Course#8 - Insurance - ENG2412 - Praetorian's specialty Insurance, Case Study

Praetorian Financial Group (PFG) was part Hannover Re specialty primary insurance platform. As of December 2006, PFG officially became a subsidiary of QBE North America, a division of QBE Insurance Group. Despite the transition, PFG retains all the companies working under its roof including:

  • PIC (Praetorian Insurance Company), formerly Insurance Company of Hannover. It has the license to sell and underwrite insurance policies in all 50 states. The head office is in Illinois.
  • Praetorian Specialty Insurance Company. The head office is in Delaware, and it sells and underwrites non-admitted insurance policies in 37 states.

  • RIC (Redland Insurance Company). It has the license to sell and finance admitted business in 45 states.

Praetorian specialty insurance program alone contributes about $1.4 billion to the company’s annual gross. The company has more than 200 staffs in the New York headquarter. Primary distribution channels are specialist retail agents and managing general agents all across the United States.

The underwriting strategy of Praetorian Insurance Company focuses on authority coverage to small and mid-sized clients. The emphasis for both clients is on specialty business and ineffective limits insurance. Property and casualty lines have enough types of coverage and flexible limits to cover a broad range of customer types and geographic regions.

Acquisition by QBE Insurance Group

QBE Insurance Group is the biggest general insurers in Australia. QBE North America is one of the group’s sub-divisions covering North American regions. Praetorian Financial Group along with all companies working under its roof officially became parts of QBE North America in December 2006, yet PFG’s lines remain the same despite the new parent company.

QBE’s business strategy in the U.S. focuses indeed on acquiring leading insurance corporations, which in turn enhances or adds target customers into its scope. By making acquisition after acquisitions, QBE broadens its scope targeting:

  1. small to medium regional businesses
  2. short and long terms insurance relationships that meet profit expectations
  3. quality management underwriters and teams
  4. specialist business
  5. development of the middle market property and casualty product lines
  6. long-standing agencies and brokers relationships
  7. broader geographical range and product diversity

The existing QBE’s specialty lines in North America are similar to those of PFG. Before the acquisition, Praetorian Specialty Insurance Company has the license to sell and underwrite only in 37 states in the country, but QBE North America has to broaden the scope that the subsidiary now covers all 50 states including District of Columbia and Puerto Rico. Specialty lines include the following insurance products:

  1. ACCIDENT & HEALTH
  2. AVIATION
  3. INLAND MARINE
  4. MANAGEMENT LIABILITY & PROFESSIONAL LINES
  5. TRADE CREDIT
  6. SURETY
ACCIDENT & HEALTH

Accident and health insurance provide coverage for employees separate from their own company’s coverage. With the rapid development of healthcare technologies and medical science as well as higher insurance limits, the coverage from employers’ companies can be limiting. Praetorian Insurance Company, with all its expert underwriting teams and excellent technical resources, provide competitive products and help brokers to protect clients and grow their businesses.

AVIATION

Running an aviation business, renting, or owning an aircraft is risky. When a property has more value, people also have higher risk and substantial liability exposure. Praetorian Insurance Company, with assistance from QBE, is one of the prominent entities in aviation insurance. The company has been working on aviation insurance and covering numerous clients across the Asia Pacific. A team of aviation experts possessing real world aviation experience handles the underwriting process, allowing to have affordable yet comprehensive insurance protections. Some of the benefits are:

  • Reward programs for every client who demonstrates commitments to safety. For those with lower risk insurance, the benefits can reduce the cost as well.
  • Wide array of payment options to help clients manage cash flow.
  • Team of underwriters from Praetorian Insurance Company has the expertise and experience in all types of aviation businesses.
  • Coverage solutions for all the main types of aviation risks including for light aircraft, corporate jets, and airports.
  • Solutions to get back into business following claims, so clients can get into business as soon as possible.
NLAND MARINE

From small companies to giant corporations, Inland Marine Insurance from Praetorian Insurance Company covers an extended range of coverage for every need. Key benefits and features are:

    Maximum capacity limit of up to $250 million. The primary targets for Inland Marine insurance are $25,000 and up. However, any client with the maximum limit of $10,000 is in the scope as well.
  • Flexible terms and conditions for different needs
  • Local staff with better understanding of perils
  • Multi-year capabilities
  • An optional package coverage of warehouse and truck cargo legal liability
  • Option to combine both time element and real/personal properties coverage
  • Builders’ risk with broad appetite including the ability to write primary, excess, and share placements

MANAGEMENT LIABILITY & PROFESSIONAL LINES

Management Liability & Professional Lines offer robust solutions including Commercial Errors & Omissions, Fiduciary/Crime and Bonds, EPL, as well as Directors & Officers Liability. Every policy is specific to every company’s needs.

TRADE CREDIT

It is the coverage that provides company to mitigate political risk, overdue accounts, and customer insolvency. Primary benefits include Risk Mitigation, Trade Finance Tool, Balance Sheet/Cash Flow Protection, and Trade Credit Insurance Asset as Collateral. Trade Credit insurance is available for large corporations or new company.

SURETY

Praetorian Insurance Company Surety provides contract bonds to middle-market contractors. For a single range program, the bond can go up to $50 million, and it can reach up to $150 for multiple program range. Support for commercial bonds is available from a small license, permit bonds, and full range of fiduciary and court bonds.


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