Businesses like to study opportunities carefully to ensure they are making the right decision for everyone involved. Its called due diligence, and many companies wont make a move until it is completed. But then there are deals that come along where, if you dont act quickly, the opportunity will be lost. For Insurance Corporation of Hannover (ICH), a program-writing subsidiary of giant Hannover Re, just such an opportunity came along in the spring of 2002.

The Pennsylvania department of insurance ordered Legion Insurance into rehabilitation, and brokerage firm Lockton Risk Services had to scramble to find a new carrier to handle its BOP business. ICH saw the Lockton business as a good program opportunity but knew it had to act quickly, according to Stephen Fitzpatrick, senior vice president of ICH. Our parent company has had a relationship with Lockton over the years and knows the profit performance of the business in question, he says. So a lot of the process we do with due diligence on a new program was somewhat attenuated simply because we could get some insight from the folks at Hannover Re.

Still, ICH had two important criteria that needed to be met to enter into the deal. First, there has to be an underwriting protocol for each program that allows us to manage the underwriting process, says Fitzpatrick. Second, we need to be able to develop an interface between ourselves and the agents, allowing us to capture the necessary financial information so we can satisfy statutory reporting; the necessary statistical information so we can report to ISO and various_regulatory authorities; and the underwriting information so we can manage the business and generate an underwriting profit.