When the going gets tough, the tough goes. This may be the best slogan for Ax Insurance Group.
The logging business can be as difficult a business as one can find. Not only is it well-known as a difficult job, but it is also a company that is not always liked, or understood, by everyone.
Obtaining and maintaining insurance for US loggers has become increasingly difficult, and the rise in wildfires has made business conditions difficult.
There are a number of factors contributing to loggers seeking insurance: stricter eligibility guidelines, insurers leaving the market, a chronic driver shortage, more young drivers in the business, legal issues, nuclear rulings, and as mentioned, wildfires.
Most of these things are not new, and have been increasing over the years. More than ten years ago, when an insurance business was faced with the problem of getting their customers insurance at a good price, they decided to cut their own way.
Associated Insurance Services is an independent insurance agency founded in 2005 as part of the Associated Loggers Exchange, a workers’ compensation insurance company doing business in Idaho and Montana. It is closely associated with the Associated Logging Contractors of Idaho and the Montana Logging Association.
One of the biggest issues the company faced was that the country’s logging programs were making many of their decisions based on what was happening in other areas, such as the southeast of the country.
“It really disrupted the way their programs started in our area,” said Bryan Graham, the company’s director of forestry. “That’s what made it necessary to try to find something better.”
This “better” came, after many years of work, on March 1, with the launch of the Ax Insurance Group, a program in Idaho and Montana underwritten and sponsored by Lloyd’s of London Marketplace.
Logging insurance covers all liability, commercial vehicles, equipment and excess liability. Designed to meet the needs of the logging and hauling industry in the Northwest.
The program was more than a decade in the making. And, according to Graham, who led the development of the program, it could be the first program of its kind created by an insurance company.
Graham said: “It’s been a long time coming.
And it means long. Work on the program began in 2010.
At that time, the company did not have a large enough business book, and did not have the data to store what they were offering to the markets where they were installing the program.
“They wanted more details on the claims numbers, specifically, to verify the losses that we’ve been dealing with in our program, up to that point,” Graham said. “Instead, we decided that we needed to do our own thing to better comply with what we had, not rely on the actual insurance companies that we wrote the rules to give us that information.”
Thanks to the foundation, he eventually received help from a well-connected insurance expert named David MacPherson, who works with CJ Coleman & Company in London.
“They started taking information about our program in the London market to find someone who would be willing to join us,” Graham said. “That started in 2020. We were almost 10 years from when we started the idea of all the things we want to achieve. They had attractions in several places, but some markets didn’t want to give us the whole program. We wanted it to be the whole thing. We wanted cars, status, opportunities, tools . We wanted everything.”
Finally, in 2021, McPherson helped the company acquire the underwriting arm of Lloyd’s, called Brace Underwriting Ltd.
“We started working with them, and it took us about a year to finalize everything about what our rules would look like, what the pricing would look like, how our authority would give us that aspect,” he said. . “Finally, we got a pin to sign with Mr. Lloyd, and a contract with him, on March 1 of this year.”
This comes at a time when many states and organizations are asking loggers to help with the wildfires, which have grown in the Western US.
“We’ve seen the state, and the federal government, is starting to open up some areas for harvesting, and with the idea of fire mitigation, giving some space between the trees out in the forest, and cleaning things up, out there, better than it’s been in the past,” said Graham.
Of course, this creates a certain interest in insurance for companies.
“A lot of insurance companies are concerned, and I think rightfully so, when it comes to bushfires, or around them,” he said. “We feel that it is better to put out the fire, than to start putting it out. We want to help encourage our customers to get involved in those things, and be part of the solution on that front. “