Rogers & Gray Insurance is one of those agencies that always is making news. Since Agency Checklists started in 2011, thirty-four different articles have either mentioned or featured something newsworthy that Rogers & Gray was doing in the Massachusetts insurance market.
A June 1 press release from Rogers & Gray announcing the agency had opened a managing general agency offering admitted policies with an A- rated insurer to Cape Cod’s coastal homeowners especially caught Agency Checklists’ attention.
The press release offered that Rogers & Gray had established its new MGA—Monomoy Insurance Group—to meet the needs of an insurance market where the Mass Fair Plan predominates. In entering this market, the agency said Monomoy would have Cape homeowner insurance rates comparable to the Mass Fair Plan, but with enhanced coverage options and improved hurricane deductibles.
Agency Checklists wanted to learn more about how Rogers & Gray was able to put together a coastal homeowner program with a rated and admitted carrier at competitive rates.
Rogers & Gray’s Chief Marketing Officer, Lynn Mason-Small and Chief Operating Officer, Erin Schaaf, CPCU, were kind enough to take the time to give Agency Checklists some of the background and initial results of this program since its official launch in mid-April.
Thank you taking the time to talk to Agency Checklists about Rogers & Gray’s new company, Monomoy Insurance Group. Can you tell us what it is and what it aims to do?
Erin Schaaf:
Monomoy Insurance Group is a DBA that Rogers & Gray has launched in Massachusetts. Through its association with the Spinnaker Insurance Company, an A.M. Best, A-minus rated company, Monomoy is now offering a new coastal homeowners program here that is fully reinsured with eight different insurance companies through the London market.
The program’s goal is to meet the needs of an underserved insurance market by offering rates comparable to the Mass FAIR Plan, but with enhanced coverage options.
How did the idea to create your own MGA come about?
Lynn Mason-Small:
The idea originally came from one of our partners, John Gaynier, who had a connection to the London marketplace. So, he was initially the first one to reach out to his connections there and to begin talking with them
about the possibility of creating a commercial lines program.
From there, the discussions evolved to the Personal Lines market and the possibility of creating this homeowner’s product. At that point, Michael Robinson, who is the chairman of Rogers & Gray, really ran with the idea.
There were a number of meetings over in London to meet with all of the re-insurers, to put together the program. I would say at least five total trips to specifically meet with the London group. There was also a lot of travel to New Jersey, too, in working with the Spinnaker folks.
Overall, there was a tremendous amount of effort involving hundreds and hundreds of hours of work for our entire team to put this together.
How long would you say it took to put this together, from start to finish?
Lynn Mason-Small:
About 18 months.
So where is the primary market for Monomoy?
Lynn Mason-Small:
Right now, our primary market is the Cape and Plymouth counties.
When did the Monomoy program officially launch? And how has the response been?
Erin Schaaf:
We went live in mid-April, and the response has been fabulous. The focus in mid-April when we went live really was on FAIR Plan conversions for Rogers & Gray’s insureds, and that response truly was overwhelming. In May, we released the product to our producers, our own sales force, and they too have met with success in talking to new customers and starting to quote organic new business.
Is Monomoy going to be appointing brokers or agents, or is it going to be an in-house MGA?
Erin Schaaf:
Currently, Monomoy is not appointing any brokers or any other agents. I would not say that that is off the table in the future, but for now, it is exclusively Rogers & Gray that can write in the Monomoy program.
Are Monomoy policies issued on admitted paper?
Erin Schaaf:
Yes.
What prompted the decision to create this program? Was it in response to what you heard from your customers, or did you mainly see an opportunity where Rogers & Gray could provide something more competitive and comprehensive?
Lynn Mason-Small:
It is a little bit of both. While there was an opportunity that we saw there, the primary driver of this initiative was to serve an underserved marketplace, particularly in the coastal homeowners market. Our clients were asking us, “Is there any other place for me, other than the FAIR Plan?” Unfortunately, in many cases, our answer had to be no. So this was an opportunity to provide greater coverage for our clients.
Where do you see this coastal homeowner program fitting into the marketplace?
Erin Schaaf:[pullquote]There is so much that has been written about the Insurtech space, and the death of the independent agents, and how the industry is changing so quickly, and it is. However, you can control your destiny. There is an opportunity here for the independent agency space to innovate, and to think outside the box, and to think about how can we control our space. – Lynn Mason-Small [/pullquote]
Rogers & Gray is taking the approach that we can provide better coverage than the Massachusetts FAIR Plan. As you know, the FAIR Plan has become kind of the insurer for the coast, with many voluntary insurers, admitted insurers, having stepped away from this market. At Rogers & Gray, we feel that, with this new product, we can provide better coverage than the FAIR Plan at the same rate, or perhaps even a better rate, to customers.
What about the underwriting guidelines that Monomoy has. How broad is the scope of the risks that you will write as compared to other carriers?
Erin Schaaf:
We are beginning conservatively, so the guidelines are drafted towards a more preferred book. Some of that is proving ourselves to the London markets. With that said, we will write up to a $1 million coverage A, and we will write right up to the water for all of Cape Cod and Nantucket.
Are there any other admitted carriers offering what Monomoy offers?
Erin Schaaf:
Of course, Rogers & Gray was already in the position of writing Cape coastal homes, right up until the point that Monomoy went live, so we do have other carriers in the shop. What we do not have, however, is the combination of an A.M. Best rated admitted carrier and the kind of coverage that we are now able to offer through Monomoy.
How big a market do you see for this program, down on the Cape and in Plymouth County?
Lynn Mason-Small:
Currently, the FAIR Plan insures about 65,000 homes on the Cape, so there is a pretty substantial opportunity there. Naturally, all of those homes now on the FAIR Plan will not be moved over to Monomoy, or cannot be moved over to Monomoy, due to underwriting guidelines, but there are a substantial number of homes that are with the FAIR Plan that may get better coverage under Monomoy.
What about the North Shore, Martha’s Vineyard or inland Mass?
Erin Schaaf:
We have London-backing to write all across the state, and we have filed rates for all of Massachusetts, but these areas are not a focus for us right now, in these early days.
Monomoy is operating as an MGA…how much of the actual processing of the underwriting, and the policy issuance and policy maintenance is Monomoy doing? Or are all those functions done by Spinnaker?
Erin Schaaf:
It is all Rogers & Gray, or Monomoy. The agency had to go out and evaluate policy processing systems and purchase one as well as go through the development and implementation of this new system. That we were able to establish the policy processing system, with all of the specific needs of the Monomoy program in just four months’ time, is just record-breaking.
With regards to the policy, what happens concerning the premium billing? Does Spinnaker do that or does somebody else handle it?
Erin Schaaf:
No. That is all done by Monomoy, in the policy processing system. The system we have installed is a quoting, issuing, billing system. In our next release, which is due shortly, it will be integrated with our claims TPA. We are also building integrations to the property score provider, to the replacement cost estimators. Essentially, all of the back-office operations of the carrier are based here and handled by Monomoy.
What kind of system did you have to put in place to handle all of the workload associated with the new program?
Erin Schaaf:
The agency worked with Innovative Computers to create our customized system. While we bought a system used for homeowner’s products in various places across the country, we had our own implementation of their system developed specifically for us and our needs. Innovative Computers runs several FAIR plans across the country. So, there was a real benefit to using someone who could get us up and running quickly, in addition to having them be able to create and implement our own customized version of their system.
What about cancellations? Who handles that?
Erin Schaaf:
No, cancellations are handled by our system as well. All of the forms are produced by the policy system. Eventually, it will download directly into our agency management system. We had to break out all of the various implementations, but, we did a complete rules, rates, and forms filing with the state. All of that work came out of the agency.
Did Rogers & Gray have to essentially create a whole new team to handle Monomoy and all of the work involved in running it?
Erin Schaaf:
We made use of in-house help right up until we hired the underwriter, and now she has become so busy that we have assigned a summer intern coming in as her assistant underwriter, while we sketch out what the Monomoy team will need to look like. Aside from these two hires, however, the work was mainly done by a team effort of the agency’s employees including the director of business process, the CIO, the CFO, Personal Lines Staff, the Chairman, Lynn, and myself.
What a great example of agency innovation. What would you say to other agents or carriers reading about Monomoy here? What lesson would you like to leave with them?
Lynn Mason-Small:
What I would say to them is “A rising tide lifts all boats.” There is so much that has been written about the Insurtech space, and the death of the independent agents, and how the industry is changing so quickly, and it is. However, you can control your destiny. There is an opportunity here for the independent agency space to innovate, and to think outside the box, and to think about how can we control our space. How can we maximize our space? How can we make an impact in the area that we are in for our clients? I guess that would be the most important piece that I would love to get across.
