A schismatic shift within the upper management offices of competing insurance providers rocked the fair insurance world in February. An upstart David in the outdoor amusement industry insurance market has "lifted out," in the parlance of corporate America, the core team of the industry's Goliath.
The executive staff of Allied Specialty Insurance has left for Britton Gallagher, a relative newcomer to this lucrative segment of the insurance industry. The Allied Specialty Insurance executives and agents, all well known in fair and amusement industry circles - Rick D'Aprile, Gene Berger, Rodney Gerbers, David Gallace, Tammy Catterton, April Merino and Jennifer Wolfe - are now employees at Britton Gallagher. D'Aprile is now the former president of Allied Specialty and the other new staff hires by Britton Gallagher all worked under him at Allied Specialty. Also joining the Britton Gallagher team is Randy Ebens, formerly with Tropic Capital, a business closely related to Allied Specialty.
Allied Specialty Insurance, headquartered in Treasure Island, Fla., with a branch office in San Antonio, Texas, is considered the largest insurance provider to the fair, amusement and carnival industry. According to Dennis Laughlin, President and CEO of Britton Gallagher, which is based in Cleveland, the company has been in the fair business "a good while, about three or four years," mainly through its division, Amusement Insurance Resources (AIR), headed by Drew Tewksbury.
On February 6, at a meeting of the board of directors at the Outdoor Amusement Business Association (OABA), Mary Chris Smith, Chairman and President of Allied Specialty Insurance, issued this statement: "Late last Friday, several producers at Allied Specialty Insurance left abruptly without any notice. I have no comments to make about these people." Smith was named president of Allied Specialty Insurance on February 1st, immediately following D'Aprile's resignation.
Within a week of the Smith Statement, this status update appeared on D'Aprile's Facebook page: "...by now most of you know that I resigned from my position at Allied Specialty Insurance on 1/31/14. After a total of 24 years of dedicated service and good fortune to meet some great clients/friends, I felt it was in my best interest to join Britton Gallagher a Senior Vice President... I am not available to discuss anything related to insurance with my former clients for a period of time but will see you down the road. I wish you all of you great success."
D'Aprile (and Mary Chris Smith) declined to be interviewed for this article. D'Aprile and the other ex-Allied Specialty Insurance new hires by Britton Gallagher are bound by non-compete agreements, and not allowed to sell insurance to the Fair industry for the time being. Typically non-compete clauses run for at least a year and many times several years, although how enforceable non-compete clauses are in the complex and competitive world of liability insurance is debatable.
Laughlin would not comment or speculate on the precise length of D'Aprile's - or the rest of his team's - non-compete agreements. In the short term, Laughlin said his new team will not have any impact on the fair insurance industry. "Because of contractual obligations, this is not an issue. They won't have any business in the fair industry. They will be working on and starting new entities in other businesses through the period of their contractual obligations."
In the long term, the D'Aprile team may eventually work within AIR, Britton Gallagher's fair and amusement insurance division. Through AIR, the company gained a foothold in the fair insurance industry with insurance products for inflatables, pyrotechnics and most recently amusement rides.
According to a Carnivalwarehouse article that "Drew Tewksbury was so committed to the project that he took classes on ride safety and received his NAARSO Level I certification. He also became certified to inspect rides in several states and teaches safety classes throughout the country."
This personnel acquisition now enables Britton Gallagher to grow beyond a mere foothold and become a major player in fair and amusement insurance. "Through Drew and his presence at industry events, we first got to know Rick and his group," said Laughlin. "We have a new underwriter, Specialty Insurance Group of Indianapolis and believe we have a superior insurance product to offer to the industry."
Although D'Aprile has been named Senior Vice President, titles for the rest of his team are still being decided and will not be announced until March. In addition, the new team will not be moving from Florida, where they all have homes, to Ohio. Britton Gallagher will establish a branch office in the Sunshine State for the D'Aprile team.
While the loss of a line-up of such experienced personnel is a blow to Allied Specialty Insurance, the company claims that any damage is temporary. The company insists that Allied Specialty Insurance - and its underwriter, T.H.E. Insurance Company, is financially sound and poised not only to weather the current storm but to be come out stronger in the end. "T.H.E. Insurance, has just completed an incredibly strong year," said Smith in her statement. "I fully expect that once you see T.H.E.'s 2013 financial and operational performance, you will understand why I have such a very positive view of our company."
She added that Allied Specialty Insurance is "licensed and fully prepared to continue to support our clients with the same high level of service you expect from us. We look forward to helping our clients succeed. We know, love and are committed to this Industry. This is what makes us unique, and it will never change."
The company has yet to name replacements for D'Aprile and the other members of his team, and declined to comment on the impact the liftout hashad on the company or the future make-up of its executive staff. Nonetheless, Robert C. Lamb, Jr. Chairman and CEO of Allied International Holdings, Inc., the parent company of Allied Specialty Insurance, is confident of the future stability of the largest player in the Fair Insurance market.
"We are fully licensed and able to support our clients' needs in any of the states where they have operations," Lamb said in an email to Carnival Warehouse. " Many of our clients were able to renew for their 2014 season at the Trade Show in Gibsonton during the first week of February and others are continuing to do so. We are focused on communicating directly with and supporting our clients as we have been successfully doing for 30 years. Clients know who we are, how we care about them and this industry and why we will continue to be the best answer to meet their long-term insurance needs."