The new business entity with C.J. Coleman & Company, which will be called Coleman and Kaufman Limited (C&K), expands the existing business of Burns & Wilcox in the London market. Presently, Burns & Wilcox is among the largest providers of contract business to London, and it is now expanding brokerage operations there, the company said.

C.J. Coleman & Company has been associated with Burns & Wilcox for more than 30 years, the firms said in a statement.

“We are very pleased with the prospect C&K presents to strengthen our market in the United States, Canada and Europe,” said Christopher Coleman, group chairman of C.J. Coleman Holdings in London.

Currently, C.J. Coleman & Company Ltd. acts as a wholesaler for intermediaries in many regions of the world, as well as providing risk management solutions for its direct commercial clients. The firm has a wide range of clients including global corporations. According to the firm's Web site, product offerings include nonmedical and medical professional liability, directors and officers liability, employment practices, liquidated damages insurance (for contractual damages incurred by contractors involved in construction projects for failing to meet performance guarantees or completion dates), as well as commercial property coverage in the United States, Caribbean and other parts of the world.

Burns & Wilcox, currently operating with 36 offices in 24 states, provides insurance underwriting and brokerage expertise in specialty lines, professional and commercial liability, property and personal lines. It posts premium volume in excess of $750 million, according to the company.

In an interview at the midyear meeting of the Kansas City, Mo.-based National Association of Professional Surplus Lines Offices, held in Scottsdale in February preceding the joint venture announcement, Mr. Kaufman discussed his firm's desire to expand its global reach.

After describing his firm's efforts to educate its workforce on multiple fronts–with an internal learning management system and a variety of recruiting efforts–he commented, “Our goal is to have the smartest workforce in the industry. We want to be known for being smart.”

He continued, “We think we can leverage our expertise internationally. For instance, we have a very strong umbrella program.” Mr. Kaufman added that while experienced competent underwriters are required to write umbrellas, Burns & Wilcox had only been writing that business in the United States. However, the same principles apply any place else in the world, he said.

Providing an additional example, he noted that Burns & Wilcox writes a guide-and-outfitters program in Denver, but “tours aren't unique to the United States. There are bicycle and rafting trips all over the world.”

Likewise, other participants in the U.S. E&S/specialty lines market have embraced the idea of global expansion in recent years. During a session at AAMGA University in March, Paul Springman, executive vice president of Richmond, Va.-based Markel Corp., described his company's expansion activities since its purchase of London-based Terra Nova Group in Spring 2000.

Mr. Springman told members of the American Association of Managing General Agents that Markel used its acquired London operation as a base for greater geographic expansion–opening offices in Madrid, Toronto, Stockholm and Singapore over the course of the last three years.

“As much as we think of the United States as world headquarters of the insurance industry, the reality is only one-third of the world's property-casualty premiums are written in the United States,” he said, adding that Markel's portfolio is currently distributed in the opposite way–two-thirds U.S. and one-third non-U.S. premiums.

He continued, “We see the opportunities to grow our international portfolio much more attractive in the short run than we do in the United States because of competitive pressures and pricing issues.”

He said that “while the pricing environment internationally is competitive, for most products it does not seem to have the wild fluctuations and cycles that we endure in the United States.”

Expanding economies also provide opportunities for specialty insurers, Mr. Springman suggested.

For instance, five million Chinese people reportedly got their first refrigerator this year, he said. “Think about what that means in five years, 10 years…for third-party liability and directors and officers liability exposures,” he told the AAMGA members, noting that Markel is currently looking at opportunities in China and the emerging economies of Russia and Poland as well.

“It's a huge part of our strategy. And we look at it as a much easier way to grow our overall business,” Mr. Springman said.

Paul Goodwin, client executive for the National Clients division of Munich Re America in Princeton. N.J., speaking at the same session, said that a lot of the reinsurer's clients are seeing their growth over the next two or three years coming in Europe and the Far East.

In addition, “the name that has popped up four or five times to me in the last month is Dubai, which is becoming apparently a hotbed for insurance,” he said. “Dubai has replaced Singapore as the center of interest.”

Continuing an international expansion initiative that began last year with a reinsurance venture, Argo Group announced its offer for Heritage in London on April 2.

During a conference call, Argo Chief Executive Officer Mark Watson noted that the “more international approach” of his company got a jumpstart from Argo's merger with property-catastrophe reinsurer PXRE Group last year. The merger established an international reinsurance operation, now named Peleus Re, in Bermuda.

Commenting on the offer for Heritage, Mr. Watson said the Lloyd's operation and Argo are similar in that both target small-account business. He noted, however, that Argo's U.S. specialty insurance operations, Argonaut Specialty and Colony Insurance, focus on casualty risks, while Heritage has a book that is predominately property.

In addition to a worldwide property unit focusing on commercial accounts, he noted that Heritage does write some liability risks, but these are non-U.S. liability risks–making the operations complementary to Argo's U.S. operations.

According to Argo, Heritage managed total premium capacity of ?315m ($630 million in 2007, and capacity is similar for 2008.

Gross premiums for Argo Group were nearly $1.2 billion in 2007.

The deal is subject to the approval of Heritage shareholders as well as legal and regulatory requirements.

During the AAMGA University session, Mr. Springman also commented on regulatory challenges Markel considers as it expands operations globally.

Responding to an MGA who wondered whether the high degree of regulation in the United States would prompt more specialty carriers to look outside U.S. borders, Mr. Springman said his company's product expertise and regulatory regimes factor into strategic decisions to expand internationally.

“We tend to lead with professional indemnity products,” he said, noting that they are the most profitable product for Markel.

When the company surveyed the European landscape, it found that Germany was well served in the professional liability arena and that five other countries just weren't large enough to accomplish Markel's goals.

The analysis led Markel to a choice between Spain and France, he said, noting that Spain got the nod because of a French regulation requirement that professional liability coverage be written with a 10-year optional extended period. “We just felt that was close to unconscionable and unpriceable, frankly.”

In addition, he said that after a company employs a French national for two years, some very onerous French labor laws kick in–such as a one-year notice of termination requirement and a five-year severance package if they can't get comparable employment.

Spain, on the other hand, offered a growing economy with a high number of professionals, a good business environment in Madrid, “and they wanted us,” he said, adding that the effort to launch a professional liability operation in Madrid is now used as Markel's model for expansion to other parts of the world.