Wilson: Although only about 5 percent of our book of business is marinas and boat dealers, it's one of our fastest growing niches. We currently write marinas and boat dealers in 6 states; Michigan is our lead state, with lots of boat dealers on the Great Lakes and Ohio. We pick markets that are essentially underserved. Boat dealers have been affected by the recession, but not on marina side. For some reason, boats are one of the last things people get rid of and high-quality marinas are 99 percent full. We're seeing some go under, but even these are being picked up by larger entities and are still full.

However, the economy has had an effect on the boat side, especially on dealers. The model has changed: although they're not selling as many new boats as in the past, there is a more active used boat market, so you see boat dealers doing new and used sales. There is also an increasing market for boat brokers because many banks will sell repossessed boats.

How has the business changed since your business's inception?

Atlass: We have grown from one employee to 43. The yachts we insure have grown in value by equal proportions. When we were formed in 1981, a $4 million hull value was a major yacht. In 2010, we are insuring yachts with $200 million hull value.

Troutman: In the past 5 years we have seen more changes in the boat insurance arena than the previous 15 years. The hurricane season of 2005 was the straw that broke the camel's back. We first saw insurance companies trying to restrict the amount of business they would write in hurricane-prone areas. This did not work because when one company made a restriction, all the other companies followed and made their own additional restrictions. Then, many companies stopped writing boat insurance altogether or introduced policies excluding named or numbered storms or other underwriting requirements. This made making boat insurance hard to place in these areas. This is still true today. Non-hurricane areas are wide open and every company wants as much boat insurance in these areas as possible.

How much of your business comes from working as a specialist to agents, and how much is in directly dealing with customers?

Atlass: We have a retail and a wholesale division. Our income is divided fairly evenly between them.

Troutman: We have business with more than 5,000 agents in all 50 states. Our success with agents comes from the expertise we provide that is necessary to understand the different boat insurance policies that are available. Not all boat policies are the same. The policies can vary greatly and depending on the needs of the insured and the type of boat, it is not a “one policy fits all.”

Wilson: One hundred percent of our business is through independent agents; we do no direct business. Our key states are Michigan, Ohio, Texas, Kentucky and Tennessee. Having an agent on the ground who can go see a risk and has a relationship with the owner means he can be our eyes and ears. As an underwriter, I may not know the nuances of exposures in Kentucky, but someone who's there and knows the marketplace does know it. It's like the traditional advantage of using an indy agent from carrier side. From the agent's standpoint, they get access to program that is an A-rated admitted product with a specific form strictly developed for those industries, with very broad coverages. We also do claims administration–everything from soup to nuts.

Who are your primary insurers for your marine-related coverage?

Atlass: We represent most of the major domestics that offer coverage for our specialties, including ACE, Chartis, Chubb, Fireman's Fund, IMU One Beacon, Progressive, Seaworthy, Travelers and Zurich. We are also a Lloyd's cover holder and have our own Lloyd's yacht facility.

Wilson: Our sister company, Great Midwest Insurance Co., is our sole provider; both Bunker Hill and Great Midwest are owned by Southwest Insurance Partners.

What typical risks do your clients face?

Atlass: We address all types of commonplace risks for our clientele, but take great pride in addressing and finding solutions for unusual and difficult placements.

Wilson: Marina risks are all over the board; we don't run into frequency issues but severity. Weather is always a concern because lots of property is out in the open and exposed, similar to a car lot, so we see hail losses, wind damage, and related losses, which are probably the most common areas.

Because of this, the best thing we can do is to underwrite carefully on the front end and look at each exposure. For example, is the marina located in a cove and protected from the wind? We do this in the selection process and work with our agents to evaluate programs. If the risk is in a bad location, you can't fix that.

What sort of marketing do you engage in? Any new techniques such as social networking, Twitter, etc.?

Atlass: We maintain a presence in the major yacht publications and insurance trade journals. We also have a comprehensive Web site and attend or exhibit at yacht shows, sponsor or attend trade seminars and sailing events, and stay involved in community events at each of our venues.

Troutman: We use Internet-based systems to make our services convenient and efficient. Today, this is a somewhat common practice, but we have been offering real time boat insurance quotes for more than 12 years and have it down to a science. Most of our quotes are returned in real time with exceptions for some specific items such as older boats or performance boats.

Wilson: We're active on LinkedIn because lots of agents are connected that way. We're also part of trade publications like Marina Dock Age magazine and members of industry groups because they're part of the boating culture. To keep up with our agents, we do a lot of informational things and educate agents through e-mail blasts and discussions at the regional state level marine association. We are also the endorsed insurer for the Michigan Boating Industry Assn.

What is the best thing about specializing in this area, and what is the most challenging aspect of the business?

Atlass: The best thing is our clients, who are interesting and often provide interesting problems to be addresses and solved. The most challenging thing is keeping current with changing maritime regulations and procedures and maintaining our relationships within the marine insurance industry, which provides a plethora of challenges for the Atlass team.

Wilson: It is a unique line of business; you have exposures that you don't have on a standard policy, for example, if a marina has a restaurant. We will write restaurants, but the difference is that it's over water, so there are unique exposures. You must be cognizant of what you have and what you're writing so we look to agents with a specialization in this area. The uniqueness of the coverage can be challenging, but at the same time it gives us and our agents an opportunity to concentrate on the marketplace and become an expert.

Participants:

Frank Atlass, chairman and CEO, Atlass Insurance, Ft. Lauderdale, Fla., established the company's Florida office in 1981. He has owned and operated power and sailing vessels to 104 ft. over the past 50 years and currently owns a 53 ft. Lyman Morse power yacht.

Randy Troutman, owner, United Marine Underwriters, La Grange, Ky., is also president of the company. A 1985 graduate of Eastern Kentucky University with majors in insurance and finance, he grew up in an insurance family that loved boating.

Don Wilson, director of marketing, Bunker Hill Insurance Agency, Houston, is responsible for agency relationships and program development. He has more than 25 years' experience in the insurance industry and has worked on both the agency and company sides.