Summertime is here and campgrounds and RV parks are filling up around the country with those looking to get away for a low-maintenance vacation. But travelers’ expectations of what a camping adventure should entail have changed and so have the exposures as campground and RV park owners step up their offerings to entice outdoor enthusiasts. Amenities like swimming pools, mountain biking and hiking trails, river rafting, horseback riding, fishing and hunting options – just to name a few – are becoming commonplace at campgrounds and RV parks as they try to attract tourists to their facility.
Another new trend called “glamping” – made well-known by the Real Housewives franchise – has become popular and offers upscale or “glamorous” resort type campgrounds with expanded services and attractions.
What has also increased in this class is competition among insurers going after the business, which was reportedly what caused Evergreen USA Risk Retention Group Inc. to cease writing new policies in May and stop renewing existing business as of July 15, 2014.
“Unfortunately, by showing the insurance world that campgrounds could be a good risk, we now face stiff competition from extremely large companies with the resources to beat our rates and provide incentives we can’t always match,” said Lucas Hartford, Evergreen USA president, in a statement on the company’s website. “In these times, price is more important than ever to our customer’s success.”
Renewal options to replace the Evergreen USA policies when they expire will be offered by Leavitt Recreation & Hospitality Insurance, a nationwide agency based out of Sturgis, S.D.
“Evergreen’s exit is reflective of the increased capacity in this class. We are talking about a really small carrier in terms of volume compared to any of the insurance companies we do business with,” says Chris Hipple, vice president and managing co-owner of Leavitt Recreation & Hospitality.
Leavitt Recreation was approached by Evergreen to purchase its renewal book of business, which will be predominantly absorbed by one of the six to eight carriers Leavitt works with, including Fireman’s Fund, Penn-America Group, Philadelphia and Capital Indemnity Group. Hipple declined to disclose which carrier will be the main one taking over Evergreen renewals. Leavitt also hired three of Evergreen’s producers to assist in the process of transferring and managing the Evergreen accounts.
Hipple says although Evergreen is selling its renewal book to Leavitt, there is no guarantee they will receive all the policies, but he does expect to see substantial growth from the acquisition of its book. The company will focus on making the transition easy for clients, who Hipple says so far have been relieved to have a plan in place.
“We are trying to absorb a large book of business, so in order to do that you have to make it as simple as possible for everyone involved,” he says. “The more complex it is the less business you capture.”
Hipple says that also means they will not be working as an open brokerage until the new business is up and running.
As Campgrounds Grow, so do Exposures
The increased competition in this market has been motivated by the growth in profits campgrounds have seen in the past few years, which experts attribute in part to the downturn in the economy and people opting for simpler trips as opposed to big vacations.
“When the U.S. dollar is trading poorly people are not going to Europe, but they have a camper sitting in their driveway and still want to go on vacation,” says Hipple. “There has been some up and down since the economy picked up, but those who are running good operations are doing well and those who are not investing in their parks are struggling a little more. This is common with any service business.”
For insurers, the enhanced activities campgrounds and RV parks are offering to attract business has increased scrutiny during the underwriting process so insurers can remain profitable.
“Clients in this segment are not stagnant. They are adding exposures to try and capture more revenue. Back in the day, an owner of an RV park offered a slot, electrical plugins, a bathhouse and would maybe sell propane. Now they are doing climbing walls, canoe rentals, operating a water park – all of these different things to keep the revenue in the campground,” says Hipple.
More attention must now be paid to a facilities risk management procedures, says Steve Gulini, vice president of marketing and AdvenSure program manager for McNeil and Co., including making sure all staff are properly trained to carryout recreational activities safely. McNeil & Co. offers a training curriculum that is developed by its risk management team for new hires at campgrounds and RV parks, which is available through its AdvenSure insurance program.
“There are inherit risks with the activities offered by each facility,” he says. “Employees are typically seasonal and there is a lot of turnover from season to season. We can put together a customized training review for all of the specifics that each individual campground owner can use.”
The company also works with agents and brokers on writing this class appropriately through onsite agency training classes, and has a tutorial on the application process for understanding the RV park or campground for which an agent is looking to offer a proposal. Gulini says the company promotes itself as a risk management firm that offers insurance.
Ron Norton, senior vice president of K&K Insurance Group’s Leisure Division, says there are plenty of exposures that are natural to this class because it is outdoors, including being near the water, overnight stays, maintenance issues like being on ladders and the upkeep of trees. There is also high potential for wildfires or other catastrophic events depending on what area of the country the campground is in.
“Every line in this space can be challenging,” says Norton.
K&K’s program has seen at least 50 percent growth since re-launching with National Casualty in 2010. It offers just about every insurance coverage campgrounds require and is one of the few companies to offer workers’ compensation, says Norton. K&K typically focuses on larger risks with premiums starting at $5,000.
Norton says agents would be wise to look at working with this class.
“It is an area for agents to bring in additional revenue to their agency because campgrounds are everywhere,” he says.
McNeil & Co.’s AdvenSure program also addresses most lines of coverage, including liability, excess umbrella, property, inland marine and auto, but does not write workers’ comp. Most recently the company filed a property endorsement to broaden its coverage and reduce the self-insurance risk for campground and RV park owners.
Gulini agrees this is a segment agents shouldn’t shy away from.
“For an agent there is a lot of growth opportunity. They can build a substantial book of business without traveling more than 100 miles from their office,” he says.