Napco opens global property coverages to smaller brokers
By Phil Zinkewicz
George Pagoumian (seated, right) is founder and CEO of Napco, LLC, based in Edison, New Jersey. Other Napco executives include: (seated, left) Chief Operating Officer David Pagoumian, (standing, left to right) Senior Vice President John R. Barrett and Senior Vice President John G. Pagoumian.
Most remarkable journeys have simple beginnings. Such is the case of George Pagoumian, a boy who sailed to the shores of the United States in 1959 and went on to create Napco, LLC, the largest independent wholesale consolidator of global property insurance. Armed with a vision that it was possible to couple global brokerage firm assets with the nimble value-added service component of regional firms, George set up Napco in Edison, New Jersey, to bring the dream to reality.
Napco exemplifies the concept of understanding the past in order to envision the future. Prior to founding Napco, George spent several decades studying the property insurance marketplace and, in the 1990s, noticed that acquisitions and mergers had decimated the ranks of the regional retail brokerage community. At that time, he was launching the national accounts property division of Tri-City Wholesale Brokerage. However, he saw the changing landscape as an opportunity to create a wholesaler with the knowledge and ability to keep regional brokers in the game.
In 1996, he established Napco as an intermediary platform that could service large accounts and provide regional players with the technology, services, and market power to maintain sustainability and provide competitive solutions to discerning clients. "We initially set out to 'level the playing field' for our regional broker partners," George says. "However, in time, we weren't satisfied with merely leveling the playing field; we wanted to elevate it."
Listen first--then deliver
Chief Operating Officer David Pagoumian goes on to point out that much of the success of Napco has come from "our knowing how to listen. When we first meet with a potential partner, the broker or agent, we like to ask them to describe the feelings conjured up when they hear the term 'wholesaler.' The responses vary, but many express concerns with the process by which a traditional wholesaler operates. They fear the inability of a wholesaler to provide true value-added service."
By engaging in an open dialogue with potential clients early on, Napco is able to create a new perspective of wholesale operations. "We explain that our mission is to lead and extend the boundaries in which we access capacity while being attuned to our customers' needs," David adds. Through staff experience and the ability to understand and address the core needs of its clients, Napco leverages its knowledge of the strategies used by global brokerage houses to develop winning solutions for its retail partners.
"Our goal is to strengthen and solidify the relationship of our partner broker with their client," David says. "We recognize that the cost incurred by our partners to obtain new business is high, and thus we focus on helping them retain their clients, especially when it involves competing with larger firms." One example of this occurred with a southeast retail broker that found itself in competition with a national broker on a long-term telecommunications client. The retailer came to Napco and Napco delivered by restructuring the existing program, improving coverage terms and conditions, and providing additional catastrophe limits. The retail agent and Napco met with the client and provided a comprehensive proposal and the technical stamina for implementation. The retailer retained the account.
The strong relationship Napco has with its retail partners has earned Napco a 95% retention rate, and a list of impressive property clients including many household names in the area of retail, restaurants and hospitality as well as a large public entity and real estate clientele. Napco maintains four U.S. branch offices in Connecticut, Texas, Ohio and Virginia as well as international operations in Bermuda.
Looking under the hood
Napco's client relationship begins with a thorough qualification process. The company is known for asking a lot of questions upfront. "We would be doing our retail partner and their client a disservice if we didn't ask a lot of questions," says John Pagoumian, senior vice president. By digging deep into an account, analyzing the marketing strategies, and providing services and technical capacities, Napco helps its partners to quantify the feasibility of an opportunity.
Napco believes that analyzing a partner's program is much like restoring a classic automobile. "Oftentimes, people try to just 'apply a fresh coat of paint' and consider the job complete," says Senior Vice President Robert Marsh. "We're interested in checking under the hood to ensure that all is in perfect working order." Looking under the hood for Napco involves performing a comprehensive program review with its retail partners. This includes a complete policy analysis to identify unaddressed exposures, coverage gaps, and opportunities to broaden coverage language. Napco identifies potential problem areas and proactively addresses the situation before a program is presented to its partners.
Like most successful companies, Napco recognizes the importance of both human capital and technology. The company employs some of the finest property specialists in the industry and has built a team of 35 dedicated employees with an average of 20 years' experience in the property insurance arena, all of whom are supported by some of the most sophisticated technology in today's insurance industry.
Delivering the competitive advantage
In the current information age, the key to winning and retaining accounts lies in the access and delivery of accurate and timely information. Napco quickly recognized the fact that in order for regional brokers to compete with larger firms, they needed to gain similar access to state-of-the-art modeling and intelligence systems. To this end, the company gained in-house licensing for catastrophe modeling from Risk Management Solutions.
"Catastrophe models have revolutionized the way in which both the underwriting and risk management communities identify and manage exposures prone to natural catastrophes such as earthquakes and hurricanes," says David Pagoumian. Such catastrophe management services are offered to clients by many of the larger global brokerage houses, and it is precisely this type of service that becomes an important factor for risk managers when deciding on the broker they want to utilize for insurance placement.
In addition to catastrophe modeling access, Napco has developed cutting edge internal brokering systems that allow their partners to efficiently identify effective marketing strategies. By capturing and utilizing critical market intelligence, the company allows its brokers to isolate the sources of competitive capacity, identify market trends and competitor strategies, and provide partners with a comprehensive view of the insurance landscape. "Our goal is to utilize this wealth of information in a manner that allows our partners' clients to make informed decisions," says Senior Vice President John Barrett. "When a client is empowered with information, it drastically reduces the cost associated with placements that might otherwise result in weeks of back and forth. The end result is a satisfied client that is confident with the program they have purchased. And it allows our retail brokerage partners to play in a new league with the ability to offer competitive technical services and proprietary exposure and claims analyses while still delivering the customized care their clients have come to rely on."
Napco's newest challenge is to address the issues that hinder U.S. broker access to the Bermuda markets. Due to legal limitations, Bermuda insurance companies cannot entertain business directly from U.S. brokers and agents; instead, U.S. entities must submit their business through a correspondent broker established on the island. The effect of such disjointed communication is that U.S. brokers are largely disabled from building a rapport with the Bermuda underwriting community and receive either an authorization or declination for their submitted risks with little to no feedback. Napco is doing something to change this dynamic. The company, which boasts 120 standard, surplus lines and global insurance/reinsurance markets located throughout the United States and Europe has recently established "Bermuda Direct Access" (BDA), a program that allows Napco's U.S. partners to establish direct access to the increasingly important Bermuda markets.
In a little under a decade, Napco has accomplished much toward its goal of forging a place for smaller players. It has done so by listening to the needs of its retail broker partners and then addressing those needs with new tools and progressive technologies. *
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