August 24, 2010

I just returned from Scottsdale Insurance Company's owners meeting. This is the annual gathering of the owners of wholesale agencies who do business with Scottsdale. It's an opportunity to mingle with the people of Scottsdale as well as our wholesaler colleagues from around the country.

The mood this year was upbeat. As opposed to last year, the general feeling is that things are getting better. A year ago, the attitude was more of "hunkering down" to weather the double whammy of a deep recession coupled with a soft insurance market. Now there is a very vague sense that something is beginning to happen "out there." We're seeing it here with an increase in new-business applications in the past few months. (Our improved WebQuote is helping that.) The Kiplinger Letter says most of the spending for infrastructure under the 2009 stimulus package is still in the works - that could put a few contractors to work.

If there was any consensus at the gathering, it's that here will not be a suddenly hard insurance market. It will be a long, gradual climb out of the depths up to a stronger, more rational marketplace. As for Scottsdale, they're staying the course on their contract business, i.e. binding authority, but expect to double their brokerage, i.e. big accounts, in the next few years. The company wrote $1.5 billion premium in 2009. Their goal now is $2 billion. We intend to be with them when they hit it.

George Rothert