Fighting back against hacks by offering cyber liablility.
October 2015
By David Zaslawsky
Photography by Robert Fouts
With the headlines swirling around companies and organizations being hacked and the millions of people impacted, Palomar Insurance has been partnering with a London-based company to offer insurance against such cyber attacks.
Palomar Insurance President and CEO Tony Craft said that his firm was the first in the area to offer cyber liability. “Cyber is the biggest thing in the insurance industry today,” Craft said. “It’s an issue and people are not prepared for it. The big thing is that you don’t know what to do when you get hacked.”
It’s unlikely that a firm’s certified public accountant or attorney or even an information technology employee knows what to do after their company has been hacked, Craft said.
“We have a product that we sell that does all that.”
Palomar offers a cyber insurance policy that enables a company to pick up the phone and call an 800 number when they think their firm has been hacked. “They come in and take care of the whole thing,” Craft said.
There is also a coverage that provides liability for hacking. Costs related to hacking can be colossal considering that some states fine a firm $100 per person whose financial information was hacked, coupled with the company providing two years of free credit reviews for each of the hacked accounts.
Those two types of cyber insurance are a “big growth area” for Palomar, according to Craft. This is such a key area that Palomar conducts seminars with experts in the field to inform potential clients
Another key growth area is the rebranded Aesthetisure program for surgeons who perform cosmetic surgery. The insurance covers the surgeon’s patients for complications because those are not typically covered by the patient’s health insurer. The firm heavily promotes the program at cosmetic surgery shows and exhibitions.
What Craft is banking on to boost growth is adding what he calls producers, who are salespeople. When asked to describe the firm, Craft said, “We consider ourselves a sales operation that provides professional, quality service.” That’s how important the current 22 to 23 salespeople are.
Because of recent mergers and acquisitions there will be scores of highly talented salespeople in two years looking for new jobs. Craft hopes to add a dozen or so producers over the next five years to drive revenue growth by 60 percent to $20 million a year. Actually, that’s the minimum goal, Craft said.
There is no interest in acquiring another insurer or agency, Craft said. Palomar Insurance, an insurance brokerage owned by a South Alabama family, will likely add some locations in Georgia and probably Mobile. The firm has two Montgomery locations, including the corporate headquarters at Executive Park and a Palomar Plus office on Vaughn Road in the Peppertree Shopping Center. “It’s a convenience for clients,” Craft said. The site handles personal lines of insurance – homeowners and automobile as well as some commercial accounts.
The firm’s most successful insurance program has been with the United Egg Producers. About 75 percent of the organization’s members are insured by Palomar. The program generates about 15 percent of the firm’s $12.5 million annual revenue. It is a “very profitable” segment, Craft said.
It was the egg program along with the plastic surgeons’ program and a large property account that not only kept Palomar alive during the Great Recession, but enabled the firm to actually grow. He said the firm was not dependent on just one area of coverage.
“Our forte would be (that) we write a lot of large property accounts,” Craft said. “We write a lot of construction accounts and we insure a lot of transportation (companies). Basically, a little bit of everything. We have accounts all over the country. We handle almost any kind of insurance product.”
What sets Palomar Insurance apart from other independent insurance firms is the employees, according to Craft. “Our biggest asset is our people. I can’t emphasize enough how professional our support people are. They are so capable, it’s scary.
“We have a great management staff and we have some of the best producers around. We have a good mindset – attitudes are good here. We operate as one big family.”
