USLI Expanding with Retail Agent Distribution; No Longer Exclusively Wholesale

By | June 25, 2010

After years of doing business exclusively though wholesale brokers, United States Liability Insurance Group (USLI) is expanding its distribution to work directly with retail insurance agencies.

“We are expanding our distribution to include retailers on a selected basis,” Chairman, CEO and President Thomas Nerney told Insurance Journal.

Nerney said USLI is “not dropping wholesale brokers” but anticipates some will be concerned about USLI no longer being exclusive to them.

He said the change is not one he wanted to make but he felt forced to do it.

“We would not have made this decision except for several issues that came to light recently within our customer base,” Nerney said. “These threats within the wholesale sector made staying exclusively with professional wholesalers not in the long-term best interests of our company.”

He would not elaborate on what those issues or threats are.

Nerney said the change was announced to its wholesale customers this week. USLI does business now with 178 wholesale brokers.

He could not say at this time how many retail agencies USLI will be looking to conduct business with.

The company is known for writing small accounts, with an average premium under $1,500. It writes general liability (for specialties such as child care, artisan contractors, bars and taverns, vacant buildings), professional liability (errors and omissions, directors and officers, employment practices), property coverages including habitational, a package policy for non-profits, liquor liability and some personal lines (umbrellas, excess auto, recreational vehicles). It writes on an admitted and non-admitted basis across the country.

Nerney said interested retail agents will be matched up with USLI products for their region. They will be able to take advantage of USLI’s online system.

The USLI group, which wrote $378 million in gross premium in 2009 and is owned by Berkshire Hathaway, includes three companies: United States Liability Insurance, Mt. Vernon Fire Insurance and U.S. Underwriters Insurance.

A.M. Best rates the company A++ (Superior) with a stable outlook, citing its strong capitalization, outstanding long-term profitability, underwriting discipline and the financial backing of Berkshire Hathaway. Offsetting the positives, A.M. Best said, are several factors including the effects of the global financial crisis and the group’s dependence on a single method of distribution, the professional wholesaler.

However, Nerney said the views of rating agencies were not a factor in his decision to expand with retailers.

Wholesale brokers and trade association executives did not return calls for reaction prior to press deadline.

The move by USLI contributes to the flurry of changes taking place in the wholesale brokerage industry, which has seen several big mergers, employee shuffling, and new start-ups within the last few months.

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