Business Moves
Hiscox
Hiscox, an international specialist insurer, has opened an office in Miami to further expand its U.S. operations. The Miami office, which is located in the heart of the Brickell area, will serve brokers in the Southeast.
The lines of coverage that will be initially available through the Miami office include allied healthcare, architects and engineers and miscellaneous errors and omissions.
In the last six months Hiscox has added several new product lines including inland marine and construction, and opened new offices in Lexington, Ky.; Boston, Mass. and Kansas City, Mo. Hiscox plans to open a Los Angeles office by end of 2009.
American Strategic
Florida-based American Strategic Insurance Corp. (ASI) has entered the South Carolina marketplace and is offering homeowners’ insurance coverage for coastal property owners through independent agents.
ASI President and CEO John Auer said the firm plans to eventually offer a suite of personal property insurance products in South Carolina.
ASI has more than 400,000 policyholders in Texas, Louisiana, Colorado and Arizona. It specializes in personal property insurance and also offers flood coverages as a Write Your Own Flood Service Provider. The company, licensed in 15 additional states,plans to expand.
The Hanover
The Hanover’s CEO Fred Eppinger says the specialty lines business will be a key growth engine for the Worcester, Massachusetts-based super regional insurer in the next several years.
Over the last year, revenue from specialty lines at The Hanover has grown from roughly $65 million to $500 million, fueled by a spending spree that includes the purchase or expansion of specialty products, services and companies – including last year’s acquisition of Windsor, Connecticut-based specialty insurer AIX Holdings.
Eppinger’s big plans for The Hanover coincided with A.M. Best upgrading the company’s insurer financial strength ratings to “A,” the third ratings firm in 15 months to do so.
Considering the state of the industry as a whole, an upgrade in the current market is rare. But viewed in the context of The Hanover’s recent history, it’s nothing short of amazing. Back in 2003, the company sat on the verge of ruin, and Eppinger led a turnaround effort to ditch The Hanover’s life insurance business to focus on its core P/C business.
The financial conservatism created by the distress of the company in 2003 made Eppinger and other executives focus on underwriting, rather than investment gains, as the key driver of The Hanover. “I made it very clear that we’re in the underwriting business,” he said. “Our portfolio is very conservative around investment grade bonds. Our skill is in underwriting, and not” playing the market.
That conservative, investment-wary approach partially laid the roots five years ago for the financial stability the company is now seeing, Eppinger said. The upgrade, he added, “is a very important mark in the journey we have made… this allows us to be one the most important companies for independent agents over the next two years.”
The company’s capital base is $1 billion stronger than in 2003 with $400 million at the holding company level. Eppinger plans to leverage this by investing in new products and services, and bringing in talent from distressed, larger competitors.
Over the short term, Eppinger said The Hanover will focus on improving specialty lines products, and providing greater access for agents to those markets. Eppinger also said The Hanover will continue to grow in niche middle-market lines for institutions, schools and nonprofits, which have also been significant revenue drivers for the insurer.
All of this means growing The Hanover’s presence across the country. The Hanover currently writes in 35 states but lacks a physical presence in 30.
“With the disruption in the industry, we have had agents ask us to expand,” Eppinger said. “Our footprint will grow.”
AIG
American International Group Inc. has reached a deal to sell two New York buildings, including its downtown Manhattan headquarters, according to a report from Reuters, citing unnamed sources. The buildings being sold are located at 70 Pine Street and 72 Wall Street.