The program, offered under the ISO form CG0001 12-04, provides broad coverage and flexible terms and conditions, across a broad range of classes, the two firms said.

The program is available for risks in Arizona, California, Colorado, Florida, New Mexico, Nevada, Oregon, Texas, Utah, Washington and Wyoming, with a low minimum premium of $2,000.

Highlights include: no tract or multifamily limitations, broad duty to defend, no punitive damages exclusion and silence on subsidence. In addition, in most states, it provides defense outside the limits and there is no “prior works” exclusion.

“In this challenging time for the construction market, many subcontractors are finding it difficult to secure affordable liability protection,” said Joe George, president of IronBuilt. “Our new facility is designed to help subcontractors navigate safely through this period without experiencing damage to their bottom line.”

In August, Mr. George told NU how IronBuilt is navigating past a different challenge–that of starting up a new insurance operation in a soft market.

“Our philosophy is you can't time the market,” Mr. George said. “You have to pick a good core line. You have to have good people, have the right distribution, do the right things, and then you will be there when the market opportunity does present itself,” he said.

“Right now, we're probably paying underwriters to take more of a defensive position than an offensive position,” he observed. “We realize that, but our strategy is to be in place and to be able to capitalize on the market strategies when they do present themselves.”

With the comment, Mr. George pretty much summed up the thinking of Ironshore CEO Robert Deutsch, and two other leaders of new underwriting divisions at Ironshore.

“In this soft market, you just need to be very patient,” Mr. Deutsch told NU. “You need to build infrastructure, [and] you need to realize you're going to lose money for the first year or two while you get the teams in place.”

More information on the history, key milestones and distinguishing characteristics of Ironshore's U.S. specialty businesses is presented in summary form below.

Next month, E&S/Specialty Lines Extra will profile another recent Bermuda entrants to the U.S. specialty insurance market–Valiant Insurance Group.

NAME: IRONSHORE INSURANCE

Milestones: Founded in early 2007 as a commercial property insurer. Launched IronPro in May 2007, and IronBuilt in October 2007, expanding into professional liability and construction markets. In March 2008, launched IronHealth.

In January 2008, completed acquisition of a U.S. E&S company, renaming it Ironshore Specialty Insurance Company. In November 2007, acquired a U.S.-based admitted insurance company renamed Ironshore Indemnity.

Recent developments include: entering the Lloyd's market with the proposed purchase of Pembroke Managing Agency and Syndicate 4000 for roughly $34 million in a deal expected to close by Sept. 1; the launch of IronSelect, an excess casualty division, in July 2008, which division president Robert Piller expects to be up and running on Oct. 1.

Locations: Bermuda (property); New York (IronPro and IronSelect); Boston (IronBuilt); Simsbury, Conn. (IronHealth).

IronHealth also has offices in Chicago, Los Angeles and Atlanta.

Authorizations/Approvals: Ironshore Specialty Insurance is authorized as a surplus lines insurer in 47 states, including the biggest E&S state, California, where authorization was granted in October.

No. of Employees: As of early August, excluding London, Ironshore had 120 people, with 45 in Bermuda and 75 in the United States, according to Mr. Deutsch. Breaking down the U.S. labor force, he said more than 50 work in the specialty divisions–roughly 30 at IronPro, 21 at IronHealth, five at IronBuilt and one at IronSelect.

The rest work in a U.S. service company.

Who's In Charge: Robert Deutsch, CEO, was one of the founders of Executive Risk, now a part of Chubb, and the former CFO of CNA Robert Deutsch.

More People To Know:

o Greg Flood, president of IronPro, who was previously EVP and COO of AIG's National Union Fire.

o Joe George, president of IronBuilt, whose 30-year career includes his most recent prior position as a program administrator for Bermuda-based RenaissanceRe. Prior to that, he ran the casualty insurance division at AIG's Lexington Insurance, and before that he started the E&S operation for USF&G.

o Robert Piller, president of IronSelect, who spent the last 10 years on Zurich's senior management team for umbrella liability, managing six branch offices. Beginning his insurance career 30 years ago at the Home Insurance Company, he also spent 15 years writing facultative reinsurance at Odyssey and Continental Re.

o Matt Dolan, president of IronHealth, who in 2002 started OneBeacon Professional Partners, a specialty lines division of One Beacon with focus on health care liability. Eighteen years in the industry–entirely focused on professional liability–also included tenures at Continental (and CNA upon its acquisition) and Executive Risk (acquired by Chubb).

Target Product Mix: With its roots in the property cat business, $300 million of gross premiums written through six months remains largely property–split 83 percent property/17 percent casualty. But the complexion has changed from 2007, when 99 percent of the book was property, and in 2009, Mr. Deutsch expects property to drop to 60 percent of the total pie.

Breaking down the casualty piece for 2008, Mr. Deutsch said 60 percent resides in IronPro, with 20 percent each in IronHealth and IronBuilt.

At IronBuilt, Mr. George said two types of specialty construction business are being written–wrap-ups, including residential and light commercial wraps (covering the owner, general contractor and subcontractor under one policy), and individual liability policies for individual subcontractors. IronBuilt stays away from individual policies for general contractors and homebuilders.

All the construction business is written on a nonadmitted basis–”the only way I'd do it,” Mr. George said, citing the flexibility to draft endorsements and tailor terms for residential business.

For excess casualty at IronSelect, Mr. Piller said the intent will be to focus on middle market–below Fortune 2000 accounts. “We're not going to be looking to write auto, chemical or pharmaceutical manufacturers, he added, also noting that construction is a targeted class.

“I'm certainly assuming if we get the right attachment point that we would be in a lead umbrella position, but because we're new, I have a feeling [established] markets are going to want to hold onto the business, he said, predicting IronSelect will probably come in excess of $10 million or higher.

IronHealth's main focus is on three specific areas–excess hospital professional liability, long-term care (predominately in the skilled space) and managed care organizations (ranging from the largest nationals to small satellite ancillary MCOs).

Mr. Dolan said the IronHealth team's overall approach involves “delivering a demonstrably superior product to insureds with a track record of outperforming or purchasing risk transfer in a very thoughtful, carefully constructed way.” Product innovations include first-dollar evacuation coverage and risk management dollars to pay for loss control services.

He also noted, however, that IronHealth has a customized risk unit, which crafts solutions for challenged insureds. He provided the example of a skilled nursing facility in the tough Dade County venue, which might warrant a combination of traditional excess and loss-sensitive cover.

Distribution Strategies: While all the new divisions are using wholesale brokers to some extent, individually, Ironshore leaders outlined different distribution approaches.

“We're not an open market,” said Mr. George, adding that IronBuilt deals with a small number–roughly a dozen–of approved wholesalers. “We want to deal with brokers that give us first and last look,” he said, adding that wholesale partners also need to specialize in construction.

At IronSelect, Mr. Piller said he'll rely on wholesalers to open his one-man shop up to the world. “I want to deal with professional wholesalers that have been around, that have strong relationships with retail brokerage community and can provide me with a history on the business that I certainly couldn't get on my own. I'll be depending on them to do that.

“I've been in touch with every major wholesaler in the country already,” he said.

At IronHealth, distribution is split between retailers and wholesalers. With the exception of long-term care coverages, “we are open brokerage, meaning anyone can access us,” Mr. Dolan said. “But we are very focused on finding the right partners who can understand the meaningful difference of our organization and its approach, and are able to sell that back to their customers.”

As for long-term care, he said the unique aspects of that marketplace explain the need for limiting the distribution force to a select group of pre-appointed producers.

Goals for 2008, 2009: “I would want all of the U.S. producers invested in the health care space to be able to describe our capabilities,” said Mr. Dolan, imagining Ironshore being described as “smart, selective” and as having “a better product than anyone in the world” for qualifying risks during a “proverbial elevator minute.”

Mr. George and Mr. Deutsch described the goals of writing business while maintaining underwriting discipline.

The soft market environment “makes it very tough to get into a business in a big way,” Mr. Deutsch said. “The idea that you get into the D&O business and write $100 million in your first year is ludicrous.” The only way you do that is to drastically slash prices and create underwriting losses, he said.

With $400 million in gross premiums across all units by year end, he predicted overall volume would stay flat in 2009 if the soft market continues. He said the build-out of the newest Ironshore businesses would likely offset volume drops in older units resulting from overall price declines.

“In this soft market, you just need to be very patient,” he said. “You need to build infrastructure, you need to realize you're going to lose money for the first year or two while you get the teams in place.

“One advantage of being a private company is you can actually make those investments more easily than when analysts are looking at your results every quarter,” he continued. “So we can go and hire Bob Piller, know that he's going to lose money in 2008 and maybe break even in 2009, but position ourselves for when the market is ready for him to write a lot of excess casualty business.”

“On a GAAP basis,” both new divisions–IronSelect and IronHealth–”will lose money absolutely in 2008, but we can make that investment because long term it's a great move for us,” he said.

Competitive Advantages: Going forward, Mr. Dolan said the fundamental challenge for new U.S. specialty players like IronHealth will be making sure producers “have a full appreciation of the meaningful differences” between their approaches and those of other specialty players.

While Mr. Dolan highlighted “meaningful product enhancements” (such as evacuation coverage for medical facilities faced with disease outbreaks and natural catastrophe risks), and Mr. George highlighted a “true underwriting culture” as a distinguishing feature of Ironshore's businesses, CEO Robert Deutsch focused on the fact that individuals in each of Ironshore's divisions are energized by an entrepreneurial spirit–and willing to take equity risk to prove it.

“[Bob] Piller is not going to get rich on his base salary,” he said, referring to the newest divisional head at IronSelect. “He'll cover his bills. He's going to get rich if he does his job right. He'll get rich on performance bonuses and equity ownership,” according to Mr. Deutsch, who added that “for people willing to take that kind of entrepreneurial risk, Ironshore is a fantastic home.”

Mr. Deutsch also listed creativity and responsiveness among Ironshore's key competitive advantages. “We are a nonbureaucratic organization. When clients speak with underwriters, those underwriters are empowered to make decisions. There are no committees,” he said.

“If it makes underwriting sense, we'll do it. There's no black box,” said Mr. George.

“We are a nonbureaucratic organization. When clients speak with underwriters, those underwriters are empowered to make decisions. There are no committees.”

Robert Deutsch, CEO, Ironshore