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From the Front Lines: Commercial Auto

When it comes to commercial auto insurance, independent agent Michael Graham says that agents need a unique combination of skills to help clients navigate the complicated market.
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FTFL_MichaelGrahamMichael Graham

Denver, Colorado

How did you get started in commercial auto insurance?

Working for a direct writer as part of their own sales force. I had worked for a very large commercial trade publishing company for five years. Some folks I knew were working for a division of Zurich Insurance that was niched in the automotive industry. That’s how I got started in specialty commercial auto—working with service and repair garages, tow companies and automotive recyclers.

How did you get started at your agency?

After a corporate restructuring at Zurich, I ended up on the independent agency side and started AutoRisk in late 2010. Our first policy year was 2011. Currently, we’re about to finish our eighth policy year in business.

Biggest commercial auto insurance industry changes?

A heavier emphasis on hiring practices and training. How do they go about hiring their employees? After they hire someone, what is their training program for integrating those employees into the business? The businesses that get the best insurance premiums are the ones that have the best internal controls in place for identifying, hiring and training drivers.

Biggest challenges?

It’s a unique combination of skills that make individuals successful in the insurance industry: they have to be one part counselor, another part risk manager and another part an insurance professional that has the ability to describe to customers the unintended consequences of their decisions.

Colorado recorded the largest hail disaster in insurance history last year. Physical damage coverages are going up while litigation is increasing on the bodily injury and property damage side. So, you have a double-edged sword impacting rates.

Many of our tow clients are seeing double-digit increases at a minimum. Customers get creative and want to take a commercial auto and move it to their personal auto policy, which has the potential for creating a situation where they’re underinsured not knowing it.

Future of commercial auto?

One trend is greater consolidation among businesses that have a large commercial auto exposure because the increased premiums make it difficult for newer businesses to enter the market. Newer businesses don’t have the staff in place to deal with employee selection and training. On the towing side, you’re seeing fewer small tow operators. It’s becoming very difficult for those businesses to operate profitably, so you’re seeing the middle get eroded.

Advice for a fellow agent?

Have excellence in your niche, whether it’s in the form of providing driver training resources or providing compliance resources for individuals with commercial auto fleets. Agents should have unique programs and offerings inside their chosen niche to differentiate their agency from competitors. Part of AutoRisk’s uniqueness as an agency is that we help our client base with resources.

Favorite success story?

A client implemented our suggestions to comply with the Occupational Safety and Health Administration (OSHA). After an OSHA inspection, the client had some minor issues but received a letter saying OSHA wasn’t going to take any further action. That shows that when customers implement the best controls in their business, they reap the rewards not only in lower insurance premiums but also in reduced regulatory compliance fines and penalties from federal regulatory agencies.

AnneMarie McPherson is IA assistant editor.