Regional multi-lines carrier Western National plans to become a national surety market within five years, gaining regulatory approval in two states and seeking it throughout the East Coast.
PRODUCT: Surety
COMPANY: Western National Mutual (admitted; Treasury capacity $29.2 million)
BEST RATING: A
AVAILABILITY: Western National accepts submissions from both independent agents and selected brokers. For a possible company appointment, contact Larry Byers, senior vice president of surety.
FOCUS: Western National gains regulatory approval in two more major states: Michigan and Ohio. And the regional multi-lines carrier plans to become a national market within three to five years, Byers says. To achieve that ambitious goal, Western National files for licenses in California and Indiana and rates and forms in Maryland. The company expects to seek regulatory authorizations in various Eastern states including New York, Connecticut and Massachusetts. All that should help the company grow its book, according to Byers.
As a relatively new surety, Western National started writing contract and commercial bonds in January 2011. The company’s property-casualty underwriting mix consists of approximately 60% commercial and 40% personal lines. In particular, Byers singles out a tool that Western National producers use for ease of doing business: e-Surety, which allows a user to quote and issue license and permit bonds online—and might eventually include small contract surety. In response to producer demand, Western National also increases its commercial surety maximums from $7.5 million single and aggregate to $10 million.
UNDERWRITING: For contract surety, Western National serves single jobs as much as $5 million within a $15-million bonded aggregate. But underwriters can arrange as much as $7.5 million for single jobs and $20 million for work programs on a case-by-case basis. In most states, the surety operates with a four-tier rating plan that is comparable to SFAA advisory levels, but more flexible thanks to the company’s debits and credits, Byers explains. The surety can accept collateral in the form of a letter of credit or cash, especially for commercial surety but infrequently for contract bonds. For contract surety, Western National requires working capital and net worth of $100,000 or more.
MINIMUM PREMIUM: No less than $100, except for notary bonds and certain other non-contract bonds.
TARGET: General contractors and standard sub-trades, including drywallers; heating, ventilating and air conditioning contractors; plumbers and electricians; and infrastructure such as roads, highways and bridges.
COVERAGE TERRITORY: AZ, CO, IA, ID, IL, KS, MI, MN, MO, MT, ND, NE, NJ, NM, NV, OH, OR, PA, SD, TX, UT, WA and WI.
CONTACT: Larry Byers, senior vice president of surety; 5350 West 78th Street, Edina, MN 55439; 952-921-5683.
Ron Lent is an IA contributor.
