Writing lawyers in the Lone Star State
Pillsbury, Dennis H
How would you like to enter a niche market just when that market’s leading association had formed a reciprocal to handle your product and when some of the larger firms had established an off-shore captive? It doesn’t sound particularly inviting. But that’s exactly what happened to Joseph Barnard when he entered Texas to try to build up a book of lawyers liability.
In May of 1979, Joe was approached by National Union to bring the insurer’s lawyers liability program into Texas. Joe, who is a CPA, had a lot of contact with attorneys and “I saw this as a unique opportunity.” He established ProTexn, Inc., in Dallas as an independent agency and started marketing the program. He didn’t know then that by the time the program got started, the Texas State Bar Association would have set up a reciprocal to handle lawyers liability. And to add insult to injury, a number of the major firms formed an off-shore captive.
In addition, National Union did not have a high profile in the market at the time. And besides competition from the reciprocal and captive, Joe faced stiff competition from some well established markets in Texas where General Accident and U.S. Fire had the bulk of the business.
But it wasn’t all bad news. In fact, National Union had some real strengths that Joe could emphasize as he met with agents he hoped to bring on board as sub-producers and lawyers throughout the state, educating them about the National Union program. While the company was not firmly established in Texas, it wrote lawyers liability in some 30 other states and had shown a commitment to the field both in terms of capacity and longevity.
In addition, there was a reason why the reciprocal and captive had been formed and that was a growing capacity shortage that became acute during the mid-’80s. By that time, Barnard’s company represented the “largest block of capacity in the market.”
Also, ProTexn had access to some major firms in Texas that served on AIG’s defense council. (Firms that were used whenever AIG needed local legal representation in Texas.)
But the real key to success was knowledge. The product and capacity were there. But to successfully convince agents to bring their business to him and to convince attorneys to come to ProTexn. Joe had to display an expertise in the field that would make his agency an invaluable resource for both those groups.
“When we go out and meet people, we have to know what’s going on in the market,” Joe explains. “AIG brought us up to speed real quick, but we’ve had to enhance that through involvement with the state and local bar associations.” He points out that not only is it necessary to understand all the coverages involved, but “we have to be aware of the trends in the legal community. We have to know the issues that are ongoing in our jurisdiction.”
That means reading the major law journals, attending seminars of the American Legal Institute of the ABA, attending local and state bar meetings. For example, one journal that is read at ProTexn is Bank Bailout Litigation. This looks at what is happening in the banking and S&L legal arena. “When Congress extended the statute of limitations for some of these cases, we were up to speed on this very early,” Joe notes.
Richard Rathwick, ProTexn vice president, joined the company in 1986 when the agency was going through a lot of growth. In addition to an expanding lawyers liability market, ProTexn started marketing an accountants liability program in 1985. Prior to joining the agency, Rich was involved in the banking field-an area that was becoming increasingly important in professional liability. Rich points out the importance of service in addition to knowledge.
“The long-term relationship that ProTexn has had with people at National Union allows us to provide better service than most other providers of lawyers liability,” he says. ProTexn has some limited underwriting authority that results in “rapid response to clients’ needs. It’s not unusual for us to get a fax from an agent saying he or she needs an answer in 24 hours. That’s something we can do most of the time.”
This emphasis on service also extends to working with agents and their potential clients. If asked by one of their sub-producing agents, one of the ProTexn people will go with the agent to explain the coverage. The agency also has an “800” number that’s “lit up all the time,” Joe notes. The agency also has a premium finance company to help finance what can be “very substantial premiums” in some cases. “We can arrange financing in 10 or 15 minutes,” Joe says.
Word of mouth has been extremely important in spreading the word about ProTexn among agents and lawyers, but that is not the only marketing technique. ProTexn has an extensive advertising and direct mail program. For the lawyers program, “we do a lot of advertising in the weekly Texas Lawyer, and two monthlies–Texas Bar Journal and the Dallas Bar Journal, ” Joe says. The accountants program is advertised in Teas CPA Today and local Dallas CPA media.
When the accountants liability program was started in 1985, “we attacked that program head on. We went down and met with the Society of CPAs and told them we’re here locally and at the same time, started an advertising blitz,” Joe points out. “At that time, our only competition was the AICPA (American Institute of Certified Public Accountants) and there was a real capacity crunch. AICPA was having difficulty with reinsurance. We were able to take advantage of a window of opportunity.”
Today, the windows have closed. Both markets are subject to very aggressive competition. But that has not hurt ProTexn because of its reliance on knowledge and expertise and a long-term view that it shares with most of its clients.
“We’ve been here for 15 years with a stable market,” Joe notes, “and we emphasize that to our clients. In that time, I’ve seen at least 10 to 15 companies enter these markets, hang around for two or three years and then leave when losses started coming in. So have our clients. Most of them want to know that coverage will be there when they need it and that their claims will be handled quickly and fairly.
“We offer claims adjusters who are experts in the legal or accounting field. We’ve got some of the best legal firms on our defense panel if a case has to go to trial. You’ve got to really be on top of things in these fields. It’s not like the ’70s and early ’80s when frequency was very low. That’s changed. Things have become very litigious and frequency is up. Successful claims handling often comes down to ‘how well did your defense firm do?’ That’s why so many companies come and go. But we’re here to stay and that’s one of our strongest selling points.
“We may not be the cheapest,” Joe concludes, “but we’ve been in this line for a long time. We know the rates are right and that we’ll be able to stay in the field.”
The emphasis on knowledge, expertise, service and long-term commitment clearly has stood them in good stead. Despite strong competition, the firm continues to grow. ProTexn insures in excess of 700 law and accounting firms with Joe and Rich serving as the producers. There also are three underwriters on staff–Patricia Eckholm, who has been with the agency for 12 years; Kim Fitzmaurice (5 years); and Jane Turner (10 years). The commitment to a long-term relationship also extends to the staff.
Joe is married to Reba and has two children, Adrienne (14) and Joe (12). Rich and his wife Barbara also have two children–Sarah (14) and Andrew (9).
Copyright Rough Notes Co., Inc. Mar 1994
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