Mr. Keefe: We specialize primarily in Mid-Atlantic based securities, with an emphasis on small to mid-cap stocks.
TWST: And your responsibilities include coverage of the insurance
stocks, I believe.
Mr. Keefe: Yes, specialty property and casualty.
TWST: Would you define what a specialty insurance company is?
Mr. Keefe: Specialty insurers cover small, unusual, or difficult to
price commercial and personal risks. The policies are often written on a
surplus lines basis, where rates and forms are only loosely regulated.
Specialty insurers identify and serve market niches ignored by larger
companies. That's in contrast to the standard insurance market, which
offers commodity-type insurance products such as standard personal auto
insurance, homeowners and general liability coverage for large
commercial enterprises. Standard market insurers are subject to more
intense price competition and too much regulation. Because of
competitive factors, a standard carrier could easily lose money on
something as ubiquitous as homeowners insurance. Specialty insurers can
make money by covering Main Street businesses that are too small to be
served by larger, household-name carriers, or by insuring unusual type
risks.
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