Serving real estate risk needs.

Serving real estate risk needs

When Kaye Insurance Associates, Inc. began aggressively marketing its low-cost insurance program for residential property owners 18 months ago, they didn't imagine the positive response it has received.

In May of 1990, "Amwest" had subscribers equalling 5,000 residential units. Today, the policy covers 85,000 units in more than 2,000 buildings in all five boroughs, making them the dominant source for residential insurance buyers.

"It was a specific need they had to look at," said Bruce D. Guthart, CPCU, executive vice president. "They had to look to cut cost. We took the experience we learned from other products in the 80's and adapted it to residential real estate where there was a need."

Taking advantage of a marketing tool authorized by the Federal Risk Retention Act of 1986, Kaye created an affinity group where property owners and managers can mass together for group purchasing power. The owners and managers are principally covered by the same carriers, rated "A" by Best's Key Rating Guide.

"We used that to show the insurance companies we were dedicated to the business," said Guthart. " ... We've developed an expertise on what the needs are and the insurance companies have developed [an expertise] on how to underwrite and price."

But, while low price may be foremost on peoples' minds today, it is not the only advantage to Amwest. Kaye Associates, in almost all cases, is delivering better coverage at a lower rate, according to Michael Zeldes, account executive.

"The coverage is most important when everything is said and done," said Zeldes.

The program provides a $20 million umbrella liability limit where most standard policies come with a $1 million limit. The program provides an all-risk property policy which: values buildings at replacement cost for fire instead of at actual cash value; provides for building ordinance coverages; includes sewer and drain backup. Many of these features are often excluded from standard policies, said Zeldes. Each policy also has tailor-made features.

The company attributes its rapid success to a sound product and an ambitious marketing campaign in which the principles personally visit owners and managers to explain the benefits of the program. According to President Howard Kaye, the firm has been realizing a 60 to 70 percent closing rate from their meetings with owners, managing agents and co-op boards. They pride themselves on being the only firm of its size in the country that has gotten to be this big by internal growth. Kaye said some people are surprised at their overwhelming achievement with the Amwest program.

"It's impossible to close on this kind of ratio if you don't have a good policy," he said.

The firm has dedicated 30 people to the program, including claims adjusters that specialize in residential real estate. These adjusters, Zeldes said, aggressively monitor the incoming claims to the benefit of all insured.

"We've developed the key to longevity of the program," Guthart said. "We really can control their claims."

Also because of the size of the program and their expertise with owner-manager needs, Guthart said, they are also able to deliver a proposal quickly - often within a week.

The firm has created other affinity groups for such fields as restaurants and catalog showrooms and they recently started one for retail chains.

The 17th largest insurance brokerage in the country, The Kaye Group of Companies has been in the insurance business since 1952. The firm offers a full-range of insurance brokerage services - property, casualty, life, health, accident, group benefits, qualified retirement plans - for commercial and individual clients. In addition to the New York office, Kaye has branches in California, Illinois, Connecticut, New Jersey and Rhode Island, and employs a staff of more than 300. Formerly named Walter Kaye Associates, the firm recently entered into a partnership with the ZS Fund earlier this fall.

"This program may be just beginning but there's a long life to it," said Zeldes.

PHOTO : Kaye Insurance Associates, standing: Michael Zeldes, account executive; Bruce Guthart, executive vice president; Mark Cohen, account executive, Howard Kaye, president.