Agency holding companies consolidating agencies
While all nonstandard auto insureds come with challenges – new or young drivers, prior violations or accidents, poor credit history, drivers who have lapses in coverage, or just those drivers looking for minimum limits coverage – there are some risks that are much better than others. “You want to stay toward the top of the barrel and get the best nonstandard risk possible.” Smaller companies typically don’t have the technology to compete with some of the bigger players in the market and as a result they are getting the “bottom of the barrel” risks, Burtone says. “It’s been a real whirlwind change in the auto line of business,” Bartone says.“If you want to conduct business in this segment you want to get the best possible risk,” says Joe Burtone, assistant vice president at A. “The underwriting tools over the years have greatly improved.
Three states – Texas, California and Florida – accounted for 59 percent of all direct premiums written in 2013, according to an A. Nonstandard auto insurance has been traditionally defined as a market for drivers who have certain risk factors that make it difficult or impossible for them to obtain insurance in a standard or preferred market.
Industry estimates calculate the market at 30 to 40 percent of the total private passenger auto insurance industry.
According to Conning Research & Consulting’s “Personal Lines Consumer Markets Annual” report published in late 2014, that could from billion to billion in annual premium. Private Passenger Nonstandard Auto Market,” published in November, 2014. Best report, no carrier writes more than 10 percent of the market and most companies have market shares of less than 2 percent.
“In the Sunbelt states – Florida, Texas and Arizona – there’s a greater percentage of the Hispanic auto insurance market that is inherently nonstandard,” Jordan says.
“There are also lots of folks who only want minimum limits coverage and people with an unusual driver’s license status such as a Mexican driver’s license or an international driver’s license that would fall into the nonstandard market. Best Co., is co-author of a report that identifies some of the factors that have discouraged small, regional and single-state writers in this sector over the past decade while favoring larger players.
One specialist that has been riding high in the nonstandard auto world is Confie Seguros, a California-based group of regional agencies focused on Hispanic and C-segment consumers, or those with household income of $30,000 to $60,000 annually.