Glocester-based insurance group primed to make waves in the industry with lower costs for great clients

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Chestnut Hill Insurance Group founder Greg Agnone

GLOCESTER – After years of watching the insurance industry force great clients to subsidize less profitable commercial accounts, Chestnut Hill Insurance Group founder Greg Agnone says he’s found a better way of doing business.

Agnone is finalizing preparations for the launch of an innovative agency captive that he says allows agents to enjoy underwriting profits and more control over market pricing fluctuations.

“The standard market shows little regard for pricing super profitable accounts and companies still look for increases, and despite the profitability these accounts have experienced renewal increases,” Agnone explained.

The founder of Chepachet-based group said his 40 plus years in the industry, owning agencies and running captive units at highly rated carriers, has given him a unique perspective. He notes that with the exception of captives – companies like Chestnut Hill that are wholly owned and controlled by its members – there has been little in way of innovation in recent years that benefits the client. Insurance companies have focused on efficiency in the process, he notes, rather than figuring a way to lower premiums without giving up coverage.

Instead, Agnone imagines a scenario where below average risks are totally taken out of the rate making equation leaving only above average risks, allowing the best insureds and agents to capitalize on existing price levels.

“There have been several affordability and availability challenges over that time but nothing has presented this opportunity that currently exists,” he said.

His solution is a hybrid model that targets accounts with loss ratios below 20 per cent that have continued to face rising rates. Insureds will become captive owners with fellow agents under the CHIG-sponsored plan.

Agnone and others in the group will be partnering with a maximum of 10 founding member agents, and each agent will be a captive member with full voting rights, board membership, underwriting profits, investment income, and all other rights and responsibilities of captive ownership.

He says underwriting appetite will be broad enough to obtain critical mass, but limiting enough to truly be viewed as an elite “club” of overperformers. Criteria will include a loss ratio of less than 25 percent for five years, the ability to attend regular loss control meetings, control of subcontractors, clean motor vehicle reports, solid financials and class of business.

According to Agnone, the model has potential to revolutionize an industry where until now, the focus has been on delivering higher pricing and fewer claims.

“Logic would tell you that fewer claims would lead to better pricing,” he said, noting that instead the standard market has shown little regard for pricing super profitable accounts and companies receive increases. “Carriers go as far as determining the price elasticity of demand to see how much of an increase they can impose without insureds shopping and the company losing significant business.” 

“The standard companies have clearly taken their eye off the ball,” Agnone said.

He said the product has the potential to provide a captive solution for $10,000 to $150,000 annual premium to insureds through their agent. Agents will be required to take risk under an A/B structure with the exact level of retention to be negotiated with reinsurers.

“There will be shifting and sharing among members to better spread risk and satisfy regulatory requirements,” Agnone said, noting he plans to market the solution with all the “vim and vigor,” it deserves.  

For more information, contact Agnone at (401) 568-7888 or [email protected].

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