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Mercury General Corporation Message Board

  • SAKA2005 SAKA2005 Jun 28, 2002 7:55 PM Flag

    Mercury entering new classes of

    ...commercial lines biz in CA.

    Looks like a few new Contractor classes / programs are to be added to the BOP portfolio.

    What do ya'll think? I have mixed emotions - but feel if done right - like all else merc is doing - it could be just grand.

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    • is not a four letter word.

      They should avoid those doing exterior work... that are particularly susceptible to mold. They should also avoid generals, particularly those with more than 15% subs.

      Subs are a much better class to write than generals.

      They need to audit, audit, audit. One, to get actual exposures and Two, to keep on top of classification (operational) changes. In my opinion... the smaller the account, the greater the need to audit.

      They need to understand the huge amount of inflationary pressures on contractors.

      They should pick and chose coverages. Try to avoid auto as much of your labor force is probably unlicensed. Workers Comp can also be a problem with a liquid labor force.

      I-M schedules should be monitored for realistic values and utility value. If the underwriters don't understand utility value... don't write I-M.

      My agency places about $1 mil of monoline GL annually for contractors. Our ten year loss ratio in this line is about 20%.

      I'm not a fan of BOPs for contractors. Few contractors fit generic boxes. The biggest problem we have is finding producers that can accurately describe what the contractor does. Most like to use terms like 'carpenter' or 'electrician' with no further explanation.

      We're picking up tons of new business form companies that didn't have a clue what they had. Copies of the old decs show classification errors and pricing that is 30-40% of what is needed.

      Contractors have been given a bad name by lousy underwriters.

    • Commercial lines underwriting requires a lot of monitoring and a significant effort in loss control. My feeling is that companies are successful when they find classes they are comfortable and knowledgable with, and then write the snot out of those classes. Focus is the key.

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