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From the Front Lines: Commercial Umbrella

"If you write commercial insurance, you have to be involved in all aspects of it if you're going to do right by your client," says independent agent Fred Wittenbaum. "It's all part of tailoring the program to the best interest of the client."
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From the Front Lines: Commercial Umbrella

Fred Wittenbaum


S P Agency, Inc.

Cincinnati, Ohio

How did you get started at your agency? 

If you ask me my first memory of wanting to go into insurance, I know exactly where I was. I was in eighth grade, at a friend's party. Someone asked me what I wanted to do when I grew up, and my answer was to go to work with my dad in the insurance industry. I always knew I was headed in this direction.

Our agency is somewhat of an anomaly in the marketplace today; a decent-sized commercial insurance agency in a big city that's still a family business and is privately and locally owned.

Why commercial umbrella? 

If you write commercial insurance, you have to be involved in all aspects of it if you're going to do right by your client. Commercial umbrella is a natural extension of general commercial insurance. You have to write a package, auto, workers compensation—and the only way to extend the basic liability contained in those policies is to add an umbrella. It's all part of tailoring the program to the best interest of the client.

Biggest changes in commercial umbrella?

There hasn't really been too much that's changed in the product itself, but there has been a big change in getting it placed today. The market capacity is nil. It's very difficult to find high towers of umbrella because nobody wants to put capacity out. Companies' philosophies and the reinsurance markets have tightened dramatically.

Biggest challenges?

Placing limits. The biggest problem that we have as agents today in the general marketplace is making sure that we have a broad enough market assignment to get high limits placed.

Future trends?

Hopefully, a lessening of restriction for writing. The insurance market runs in cycles, so odds are that if we're in a difficult market placement right now, it's going to stay that way for a while. But what we hope is that the ability to write and to place limits will become much easier, and that minimum premiums will drop back down into the one thousand dollar per million range. 

Advice for a fellow agent regarding commercial umbrella insurance?

Don't undersell your client—always give higher limit options. You can't quantify what they're going to be sued for and you always should provide the decision-making ability to the client, giving them options so they can make the informed decision on cost and limit.

Commercial umbrella is one of the most important coverage lines. It's split between property and casualty, and while property is easily quantifiable, casualty or liability is impossible to predict. You never want to have a situation where the client has a claim that exceeds the umbrella.

Favorite commercial umbrella success story? 

A client came to me with an extremely complicated risk in a difficult-to-place class of business that no one wants to rate. I felt like I was in kindergarten sitting at the shapes table, trying to fit different shapes into holes. I found one carrier that would rate the first million, another that would rate the next tier, and so on—layer after layer, and those were the only layers each of those carriers would rate.

And it worked. Everybody walked away happy. When you're able to place $100 million worth of coverage and everybody's happy, you walk away with a big smile on your face.

AnneMarie McPherson is IA news editor.

Wednesday, May 5, 2021
Commercial Lines