By Frank B. Thompson… The headline from the Insurance Journal read, “A.M. Best Sees $12 Billion P/C Insurance Underwriting Loss for 2018.” This was followed by even worse news: “The U.S. property/casualty industry is expected to report that 2018 was its third consecutive year with an underwriting loss.” That loss in 2018 follows a $25.3 billion loss in 2017, and a loss of $7.3 billion in 2016. So what does that mean to propane marketers? The answer: higher premiums. The property and casualty insurance market has been stable over the past six years. Rates have stayed flat, which allowed some new insurance companies to enter the propane marketplace. The focus of the propane industry has been on CETP training, which has reduced the frequency and...

By Frank B. Thompson… My wife and I visited Washington, D. C. for Propane Days in early June. After the meetings we took the opportunity to visit the Lincoln Memorial and reread the text of his famous speech, the Gettysburg Address, in which President Abraham Lincoln declared that our Maker creates all persons equal. However, it is evident that insurance agents and insurance companies that insure propane marketers don’t share that same blessing. Many marketers treat insurance agents and the companies they represent as “even-steven,” having the same knowledge of the propane industry, the same claims-handling capabilities, the same loss-prevention philosophy, and the same coverages. It is also assumed that the insurance companies and programs are equally sound financially. That, unfortunately, is far from the...

By Frank B. Thompson… The propane industry has just spent a lot of time and effort at Propane Days in Washington, D.C. to lobby Congress to exclude the cranes mounted on the beds of propane service trucks from costly certification. Perhaps my many years in the insurance business might give us another perspective to sway OSHA. When I first started insuring propane companies 25-plus years ago, the tendency was to insure bobtails as two separate parts—the chassis and the tank. One of the questions on the application regarded the size of the tank. Over the course of time, we handled many claims questions from independent adjusters asking which part of the bobtail we intended to insure, the tank or chassis. The answer was both, as...

By Frank B. Thompson… Frequently I am asked by larger propane and fuel distributors whether they should consider joining a “captive” insurance program rather than using a standard insurance company to handle the risks they face. My response is always the same: Why? What problems are you currently having that you feel can be fixed by going with a captive? Many times the answer is to save on the insurance premiums the marketer is paying. Other times it’s the belief they can do a better job than their current insurance company is doing, due to their safety culture. So, let’s compare the options. Self-Insurance The marketer faced with growing overhead might feel that he would be better off financially if he took on some of...

By Frank B. Thompson… The propane industry has struggled for years to find affordable and available insurance for its members. Fast-forward to 2017 and there are new insurance companies and programs willing to write your company’s property and casualty program at a much lower price than you are currently paying. Unfortunately, when marketers receive a greatly reduced insurance premium quote, they focus on the past two or three winters that were too short and too warm. They look at their slowly dwindling bank account and then compare their current quote from the insurance company with which they have a long track record of stability and good service to the potential savings offered by a new insurance company. As a result of this thinking, they jump...