Producer Update: Issue 5 – 2024

Guest Spotlight by Steve Firko, SVP of Business Development, Loss Control, & Customer Service 

As we close out the year, and as I write this on the eve of the presidential election, I am increasingly optimistic about our future at PLM and that of the wood and building material related industries that we serve.  The overall resilience of our economy has been remarkable considering the challenges it has faced over the last few years.  The Federal Reserve began its first in a series of expected interest rate cuts earlier in the year as signs that inflation is finally cooling, and unemployment remains steady.  A recent Wall Street Journal report noted that the U.S. economy grew 3% through the second quarter while none of the world’s next six largest advanced economies grew more than 1%.  Even China is struggling.  Despite the turbulence of the election season, I feel increasingly optimistic that America will not only survive but thrive, regardless of the outcome.  In a 2009 interview when the U.S. began climbing out of the Great Recession, Warren Buffet, the famous investor known for his long-term view and investment approach said, “It’s never paid to bet against America.  We come through things, but it’s not always a smooth ride.”  I believe Buffet is right, I would not bet against America either!

Looking at our own results as we close out the year, we have been growing nicely with premium growth at 15.6% year-over-year.  A major factor for our growth has been the large number of our customers and their brokers who saw value in having PLM protect their businesses and choose to renew their insurance coverage with us.  A typical renewal retention number in the insurance industry is around 80 to 85%.  We have been achieving 90%+ renewal retention rates over the past several years and very much appreciate the faith and trust our insureds have placed in us to protect their businesses year after year.  We also appreciate your reaching out and letting us know how you feel about PLM by completing our customer satisfaction surveys.  Our Net Promoter Score (NPS), which measures customer satisfaction, is in the 80’s, or 25 points above the insurance industry average.  Do we make mistakes? Absolutely, but when we do, we get back to you, apologize, fix it and move on.  I have often told our team members that it isn’t the mistake that matters.  It’s how you respond and fix the mistake that matters.

Further, we are also grateful and excited that more than 630 new policyholders saw the same value in having PLM protect their businesses as our customers who continue to renew with us year after year.  These new customers added close to $37M in premium through the end of October, which is the highest level we have ever recorded at PLM.

We believe a great deal of our success in retaining our customers as well as bringing new customers to PLM is our approach to the distribution of our insurance products and services through brokers who represent the customer to PLM.  We call this approach “open brokerage.”  This allows our customers to pick any licensed property casualty insurance broker in the country to represent them when working with PLM.  As a result, our customers can stay with their local broker when choosing PLM as their insurance company.  We supplement this by creating a triangular communication framework that allows the customer, broker, and PLM to communicate directly with each other at any time.  We believe this transparency and open dialogue helps strengthen the relationship with our customers and brokers as we work together to build an effective and comprehensive insurance program based on a clear understanding of the exposures and unique risk management needs of each business we insure.  Further, we receive such positive responses from our customers and brokers when working together with them in this triangular framework that they often provide referrals for our team members to help them reach out and approach new prospective customers for an opportunity to become a PLM policyholder.

We are also seeing significant growth this year in our PLM in-house agency, Green Tree Risk Partners.  Since we are very selective in our approach to writing new accounts, Green Tree has allowed us to reduce declinations of PLM accounts or round out insurance programs by placing property, casualty, workers’ compensation and other lines of coverage with select carriers who have an underwriting appetite for certain types of wood related businesses or exposures that might not fit our appetite.  As a result, Green Tree Risk Partners allows us to find insurance solutions for an even broader swath of the lumber and building material industry than ever before.

As noted in the last Lumber Memo, there was a rash of large fires earlier in the year totaling over $40 million of losses as well as some difficult weather losses that had an impact on underwriting profitability.  However, due to strong investment income, we saw an operating gain.  Since then, weather losses have continued to have an impact on our results with two major hurricanes that caused a significant amount of property damage across several states.  We have reserved almost $20M in gross losses from both Helene and Milton hurricanes.  Our team members called all our customers who were in the path before the hurricanes made landfall to provide PLM contact information along with weather related safety resources to prepare for the hurricane.  After the hurricanes, we followed up and called our customers back to see if they were ok and to offer help in setting up claims to get them back up and operating as quickly as possible.  Our team members received some very heartfelt responses of gratitude from our customers for these calls.

In closing, I strongly encourage our customers to take more control and ownership in risk management and loss prevention. To help with that, our loss control representatives are available to partner with our insureds through consultative services, helpful recommendations, and custom training plans to help mitigate areas of risk. We also utilize our years of experience in the wood industry and the claims data we have compiled to produce resources, guides, and other safety tools. Finally, we look for new technologies to partner with to provide risk management solutions for our insureds. We do all of these things to not only provide our insureds with the security of paying covered losses, but to actively work with them to build safer and more resilient businesses.

If you have any questions or comments, please contact me at sfirko@plmins.com or by calling 267-825-9184.