The long entrenched insurance market for camps will see a slight shakeup this year, but don’t expect much deviation from the status quo. A couple carriers have exited the segment and newer players are strategizing to pick up business in competition with long-standing players. Zurich exited the camps segment in April when its program administrator, The Redwoods Group, was acquired by Crum & Forster, a subsidiary of Fairfax Financial. Although a relatively new player in the camps segment, The Redwoods Group  has been insuring YMCA camps for decades. It looks to expand its business in coastal regions this year.  GuideOne has written only a handful of camps annually for years but is considering changes to its program that will gear it up to go after greater market share. Look for GuideOne to start rolling out program updates in 2016.

Crittenden expects pricing to remain flat, with moderate increases of 2 percent to 5 percent, for the foreseeable future, continuing a trend that has not budged significantly in years. Philadelphia Insurance may increase rates slightly in response to an increase in weather-related property claims. It will mostly write weather-exposed accounts with higher deductibles and focus on preventive loss control measures, with a greater focus on property maintenance. Organic growth will continue to inflate carriers’ books of camp business, with new types of camps popping up each year and enrollment on the upswing. Nearly half of American Camp Association-affiliated camps reported that last year’s enrollment was the highest in the last five years. Youth summer camps and day programs with a focus on adventure, gardening and STEM subjects are leading this growth as parents look to camps to provide outdoor knowledge and fill gaps in public school curriculums.

Major markets in this segment, including Markel, Philadelphia, Nationwide and The Redwoods Group, have seen an increase in demand for both educational and specialty camps, such as special needs camps and computer, weight loss and sports camps.

Many specialty camps get a boost from association with a celebrity benefactor, since rising property prices have made it difficult to start a camp. Remote travel camps, international camps, survival camps and camps with higher risk activities, such as zip lines, rock walls and large enclosed inflatable balls, are also gaining popularity. Adventure programs made up the highest percentage of new activities added to camps in 2014.

Carriers will take a close look at the activities hosted by camps and the safety measures in place before underwriting accounts. The Redwoods Group has seen an increase in claims having to do with falls from climbing walls and zip lines, often attributable to staff training and supervision. North Carolina recently passed a bill directing a study of regulation of aerial amusement devices, including zip lines, ropes courses and pendulum swings, following the recent deaths of a 12 year old and 16 year old who fell from such devices at separate camps in the state. Expect the top underwriters of this business to scrutinize the levels of supervision at youth camps since most claims occur when children are improperly supervised. This also applies to bullying, which has become one of parents’ top concerns.

Segment-leader Markel will be among those carriers maintaining a high level of underwriting scrutiny when it comes to safety measures at the thousands of camps it underwrites. The carrier will favor camps that meet the ACA accreditation guidelines, although it is not required that a Markel-insured camp be accredited. Markel will review a camp’s website, management, lifeguard practices and children supervision as well as several other criteria outlined in its 13-page application before taking on a risk. New agents should have a premium potential of at least $50,000 when bringing a camp account to Markel, but an in-house brokerage is available if an agent seeks to place a single account with the carrier.

Markel is working to gain approval nationwide for a new property enhancement and several other coverage additions. Over the past few months, the carrier has been filing a property enhancement for camp and conference centers, additional coverage for tree removal, extensions of legal liability and direct primary coverages for loss or damage to customers’ autos, a coverage extension for adventure or challenge courses, a traumatic loss counseling expense reimbursement and a pest control general liability enhancement. Markel also began offering a small amount of data breach coverage for camps as part of the general liability and products-completed operations coverage forms about a year ago.

With a limit of up to $50,000, the data breach insurance provides third-party liability coverage for damages and fines resulting from an accidental privacy and/or security breach of data storage devices, a grants expense reimbursement for specified expenses that the insured incurs directly as the result of a covered data breach, and breach mitigation expense reimbursement for costs the insured pays to provide affected third parties with credit monitoring expenses, compliance with security breach notice laws and public relations costs.

Markel writes a number of specialty camps, including math and robotic camps, and special needs camps, such as those offered by the Children’s Oncology Camping Association for children with cancer. The carrier will provide a small amount of medical malpractice coverage for the medical staff at these types of camps. It can also cover boards of directors for nonprofit camps and offers property extensions for docks, boats and appurtenant structures, such as sheds and boathouses.

The Redwoods Group will hunt for more market share this year. Now a carrier subsidiary, The Redwoods Group previously served as the camps managing general underwriter for Zurich. Leveraging its new autonomy under Crum & Forster, expect The Redwoods Group to strive for more competitive pricing and to extend its reach into coastal areas where Zurich’s limited appetite made it difficult to do business. The Redwoods Group’s coverages will remain the same despite plans to reduce pricing. The carrier offers property coverage up to the cost of replacement, general liability and excess coverages, including abuse and molestation and professional liability. The professional liability forms can provide coverage for nurses and voluntary physicians, a newer coverage option that strives to fill gaps left by physicians’ medical malpractice coverage. It is available for about 5 percent of the camp’s general liability premium.

The Redwoods Group currently writes about 75 camps and maintains a heavy focus on risk mitigation with a team of risk consultants that visit, assess and work with every camp insured. It also offers online training for camps and camp employees. The online training is free to all camps insured with The Redwoods Group and is available to camps insured elsewhere for a payment. The carrier has several customers that have opted for a lower cost insurance policy but remain registered for the online training programs. The Redwoods Group primarily insures nonprofit camps but has been broadening its appetite to include mission-based for-profit camps and day camps. YMCAs and Jewish community centers make up a large portion of the carrier’s customers. It will write any mission-focused camps, including those with exposures to saddle animals, zip lines, climbing towers and lakes. The carrier targets medium to large camps with revenues of more than $500,000. The Redwoods Group will work with any agent of a camp’s choosing and has no minimum premium requirement.

Church Mutual will corner more of the camps market this year, expecting to grow its book by double-digit percentages despite softness in this market. The carrier established a standalone camp underwriting unit for its existing $25 million book of camps business and opened up its camps program to its broker distribution channel earlier this year. Church Mutual’s broker business has grown substantially, by double-digit percentages year over year, although direct sales still make up about 75 percent of its business. It also opened its program up to cover secular camps at the start of the year after previously only taking on religious-affiliated camps accounts either attached to a church or operating as standalone camps. The carrier will write large, year-round, overnight, day and summer camps and offers property, general liability and some auto and workers’ compensation coverages. Although the carrier will now write secular camps, it is still not interested in writing large organizations, such as the YMCA, unless it is a standalone, separately incorporated camp. Church Mutual individually underwrites each account and will take on policies with premiums from under $1,000 to over $75,000.   The carrier’s scrutiny of each camp includes loss control engineers working with camps, looking at in-place safety measures, such as wrist bands to identify children’s’ swimming abilities, and proper supervision for activities like horseback riding. Church Mutual currently writes more than a thousand individual camp accounts.                              

Underwriter Francis L. Dean & Associates, backed mostly by U.S. Fire Insurance Co., primarily covers sports-related or educational day and short-term camps and offers participant accident insurance, participant general liability coverage and short-term equipment coverage. It has been adding on to the liability portion of its camps program to meet insurance requirements of varying venues during the past few years. FL Dean can write some outdoor camps but does not offer coverage for many high-risk outdoor activities. The underwriter also has been adding coverages for short-term and day camps often hosted at rented or leased locations since the various schools, hotels and community centers that allow camps to be hosted on their property all have different insurance requirements. FL Dean has added coverages such as hired/non-owned auto for camps that pick up campers or drive them around the campus; sexual abuse and molestation sublimits, which are more commonly being required by venues; and higher aggregate limits and sickness coverage. FL Dean will include any coverage required in a venue agreement for an additional premium charge.

FL Dean has a limited appetite for the types of camps it will insure. It will not cover activities such as sky diving, bungee jumping, white water rafting, mountain rock climbing, repelling, shooting or hunting, trampolines, ropes courses, zip lines and certain adult sports exposures like tackle football. The underwriter will write adult soccer tournaments but at a much higher premium than youth sports tournaments. FL Dean works primarily with its wholesale partners and is not actively pursuing agents.

Copyright © Crittenden Research Inc., August 10th, 2015