Insurer Targeting the Well-Heeled Sees Opportunity in Texas
April 27, 2010
San Antonio Business Journal - 05/28/10
By Tamarind Phinisee
White Plains, New York-based insurer PURE (Privilege Underwriters Reciprocal Exchange) Risk Management LLC is looking to expand its business across Texas, and in San Antonio.
Company officials are hoping the property and casualty insurer's style of specialized services will appeal to some of the state's more affluent residents.
PURE will offer both auto and home-owners insurance for high net-worth individuals. The homeowners insurance, say company officials, will be aimed at individuals with high-value homes and/or homes along the Texas coastal areas.
PURE also insures collections of jewelry, art and other valuables, water craft and provides personal excess liability coverage.
The annual premiums for the company's typical insurance policyholder, say PURE officials, could run as high as $10,000 a year.
Ross Buchmueller, president and CEO of PURE, says there are few specialist carriers serving the affluent market in Texas, and he believes the company can offer a unique approach to the business.
"We are focusing on the largest and most affluent markets in the state, including San Antonio," Buchmueller says, adding that the company's foray into Texas is part of a national expansion plan.
PURE opened a one-employee office in Dallas in February of this year and is now focusing its efforts on getting out the word out about what it has to offer.
Buchmueller says the company does not plan to hire a lot of agents in the immediate future or to have a heavy brick-and-mortar presence.
The company plans to work with 20 or so medium to large independent agencies around the state. In San Antonio, PURE is already working with
Wortham Insurance and Risk Management.
PURE reported gross written premiums of nearly $53 million last year, up from $32.5 million in 2008. The company posted a net loss of nearly $2.3 million last year, down from a net loss of $3.8 million the prior year, but also recorded a net surplus as of the end of 2009 of nearly $50 million, according to its annual report to members.
To date, the company is licensed in 13 states - including Texas.
"You can't ignore a market as large as Texas. It's been a pretty interesting insurance market over the last decade," Buchmueller says, citing 2003 insurance reforms, the effects of the mold crisis and Hurricane Ike on homeowners insurance.
"We are careful to insure homes that were built to the highest standards, where policyholders have first taken all reasonable steps to reduce the likely damage from a storm," he adds. "With appropriate caution and selectivity, we will certainly provide coastal capacity."
Jerry Johns, president of the Southwestern Insurance Information
Service, says the insurance industry welcomes PURE to the Texas market.
Southwestern is an insurance industry trade association representing
insurers in Texas and Oklahoma.
"It demonstrates that the reforms made in 2003 are working when we get companies with a good reputation and size like PURE to express their confidence to enter this market," Johns says.
Johns says having the insurer write policies in the homeowners market along the coastal areas will help bring some relief to the Texas Windstorm Insurance Association fund and provide more choices for consumers.
TWIA is the state's insurer for windstorm damage, providing coverage in the state's 14 coastal counties and parts of Harris County.
"It's my understanding that PURE writes along the coastal areas from the northeast to the southeast. If they do the same in Texas, that is going to ease some of the pressure on TWIA," says Johns, who is also theofficial spokesman for TWIA. "It will give people options in the private market to purchase coverage and help reduce the policy count and exposure for TWIA."
TWIA is currently funded through premiums collected from both residential and commercial policyholders as well as from the property and casualty insurers that are part of TWIA. All insurers who write property and casualty insurance in Texas are required to participate in TWIA.
Ben Gonzalez, spokesman for the Texas Department of Insurance, says he can't comment directly on how a specific insurer might impact the market.
However, Gonzalez says, TDI welcomes diversity in the marketplace.
"Having a variety of options for consumers to choose from gives them a better opportunity to find coverage that matches their particular needs and budgets," Gonzalez says.
PURE was started in 2006 by Buchmueller and some of his colleagues.
Prior to helping start the insurer, Buchmueller served as president of AIG's high net-worth private client group, which he says was started in the 1990s.