When he started building Convelo Insurance Group, founder and CEO Josh Lamberg likely never imagined that the managing general agency (MGA) would be just about two years old when a pandemic hit.
“This is the most challenging market since the 1980s,” he says. “That’s almost 40 years where we haven’t seen [this] level of difficulty in obtaining coverages due to capacity issues, especially excess limits.”
However, he says that’s exactly why now is the right time for an MGA like Convelo, which focuses on the nonprofit space, as well as other niche insurance segments such as cyber, flood and workers’ comp.
“Insurance is a fundamental tool in our economy,” he says. “It provides the ability to make someone whole in the event of a loss. However, nonprofits are experiencing an extremely hard market while trying to serve our nation’s most vulnerable. The impact of the hard market has been exaggerated by the impact of the pandemic.”
Indeed, nonprofit is a sector of the market that has been hit hard by the COVID-19 crisis, Lamberg says, with budget constraints because of government funding being lowered or cut, fewer opportunities for fundraising and increasing insurance costs in many cases. The National Council of Nonprofits states on its website that during the coronavirus pandemic, “conversations about nonprofit sustainability have turned into conversations about their survivability.”
Pandemic-related concerns for nonprofits run the gamut from insurance issues, such as business income policy exclusions for virus-related claims and workers’ compensation considerations if an employee contracts COVID-19 on the job, to logistical concerns, such as office closures, income loss and event cancellation, according to a New York Council of Nonprofits blog post.
“Nonprofits and human service organizations now have less money to serve the neediest in our communities,” Lamberg adds.
Based in Tinton Falls, N.J., Convelo was established by Lamberg to serve the needs of nonprofits and has been well-positioned to continue this mission during the COVID-19 crisis, he says. This is because although Convelo is fairly new to the market, Lamberg says he was able to leverage his experience and carrier relationships in the nonprofit space in order to serve communities in need.
He points to one recent example of a new agent partner in Indiana that came to Convelo 72 hours prior to renewal for its foster care client, which had a sizeable portfolio of property and auto.
“They said, ‘We have nothing. We have no renewal. We’re worried about exposure because we don’t have insurance for our insured,'” he says.
Convelo’s underwriting team was able to turn something around in less than 72 hours and save the broker from having exposed its insured to operating without insurance, according to Lamberg.
“That day, we felt especially good going home,” he says.
His advice for agents to avoid running into similar challenges with their insureds is to start early, be transparent and have options for clients.
“When an agent loses an account, it’s rarely lost at that time but long before due to something the agent did or didn’t do in the past,” Lamberg says. “If an agent offers a renewal quote at the last minute that’s double the nonprofit’s current premium, then they have no choice but to buy it.”
However, the agent will most likely lose the account on the next renewal, Lamberg warns. This is because the insured will remember that their premium doubled, and they received the renewal at the last minute.
“There are going to be a lot of tough NOCs (notices of cancellation) over the next 18 months, and there’ll be business that changes hands, so start early and be transparent,” Lamberg says.
He adds that particularly in this pandemic environment, documentation is also an important step that can make a big difference for an insured.
“The more loss control processes and procedures that a nonprofit is able to document and implement can make a significant difference in the way they can be presented to the markets and what the markets are able to offer them based on these,” Lamberg says. “At Convelo, we’re working with the retail agents to identify the risk management documentation that will place the client in the best light to help underwrite the risk for the most aggressive pricing available.”
Specifically in terms of COVID-19, Lamberg says documentation requirements around personal protective equipment (PPE) implementation and following state and local legislation are an important consideration.
“Convelo is working with our retail agents to make sure clients are documenting all of the guidelines, including state and local requirements that they are following to help in the event of future claims,” he says.
‘Nonprofits and human service organizations now have less money to serve the neediest in our communities.’
Although Convelo has seen growth over the short-term — crossing the $25 million premium threshold in just about two years — Lamberg says the main reason he remains optimistic about the company’s long-term success is because of its team.
“Writing premium is nice, but bringing together a team that can create long-term success is important,” he says. “The successes of a given week or month might be good, but it’s really about how are we building a long-term sustainable business and culture?”
He cites the team Convelo has built as the MGA’s biggest accomplishment since its onset. “The talent that we’ve been able to bring together as a team is something that will withstand hard and soft markets,” he says. “The Convelo team will take us beyond the conditions of the market and build success for all. I think that’s the biggest accomplishment.”
Prior to founding Convelo, Lamberg worked for national and international insurance companies in various leadership roles in sales and marketing. He also had a previous career as a professional baseball player, including with the Cincinnati Reds organization. He’s had a fulfilling career in many ways and says the past two years building Convelo have been just as rewarding as the rest.
“When we go home at the end of the day, we feel good,” he says.
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