Underwriting the Outfitters: How Philadelphia Insurance Tackles the Great Outdoor Sector
Whether it’s flicking a dry fly toward a feeding rainbow trout or hiking up aspen-girdled mountains, there are few experiences that match the adrenaline rush inspired by the great outdoors.
That’s why millions of people take to the wilds of the United States annually. So great a trek is this that federal economic estimates of consumer spending in this area are at $800 to $900 billion.
The outdoors can be done on a tight budget, or it can be done at a price — around $8000 per person for a week-long stay at an Orvis-approved luxury fishing lodge in Alaska, for example. And that’s not including airfare.
No one can guarantee that you have the skill or the luck to land a wild trout or a trophy buck, no matter how much you plunk down.
But when it comes to the risks of hunting from tree stands, or canoeing a boulder-strewn river, Melissa Rucker and her colleagues at Philadelphia Insurance share that appetite for adventure and for underwriting the risks that they know like the back of their sun-tanned hands.
She shares office space in Englewood, Colorado with about 30 like-minded individuals who form the backbone of the Great Outdoors Insurance Program for Philadelphia Insurance.
“There’s a massive amount of different outdoor activities around that people can participate in on a lot of different levels. It’s a way of life really,” Rucker said of her home state and the esprit de corps of her underwriting team.
Rucker said that knowledge of the outdoor life is one of the keys to underwriting a U.S.-based specialty business that is growing at an 8% to 10% clip annually.
“Our whole team is very active, so we have hunters, we have fishers, we have dirt bike riders and all different types of outdoor activities which people participate in. So, we all bring those different experiences that help us truly understand what coverages they need and what the real exposures are that they’re facing,” Rucker said.
In protecting a guide service or a lodge in an area where falling off of a horse or a raft thundering through rapids can cause serious injury, and death in some cases, Rucker said her team pays a lot of attention to the waivers guide services sign with their clients.
“The more extreme the activity, the more questions you will need to ask about the participant’s ability. A backpacking trip should have more questions on ability than a beginner’s walking trail on a groomed trail through the forest.” — Melissa Rucker, underwriting manager, Philadelphia Insurance
“For anybody that’s looking to improve their risk management, I think their first step really needs to be the waiver,” Rucker said.
“Whether that’s consulting with attorneys to review the waiver that they’re currently using, to make sure that it’s providing them the protection that they need, or going to an attorney and getting a waiver,” she added.
“That liability waiver is really their first line of defense if something is to go wrong. If it’s poorly-worded or has other weaknesses then they don’t have that defense,” she said.
She and her colleagues can tell at a glance if a waiver agreement is too broad or vague. If there are too many holes in a guide services’ waiver, they’ll direct the business owner to get some help with the wording; or they won’t underwrite the risk.
Can You Really Do This?
Apart from waivers, Rucker said her team focuses on services that take appropriate risk management precautions. Those include things like mandatory life vests for whitewater rafters, or helmets for those using an ATV to get to a hunting location.
The higher the risk the activity presents, the greater the risk management program needs to be.
Rucker said her team wants to be able to document the experience of the guides and what the guide to guest ratio is.
There should be clear communication between the guide or lodging service and prospective guests about the exertion level or natural dangers, say brown bears, inherent in an activity.
Outdoor activities aren’t the same as indoor or city activities and shouldn’t be treated as such. One doesn’t want to minimize how hard a guided hike might be or pretend that there aren’t 600-pound predators in the area.
Detailed questions about the guest’s experience or fitness level should be very much a part of the process of offering and contracting an outdoor service.
“The more extreme the activity, the more questions you will need to ask about the participant’s ability. A backpacking trip should have more questions on ability than a beginner’s walking trail on a groomed trail through the forest,” Rucker said.
That includes being upfront in asking about pre-existing medical conditions. They don’t need to get a full medical picture, but the guide needs to be aware of the participant’s physical limitations before they are miles from help.
The key is really to try to control what you can (through waivers, safety gear, guide training, etc.) but don’t hide or minimize the potential dangers that you cannot (water levels, temperature changes, altitude changes, wild animals, etc.)
For Rucker though, it’s the joy she gets from being in the outdoors and her intimate knowledge of these activities that make this position such a natural fit.
“When I see some coverage applications, I have an understanding of the exposures they’re talking about because I’ve done it,” she said.
“It’s a lot easier for me to look at something and say, ‘Yeah, that’s totally typical for hiking or for a campground, ‘ ” she said.
And that’s true for her entire Colorado-based team.
“It helps with qualifying a risk, in terms of things we like to do, what we’ll write, or what we won’t write. A lot of those guidelines have come from our personal experiences,” Rucker said. &