“The health care industry, for example, demands that you have a practice that works full time understanding the health care industry,” he said. Such a practice, he insists, “can bring specialized solutions to the table that a generalist firm just isn't able to provide.”

“As much as I think I know about the insurance industry, I simply couldn't effectively advocate on behalf of a large hospital chain, because I don't understand the dynamics that are affecting their business or how the underwriters would respond to those dynamics,” he added.

“Every industry has its peculiar risk profiles, exposures and legal issues that if you're not in the business day to day, you're not able to understand them or to appropriately consult with clients and the marketplace on how to solve them,” he said.

In addition, general manufacturing and other firms require brokers to specialize by product, he said, noting Palmer & Cay's expertise in environmental liability, directors and officers liability, and alternative risk financing (the development of heterogeneous and homogeneous captives).

Palmer & Cay representatives gave examples of solutions they recently constructed for customers, including several alternative risk-financing vehicles. In one case, a group captive was created for operators of airport shuttles, non-medial transport vehicles and delivery vehicles in Florida, who faced an extremely limited market for auto liability insurance.

In another situation, a single-parent captive was the answer for a corporation that owns and operates long-term care facilities. Because each facility had significant retentions that, if not insured, were not reimbursable by the federal government, Palmer & Cay's solution had the captive issue deductible buy-back policies for each facility.

“We are of the size to make the necessary investment” in specialized areas like alternative risk financing, Mr. Meathe said, also highlighting specializations in marine insurance, aviation, and specialized property and casualty.

“From the industry perspective, we are very strong in the real estate segment, the health care segment, construction and government,” he said. The firm also boasts expertise in other industry segments, including equine, architects and engineers, hospitality, private equity, and transportation exposures.

In addition, Palmer & Cay offers program services for associations and franchises, including a national p-c insurance program for Dairy Queen franchisees, one for over 500 bowling centers, and another for non-profit service organizations serving people with disabilities including The Arc (formerly The Association for Retarded Citizens) and UCP (United Cerebral Palsy).

“Reinsurance Services is another new venture that we formed about a year ago,” Mr. Meathe said, noting that Palmer & Cay attracted several senior executives from Guy Carpenter to focus on two areas property facultative reinsurance broking and the formation of a property managing underwriter.

Mr. Cay explained that “in serving clients, being able to place the reinsurance is critical to the success of the placement. We wanted to be able to control the quality.”

Beyond expertise in commercial insurance and the delivery of risk management services, Palmer & Cay operates in the personal lines area as well. “That's a clear focus and we've invested significantly in that area,” Mr. Meathe said, noting that the firm has expertise to consult with high net-worth individuals and a strong traditional personal insurance unit.

Over 30 percent of Palmer & Cay's revenues are derived from health and welfare, retirement, human resources, and other benefits consulting a mix that Mr. Meathe called “very rare for a firm our size.” He said he “would like our firm to become even more balanced with half of our revenues coming from the employee benefits segment. I think it's a growing field [with] a strong opportunity to grow revenues. And the more balanced the firm is, the stronger the cross-sell opportunities are.”

Falling in the HR area is P&C Outsourcing Solutions Group, a new venture founded a year ago “that permits small, medium and even some larger employers the opportunity to outsource their HR function,” Mr. Meathe said, explaining that Palmer & Cay takes the responsibility for payroll, HR administration, compliance and other functions.

As for what's next for the firm that grew from its early days as a marine brokerage expert, Mr. Cay said: “Our future will be essentially where our clients take us. We try to stay ahead of their needs as we try and grow the business. It's all about the focus on serving our clients that determines where we evolve.” He noted that the client list now includes the likes of Bristol Myers Squibb and Honeywell as well as much smaller enterprises.

Mr. Meathe noted that a continuing challenge for the firm will be to maintain a middle-market focus while developing very strong credentials in the large account or risk management area.

Reproduced from National Underwriter Edition, April 5, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.