In today's frenetic insurance industry environment, in which insurers are merging, experimenting with multiple distribution systems and eagerly developing Internet resources, the independent insurance agent is unfortunately, too often being given short shrift. Once the distribution arm of the property/casualty insurance business, the independent insurance agency system is fast becoming one small element of company distribution systems that run the gamut from direct mail to online insurance quotes and soon-to-come online insurance purchases, using digital signatures. It's rare, these days, to find an insurance company that sees the independent agency system as one that is not only responsible for its current success but also vital to its future growth.

But that's the view that the Seattle-based CBIC takes. CBIC, which is the acronym for Contractors Bonding and Insurance Company, is a privately held service organization, which traces its origins back to 1959. Back then, CBIC's parent, Data & Staff Service Co., was a modest building permit reporting service that, over the years, underwent several transformations. Founded by Chairman and CEO Don Sirkin, Data & Staff evolved into the publisher of the largest weekly specialty construction newspaper in a five state region -Washington, Oregon, Alaska, Idaho and Montana - then into a wholesale brokerage firm writing bonds and general liability for the construction industry. CBIC was formally established in 1979 by Don Sirkin and today provides a wide range of surety bonds and property and casualty insurance products.

According to Steve Gaines, president and COO, CBIC has more than 150 employees, operates 13 regional branch offices, and is U.S. Treasury listed and Rated A (Excellent) by A.M. Best Co. The company now serves more than 30,000 contractors and 4,000 insurance, agents and brokers nationwide. The company is the number one writer of contractors license bonds in the Northwest and is licensed in all 50 states and Washington, D.C. (46 states for property and casualty coverages).

When you speak to Gaines and any of his division leaders, they all emphasize the importance of the agency system to their operations. Agents are familiar with the property and casualty insurance business, but areas such as contract surety and commercial surety are often perceived by the average agent as too complex to get a handle on. Gaines and his staff are prepared to deal with this. They say they have one major goal in mind - to make it as easy as possible for the agent to do business with them. In this respect, they have streamlined their operations, offer easy-to-use products and services and sophisticated information technology programs to assist the agent.

John Pieprzny, senior vice president of CBIC's Contract Surety Department, says that service is all important in dealing with agents. "We've been writing this business for small and medium-sized accounts since the mid-1980s. We have a six-tier rating program which is very competitive. We will write through experienced agents and also through agents with little or no experience in the area. We're willing to provide the guidance needed," he says.

Contract performance and payment surety bonds guarantee performance of all terms and conditions of a specific contract, and/or payment of all labor and materials provided to complete the contract, up to the amount of the bond. "We're a complete facility for contract bid, performance and payment bonds up to $10 million single and $15 million aggregate, with higher limits available on an individual basis," says Pieprzny. "We are a standard market that offers professional service, quick response and a preferred rate program. In recent years, we have hired experts in this area from larger companies and our underwriters are specialists in risk analysis. We take a pragmatic approach in determining a contractor's specific surety credit needs." In addition to larger bonds for established contractors, CBIC offers streamlined programs aimed at emerging contractors who have never had or infrequently need a performance bond. These programs rely more on experience and liquidity rather than on expensive CPA prepared financial statements often required by other sureties.

CBIC writes commercial surety bonds including license and permit, miscellaneous, court, ERISA and public official bonds. Larry Byers is senior vice president of CBIC's Commercial Surety Department and says that, despite the complexity of the arena, the commercial surety division follows the overall corporate philosophy: "Make it easy for the agent and broker to do business with us." Several years ago, CBIC pioneered the delivery of bonds using the fax machine. While the company is developing automated delivery systems which rely on the latest technology, the company still receives a majority of submissions via fax. "Using our long standing Bond-By-Fax system, appointed agents throughout the country can have a bond delivered to them within minutes of approval, not days or weeks," continues Byers. "Some sureties issue power of attorney but typically do not grant significant underwriting authority and give no guarantees on approval time. With Bond-By-Fax, there is no need for the agent to worry about size of the power-of-attorney and most bonds are issued within minutes of approval at standard or deviated rates for qualified accounts. Of course, we can also accommodate agents who prefer issuing bonds out of their office, whether using their own powers-of-attorney and underwriting authority or a more automated workflow management system customized to meet their own specific needs. We have the flexibility, to service virtually any agent whether their are a surety specialist or only request bonds occasionally", Byers says.

The most recent addition to CBIC's line of commercial surety products is court bonds, which include both judicial and fiduciary bonds. Judicial bonds either indemnify a party in a civil action for costs and damages arising from a wrongfully granted temporary remedy or they may guarantee payment of a specific sum of money. Judicial bonds include attachment, replevin, temporary restraining order, preliminary injunction, release of attachment and appeal bonds. Probate bonds, which guarantee that a principal will properly settle the estate of a decedent or manage the financial affairs of an incapacitated person, are the most common types of fiduciary bonds.

On the insurance side, CBIC designed its "Contrac Pac Plus" artisan contractor program to address "the unique needs of Washington and Oregon construction professionals," says Jay Malone, senior vice president in charge of CBIC's Property & Casualty Division, "This program packages a contractors license bond, general liability, property, and inland marine insurance," he says. The program targets businesses that generate less than $1.5 million in annual sales and employ 10 or fewer people. CBIC has expanded the program geographically to include California, Nevada, Arizona, New Mexico, Montana, Idaho, and Wyoming. With a streamlined application process, preferred bond rates, insurance rates among the lowest available, optional coverages and automated rating, Contrac Pac Plus has become the cornerstone for CBIC's emerging property and casualty product line.

CBIC has continued its diversification efforts into other commercial property and casualty lines. "Historically, Data & Staff has been an underwriter of property/casualty coverages as a managing agent for an unaffiliated carrier," says Malone. "Beginning in 1995, we began to write these coverages on CBIC's paper, utilizing our reinsurer for support and excess protection. We are expanding these new territories lines in existing and new territories as well as through strategic alliances with other carriers. We are also targeting affinity groups associated with small business, such as architects and engineers by offering commercial programs (excluding professional coverages) that address their particular insurance requirements, which are often neglected by the large standard carriers."

CBIC's Property & Casualty Division is writing, a generalist book of business, says Malone. "We write BOP, package and umbrella coverages for a variety of commercial classes. Our mission is to create viable products that offer agents unique and profitable selling opportunities. We concentrate on providing property, liability, inland marine, commercial auto and crime coverages for businesses which generate less than $10,000 in annual premium."

The P&C product which may be the most exciting to CBIC executives is a new Internet-based California Businessowners Policy for merchants, offices and home offices. CBIC's California IBOP-Internet Businessowners Policy allows an agent to obtain a quote, underwrite and bind a qualified account in real time in under 10 minutes, 24 hours a day, 7 days a week. Launched only recently, the IBOP already has over 300 registered users and, according to CBIC executives, has received glowing testimonials from a number of agents on its simplicity, speed and ease of use.

Finally, Clark Graves, senior vice president and CIO and Ron Rice, vice president of marketing and corporate communications, are responsible for using the company's information technology systems in their marketing efforts. "Again, our goal is to make doing business with us easy, and we have created our ASIST Family of Electronic Solutions to that end," says Graves. "Some of our systems are Internet-based, but for those who are not comfortable with using the Internet, we can provide diskettes so that agents can work right from their PC or laptop." And Rice adds, "We deal with thousands of agents and brokers nationwide and each embraces technology at different speeds. Our ASIST menu includes products suited to everyone's comfort level. Each product is developed with one philosophy, in mind-make it easy to do business with CBIC." ASIST is the acronym for Agent Surety and Insurance System Technologies. CBlC's ASIST Family of Electronic Solutions includes: IBOP (Internet Businessowners Policy), RAVE (Remote Agent Verification & Entry), ISIS (Integrated Surety & Insurance System), IBLINQ (Internet Billing & Inquiry System), EZ-Rater (PC-based BOP rating product), EXCEL-eraters (PC based artisan contractor rating product), EDL (Electronic Document Library) and Power Tool Kit (Customized commercial surety agent authority program). These systems are intended to help the agent in areas such as workflow management, rating, determining credit worthiness, document processing and account billing information.

So it appears that, despite the changing insurance environment, the word "agent" is still at the top of the list at CBIC. Gaines says that the company is planning further growth both in terms of geography and in terms of product mix. Given the corporate philosophy, that could mean only good news for independent agents.

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