 employees and up to $250 M in assets.

Excluded Classes:

• Financial institutions, public companies, governmental entities, labor unions, schools and universities, credit reporting and collection agencies, insurance companies, professional employer agencies

What we offer

• A modular policy with 5 optional coverage parts:

• D&O for individuals and the entity

• Employment practices liability

• Fiduciary coverage

• Fidelity & Crime

• Kidnap/ Ransom

• Limits up to $10 Million

• Retentions as low as $1000 for entities and $0 for individuals

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Fidelity & Commercial Crime Advantage

What we target

• Nonprofit, private and public entities of all sizes

What we offer

• Employee theft

• Forgery or alteration

• Theft , robbery and burglary inside the premises

• Theft and robbery outside the premises

• Computer fraud

• Funds transfer fraud

• Money orders and counterfeit money

• Excess Commercial Crime

• Investment Advisor ERISA Bond

• Financial Institution Bonds

• Limits up to $5 Million

• Retentions as low as $1,000

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Management Liability Risk Services

• Hanover Employment Practice Liability policyholders have unlimited access to a toll free hotline for employment practice questions and guidance supported by the Jackson Lewis law firm, national experts in employment practices and labor relations . They also receive access to regional specific articles and information on claim trends and risk management issues.

• Kidnap & Ransom policyholders are fully backed by a proven international full service security firm

• Many of our policies include optional sublimit endorsements for crisis and risk management expenses.

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Why Hanover Management Liability?

1. Commitment to a limited retail agency distribution that allows us to use our capacity

to write a balanced portfolio with our select partners that includes ballast business as

well as some higher risk classes. We do not do business with the largest brokerage

houses or wholesalers.

2. Simplified ML structure that ensures your agency receives direct access to a dedicated,

experienced UW for all business lines/products on your new and renewal business.

Authority is in the field.

3. Best in class suite of products with flexible terms and options providing first-rate

protection for businesses and their directors, officers and employees.

4. Claims professionals with deep knowledge of the industry prepared to assist the

Insured in managing claims and lawsuits to the best possible resolution for the Insured.

5. Competitive agency compensation whether through a commitment to submission

flow, book thin or affinity/program business.

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HANOVER HEALTHCARE

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Matt Mitchell, President

What we do

Offering

• Allied Healthcare

– Allied Health Centers

– Home Healthcare

– Medical Equipment

• Eldercare

Strategy • Provide a suite of leading products

that targets the large, diverse and growing Allied Health and Eldercare Industries.

• Foundation of strong claims and risk management services by on staff nurse attorneys and clinical risk managers

• Dedicated multi-line healthcare underwriters that reduce contact points for your agency

• Committed to limited distribution with a focus on a limited number of agents per geography.

Allied Healthcare

What we target

Allied Health Centers

Home Healthcare

Medical Equipment

Targets a wide array of routine diagnostic testing, laboratories and

services including: Medical Imaging & Diagnostic Testing, Sleep

Study Centers, Closed and Retail Pharmacies, Hospice Homes,

Physical/Occupational Therapy

Targets a variety of medical and healthcare related services

delivered in the home including: companion care, skilled nursing

care, wound care and home infusion.

Targets home and durable medical equipment distributors and

retailers selling: life support equipment, mobility equipment,

orthotics/prosthetics, wheelchairs and medical gas.

What we offer

A comprehensive and customizable solution designed for each Allied Healthcare sector that includes:

Core Coverages:

• Property, General Liability, Auto and Commercial Umbrella

Specialized Coverages:

• Professional Liability

• Available on either Occurrence or Claims Made coverage forms with option for separate limits of

insurance

• Physical and Sexual Abuse

• Medical Director’s Coverage

• Administrative Defense Coverage endorsement including HIPPA investigations

• Data Breach

• Other Liability coverage available such as: Employee Benefits Liability, Employment Practices Liability,

Stop Gap, etc.

Allied Healthcare Products

Eldercare

What we target

Customizable program designed to meet the needs following types of small to midsized eldercare organizations including:

• Skilled Nursing Facilities

• Assisted Living Centers

• Continuing Care Facilities

• Independent Living Communities

What we offer

Our comprehensive solution is tailored for the Eldercare market. This flexible array of coverages and services can be customized to

meet the unique needs of this diverse industry.

Core Coverages:

• Surplus Lines General, Professional Liability, Sexual

Abuse and Employee Benefits

• Surplus Lines Excess with limits up to $5 million

• Commercial Property

• Commercial Auto

Specialized Coverages:

• Administrative Defense Coverage

• Public Relations Expense

• Emergency Evacuation Expense

• Innocent Party

• Religious Counseling Professional Liability

• Data Breach

• Emergency Management Expense

Differentiating & Delivering Value

Staffed by nurse attorneys and clinical risk managers with over 20 years experience in the Healthcare industry, Hanover incorporates an integrated approach to mitigating loss potential and delivering valuable services. An example of this type of differentiated approach is our risk management portal and self assessment tools.

Industry News and Legislation

Alliance Partners providing discounts on criminal background checks, MVRs, etc.

Interactive Self Assessment tool to assess operational performance and make recommendations

Hundreds of risk management articles on a wide range of Eldercare specific topics


Self Assessments

Each Hanover Eldercare client can complete on on-line self assessment. This self assessment tool allows clients

to evaluate their business practices on a wide variety of topics including:

• Customer Service and Expectations

• Organizational Policy and Procedure Manuals

• Administrative/Operational Policies and Procedures

• Credentialing of Non-employed Medical Providers

• Contract Management & Employee Management

• Nursing Services

• Medication Management

• Admission Services

• Medical Records/Documents

• Infection Control

• Facility Programs

• Incident Management

• Skin Wound Management

• Fall Prevention, Elopement Prevention, Abuse Prevention


Self Assessments cont..

This online interactive tool automatically scores the risk and highlights areas of deficiency

Clients can review the results of their self assessment and easily find areas that are in deficiency for every question asked. The tool automatically provides links to documents that cover best practices that they should incorporate to improve the quality of their operation

Healthcare Risk Management Services

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Each client receives a direct call from Hanover’s on staff risk management clinicians to help them review the survey

findings, ask questions that they may have and provide additional recommendations on how to improve the operation.

Larger accounts may be placed on service plans where loss prevention strategies will be developed and shared with

the risk managers. These loss prevention strategies can include both clinical and non-clinical areas of improvement.

One of the cornerstones of Hanover’s integrated claims and risk management approach is

highlighted on how we respond to an adverse event at an insured facility. This involves:

• 24 hour first call and customer care team providing support 24/7,

• Prompt and thorough investigation of incidents,

• Development of loss mitigation strategies that provide additional protection to clients and

reduce potential damages

• Aggressively defending clients

• Only working with specialized group of attorneys who have extensive expertise in defending

Eldercare facilities

Managing Claims and Mitigating Damages

Providing Proactive Risk Management Services

Why Hanover Healthcare?

Benefits to your customers:

• Customizable programs that address the unique exposures of healthcare businesses

• Seasoned management, underwriting, claims and risk management team

– Over 20 years of expertise in providing insurance program for healthcare industry

• Dedicated claims team with first hand healthcare industry experience as nurses and medical malpractice attorneys

• On staff clinical risk managers and services to assist customers in loss avoidance

Benefits to your agency:

• Comprehensive product offering targeting growing Allied Health and Eldercare sectors.

• Unique coverages and services to differentiate your sales

• Direct access to dedicated multi-line Healthcare Underwriting Team

• Commitment to limited distribution with Partner agents

• Enhances the franchise value and facilitates distinction from competitors

• Increased revenue opportunity by direct access to the market (Hanover) and avoidance of dependency upon wholesalers

QUESTIONS?

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