Insurance companies comment on state of the market

The energy industry finds itself in a state of transition. The insurance market is no different, with rates changing and capacity shifting in response to loss patterns.

Preparation and an eye toward the future remain paramount.

According to a 2024 market update prepared by The Baldwin Group, an independent insurance distribution firm, maintaining proactive communication with insurance company partners and providing evidence of claims resiliency will render improved results.

Natural disaster and litigation exposures are the greatest challenges across the downstream, midstream and upstream energy sectors, The Baldwin Group adds. These trends have placed significant pressure on the availability and pricing of property insurance and casualty lines, respectively.

“A big benchmark right now is post COVID versus pre-COVID numbers,” says James Frommert, vice president at The Baldwin Group. “During COVID, pricing for everything shot up, and now it’s starting to normalize. We’ve been seeing insurance companies wanting to get back to those pre-COVID numbers, but inflation plays a factor in a lot of things.”

For a clearer picture of the insurance market in 2024, LP Gas reached out to companies working in the space to get their perspectives and advice on the best path forward for propane marketers. Here’s what they shared with us.

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Aegis General Insurance Agency

Tom Mullaney, vice president of risk engineering

The company: Aegis General Energy provides auto, liability, property and specialty coverages for propane companies, ranging from startups to small family operations to large multi-state conglomerates operating in the retail, wholesale and transportation segments of the industry. The Aegis staff has been together for decades, ensuring that it has qualified and knowledgeable underwriters serving its industry partners.

2024 market update/message to marketers: Choosing the right insurance is crucial for propane companies to protect their businesses from unforeseen risks. For three decades, we have specialized in tailored insurance and risk management services for the propane industry, adapting to technological advancements and regulatory changes. Our experienced team provides comprehensive risk assessments to ensure adequate coverage for auto, liability, property and employee safety. Proper insurance safeguards your assets, ensures regulatory compliance and supports business continuity. By prioritizing industry-specific coverage, propane companies can effectively mitigate risks and position themselves for long-term success in an ever-evolving landscape.

Crum & Forster

Todd Buechler, AVP risk engineering

The company: Crum & Forster has been a steadfast insurer for propane companies since 1923, demonstrating an unwavering commitment to the industry. As an Affinity member of the National Propane Gas Association, Crum & Forster leverages its extensive experience and expertise to provide comprehensive insurance solutions. Our team comprises highly skilled professionals in underwriting, claims, risk engineering and marketing services, ensuring top-tier support for our clients. Our risk consultants are actively involved in both national and state-level propane industry organizations, where they not only participate but also present on critical topics. They conduct thorough risk analyses with our insured clients and offer tailored safety services to address their specific needs. This holistic approach underscores our dedication to enhancing safety and mitigating risks within the propane industry.

2024 market update/message to propane marketers: The propane industry faces challenges similar to those impacting the broader insurance sector, including numerous costly disasters nationwide, persistent adverse accidents involving auto and fleet exposures, and a challenging legal environment. In response, Crum & Forster advises propane marketers to implement rigorous vetting processes for new employees, enhance their training programs, meticulously document all services, and leverage the services and recommendations provided by their insurance partners to mitigate risks. By prioritizing safety and reducing claims, companies can access more favorable insurance options.

Jamerson-McLean Corp.

On Facebook: Jamerson McLean Insurance

The company: Utilizing a longstanding alliance with the propane industry over the last 30-plus years, Jamerson-McLean Insurance has cultivated close relationships with a diverse range of insurance carriers. The industry can count on us for expert assistance in tailoring insurance solutions across commercial property, inland marine, commercial auto, management liability, pollution/tank, excess/umbrella, cybersecurity, workers’ compensation and professional liability policies.

2024 market update/message to propane marketers: The propane industry is facing higher insurance premiums and tougher underwriting due to increased risk awareness and more frequent claims. Insurance carriers are placing a greater emphasis on companies with strong safety protocols and regular maintenance. It’s crucial to have specialized coverage for environmental, product and property liabilities, and with cybersecurity threats on the rise, adding cyber liability coverage is wise. Staying compliant with evolving regulations is also important, as insurers are closely monitoring adherence to safety standards. Partnering with an agent who specializes in the propane industry can ensure propane marketers have the right coverage. Efficient claims handling and support from an experienced agent is essential for minimizing downtime and financial impact.

PT Risk Management

Lauren Abbl, producer

The company: PT Risk Management is a niche commercial insurance agency that has been focused exclusively on the propane and petroleum industries for more than 30 years. We are licensed in all 50 states and members of more than a dozen state and regional propane gas associations, giving our team up-to-date knowledge of what is happening in the propane industry. PT Risk operates with a boots-on-the-ground philosophy and personally visits each location that we insure to make sure there is nothing missed on the policy.

2024 market update/message to marketers: Compliance is the name of the game in insurance these days. Not complying with insurance carrier loss-control requirements and DOT regulations could cost you your insurance. With only a small number of carriers that have formal propane insurance programs, you could find yourself in the surplus market where premiums are much higher and the coverages aren’t as comprehensive. Don’t wait for a problem to occur before you step up your risk management efforts. Proactively install cameras in your vehicles and purchase a software system that will keep digital records of your deliveries, service orders, leak checks, etc. These two tools can provide crucial evidence in the event of a claim. Lastly, you shouldn’t have to educate your agent on the unique insurance needs of the propane industry. Work with an agent that is well versed in propane.

The Baldwin Group

James Frommert, vice president

The company: The Florida-based company, which represents more than 2 million clients across the U.S. and internationally, delivers solutions surrounding risk management, insurance, employee benefits and wealth management. Creating the right solutions is contingent upon understanding your business, its risks, your short- and long-term business goals, and industry benchmarking data. We roll up our sleeves and conduct our comprehensive RiskMap process – getting the answers we need to design an insurance program that addresses gaps and redundancies and helps protect your business and its longevity.

2024 market update/message to marketers: The propane market remains competitive, with renewals remaining flat or only seeing slight increases. Lloyds of London syndicates have 75 percent of the syndicates approved for growth in 2024; therefore, the market should remain competitive in 2024. Underwriting appetite will vary on risk category and quality, with underwriters demonstrating continued interest in accurate asset valuations and evidence of loss-control measures. With the propane industry in a continuous state of transformation, partnering with a trusted insurance adviser can help you protect your investments and assets, allowing you to focus on longevity and continued growth.

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