Rick Lindsey has built Prime Insurance Company using a robust approach to underwriting and claims management, as he explains to Intelligent Insurer.
While the re/insurance industry is in a period of significant challenges, Prime Insurance Company has held fast, providing a stable market for extraordinary risk and earning an A Excellent rating from AM Best.
In the past two decades the company has grown from humble beginnings to be a business with four offices and 182 employees, operating in all 50 US states. A long-time coverholder with Lloyd’s of London, it is now considering establishing a Lloyd’s syndicate.
A key differentiator for Prime has been the decisive leadership of chief executive officer Rick J Lindsey, who has never been afraid to plough his own furrow in the face of practices that he feels are weakening the industry and creating unhappy customers.
Lindsey started in the industry in 1979, having gained a good grounding via his father, who owned a managing general agent and through whom he met numerous agents and brokers.
He spent 10 years working with an A rated insurance company operating across the US before deciding he wanted his own insurance company.
“I knew there was a syndicate called Prime that was looking for a new manager and I was able to buy the old manager out with the goal of getting Prime in all 50 states,” he says.
In the 20 years since then he has achieved precisely that, building the company with no help from investors and favouring a hands-on, partnership-driven approach to underwriting.
“We have been able to grow because people are recognising that what they have been doing is stupid: they want to make buying insurance the same as buying bananas at a grocery store, and it’s actually the furthest thing from buying a commodity,” he explains.
“It has to be a partnership to survive the threat of plaintiffs’ lawyers who, if they have a $30,000 case are going to demand $3 billion—because it works.
“Some 10 or 20 years ago a broker would send in a submission and I would refuse to give a quote until we had completed a pre-underwriting call with the insured.
“We are not going to do business in an arm’s-length, transactional way like a bank would. The most important issue is who is the insured, how are they going to act under pressure—and on the other side of the coin, the insured should be asking the same thing: what are the insurer’s expense ratio and its loss ratio?
“My goal is to talk to every insured and set the track so we have reasonable expectations and, at end of the day, happy customers.”
This approach is paired with a commitment to robust claims defence. By making sure everyone is on the same page at the outset, Lindsey has ensured that Prime occupies a strong legal position—one that is understood by the insured.
This has kept the company free from the issue of social inflation that is causing so much angst for insurers in the US.
Meanwhile, Lindsey is examining the possibility of forming a Lloyd’s syndicate. Prime has issued Lloyd’s paper since 1995 but he believes the time could be right to enter more fully into the Lloyd’s market, particularly if he is able to form a lead syndicate.
“I’ll be happy to form a lead syndicate, because I’ll be the decision-maker,” he says.
“If I’m not the lead syndicate then I’ll want to be dealing with a syndicate that is going to allow me to lead on the claims, not listen to a law firm that has no skin in the game.
“A third option may be a Special Purpose Arrangement that allows me to operate alongside a current syndicate.”
Other new developments include moves to create a new New York-based insurance company for $50 million, and to share Prime’s claims management knowledge and expertise in successfully tackling social inflation through customised claims summits and individual meetings.
Behind all this lies Lindsey’s hands-on approach to leadership, which he believes has grown from many years of diverse experience within the industry.
“My advantage is that I have done every job—I know how to write a policy, underwrite a risk, do an inspection, manage a claim, manage the insured, and go to court,” he says.
“The fact that I can do each job enables me ultimately to find the best approach.”
Prime Insurance Company, syndicate, Lloyds, Rick Lindsey, underwriting, US, buying, social inflation, re/insurance, Special Purpose Arrangement, claims,