June 13, 2005
The insured outdoors | Lewiston-based Hartford Inc. expands its campground insurance business to include paddlesports outfitters
By Jeffrey Bouley
Most Mainers don't think of outdoor insurance when they think of Lewiston-based Hartford Inc. In central Maine, the third-generation insurance provider is most commonly associated with life, health, property, casualty and business insurance. But over the last 20 years, the company has established a lucrative niche in insuring campgrounds ˆ a business it discovered by happenstance.
"Back in the early 1970s, we had a camp up north, and we had to go through a campground to get to our place," recalls Justin Hartford, vice president of marketing, who now runs the insurance company along with his brother Lucas, the president ˆ with occasional input from their father, Richard, who Justin describes as being "mostly retired." "We were on our way out one day and the owner of the campground, who was also president of a campground owners association, ran up to our car," says Justin. "The owner knew my dad sold insurance and just asked him right out there in the woods for help in securing liability coverage."
Richard and his father, Oscar Hartford, were able to help secure coverage for the campground owner, and the impromptu car-window meeting helped set the company down a new insurance path. But it wasn't until more than a decade later that Hartford found a solid niche in the campground insurance business. What separates campgrounds from other businesses requiring insurance is the range of services campgrounds provide ˆ many of which create some risk for users.
"Campgrounds are like small cities," says David Tetrault, executive director of the Northeast Campground Association, which is based in Stafford, Conn., and has 1,188 member campgrounds throughout 11 northeastern states. "They provide electrical, sewer, water, phone and cable service ˆ some even provide wireless Internet. Campgrounds offer a wide range of activities such as swimming pools, boat rentals, propane gas, child care, waterslides, shuttle bus services and much more. With some campgrounds having thousands of guests at a time, they may have a great deal of liability."
Tetrault says that because of the high risks that often accompany campgrounds, few insurance companies are willing to cover them. But Evergreen USA Risk Retention Group has captured a significant portion of the market. Behind Evergreen is Hartford Inc., which includes The Hartford Agency and other business entities. Today, the company covers approximately 1,500 campgrounds nationwide, and has begun to branch out into another challenging outdoor insurance segment: paddlesports. While the increasing popularity of sports such as kayaking means a market opportunity for Hartford, the company must figure out how to increase its business in that segment without neglecting its core customers.
"The challenges we face going forward are those of any service organization," Justin Hartford says. "We want to make sure we are employing quality people, that we don't grow so fast that we cannot satisfy our current clients and we want to maintain a solid program."
A risky market
Around 1985, the insurance industry was getting to a point where many companies would no longer cover campgrounds because of the wide range of risks and liability, according to Lucas Hartford. And those that would cover campgrounds, he says, were charging exorbitant rates. It was a situation similar to what the campground owner who talked to his father had faced in the early 70s, only worse ˆ and nationwide. So Richard Hartford began researching how to create an entity that would specifically insure campgrounds. With a core group of about 20 campgrounds from California to Maine, Hartford Inc. in 1989 created Evergreen USA to do just that.
Evergreen is a captive insurance agency, meaning it is owned by the people it covers. So although Hartford helped launch the company, Evergreen actually is owned by people in the camping industry, from campground and RV park owners to campground associations, and most of the initial funding came from them, not from Hartford. (Justin Hartford estimated Evergreen's startup costs at about $500,000.) The campground owners, though, are not insurance experts, so Evergreen farms out the administrative functions to International Insurance Services, a subsidiary of Hartford Inc. (See "Follow the money," p. 31.)
Evergreen is now the longest continuously operating insurance program for the campground industry, according to Tom Gerken, vice president for international insurance services for Hartford and head of sales for its outdoor recreation program. "There have been easily a dozen companies that have been in the marketplace since Evergreen started, almost all of which ended up leaving the market at some point," he says.
George Harper, president of Tri-State Insurance Agency in Augusta, N.J., is one of those who left the market. He used to insure 400-500 campgrounds, but ultimately sold that part of his business to Hartford a few years ago because, he says, the company could handle the risks better. "This is a very specialized market that a lot of people just don't understand," says Harper, referring to the multitude of potential liabilities ˆ ranging from propane tank explosions to poolside accidents ˆ that campgrounds can encounter.
As Tetrault of the Northeast Campground Association sees it, insurance companies sometimes enter the market without taking into account all these risks and charge too little for premiums. Then, when they have to start covering claims, they find that they have to increase rates to make up for their earlier error ˆ or they determine that the risks are too great and simply exit the market. "It's uncharted waters for most insurance companies and insurance agents," Harper adds.
Today, campground policies account for roughly 60% of Hartford's revenues; the company declined to provide specific revenue figures, though it said that the average campground pays $3,800 a year for coverage.
A key part of the company's strategy, says Justin, is an emphasis on safety. Hartford, he says, looks to see where the risks are so that campground owners can take care of those risks and reduce their liability, thus keeping claims and insurance costs down. "We are very careful about what we do and we make sure our clients are careful, too," Justin says. "There is nothing worse than a loss that could have easily been prevented."
Tom Bayley, general manager of Bayley's Camping Resort in Scarborough, has been getting his campground insurance from Hartford for more than 30 years; his parents, Fred and Kathleen Bayley, helped get Evergreen off the ground. "I've looked at other insurance companies to be sure," says Tom Bayley. "I talk to other people. But I know what I'm getting with the people at Hartford. They [explain] the gray areas of coverage very well so that I'm not leaving myself open to major liabilities."
Testing the waters
Hartford's foray into paddlesports emerged when managers noticed that, much like the campground insurance bust in the mid-80s, many companies that insure whitewater outfitters and other paddlesport operations have pulled out of the market over the past few years, having charged rates that were too low to cover losses.
Justin Hartford says he and his brother began easing their company into the market gradually late last year. Most of Hartford's focus is on activities that operate on flat waters or rapids of class three ˆ classified as intermediate ˆ and lower. The company has three inspectors who travel across the country, visiting clients to help ensure that, for example, there are no tripping hazards, proper signage is in place, boats are safe and proper instructions are given to people who go out on the water. Hartford has also created paddlesport-specific safety videos to its line of risk management materials for clients.
Justin and Lucas are interested in continuing to expand beyond the few dozen paddlesport operations they currently cover, as they learn more about the risks and returns, but they aren't rushing into this more risky venture. And Hartford is being even more cautious with high-risk whitewater operation. Currently, fewer than 10 paddlesport operations with class four or class five rapids are insured through Evergreen USA.
"When you're going through the big rips, people better know what they are doing, and we have to be careful to make sure whitewater operators are on top of that issue," says Justin. "Certainly, this is an area we're willing to look at, but [we] don't want to rush in at the expense of our other clients by paying out losses we could have prevented by being more careful."
Kittatinny Canoes, which offers rafting, kayaking, canoeing and tubing along the Delaware River in Pennsylvania, is one of Hartford's newest watersports clients through the Evergreen program. Kittatinny had been using insurance from another provider that dropped out of the market. According to Ruth Jones, president of Kittatinny Canoes, the company was having trouble getting good prices and coverage from a lot of companies because of the risk involved in whitewater coverage.
"I knew about Evergreen because I own two campgrounds and their information is always floating around," says Ruth Jones, president of Kittatinny Canoes. "We heard they were starting to write fairly heavily in whitewater and contacted them."
Jones says she got the best quote and best coverage from Evergreen. "When we had the severe flooding damage along the Delaware this spring, they called me up and gave me an extended payment plan for my premiums without any additional interest or anything like that," Jones says. "And they did that voluntarily, without me ever having to even ask."
According to Justin Hartford, the company doesn't have a specific revenue target for the paddlesports business. "If it went well, we wouldn't be unhappy to see it be half our business," he says, "but 15% or 20% would also be great if it's profitable."
In the end, he says that Hartford Inc. will continue to aim for slow, steady growth. "Our philosophy [has] always been to do things not necessarily conservatively but at least judiciously," Hartford says. "We want to be responsible about how we grow."
"Back in the early 1970s, we had a camp up north, and we had to go through a campground to get to our place," recalls Justin Hartford, vice president of marketing, who now runs the insurance company along with his brother Lucas, the president ˆ with occasional input from their father, Richard, who Justin describes as being "mostly retired." "We were on our way out one day and the owner of the campground, who was also president of a campground owners association, ran up to our car," says Justin. "The owner knew my dad sold insurance and just asked him right out there in the woods for help in securing liability coverage."
Richard and his father, Oscar Hartford, were able to help secure coverage for the campground owner, and the impromptu car-window meeting helped set the company down a new insurance path. But it wasn't until more than a decade later that Hartford found a solid niche in the campground insurance business. What separates campgrounds from other businesses requiring insurance is the range of services campgrounds provide ˆ many of which create some risk for users.
"Campgrounds are like small cities," says David Tetrault, executive director of the Northeast Campground Association, which is based in Stafford, Conn., and has 1,188 member campgrounds throughout 11 northeastern states. "They provide electrical, sewer, water, phone and cable service ˆ some even provide wireless Internet. Campgrounds offer a wide range of activities such as swimming pools, boat rentals, propane gas, child care, waterslides, shuttle bus services and much more. With some campgrounds having thousands of guests at a time, they may have a great deal of liability."
Tetrault says that because of the high risks that often accompany campgrounds, few insurance companies are willing to cover them. But Evergreen USA Risk Retention Group has captured a significant portion of the market. Behind Evergreen is Hartford Inc., which includes The Hartford Agency and other business entities. Today, the company covers approximately 1,500 campgrounds nationwide, and has begun to branch out into another challenging outdoor insurance segment: paddlesports. While the increasing popularity of sports such as kayaking means a market opportunity for Hartford, the company must figure out how to increase its business in that segment without neglecting its core customers.
"The challenges we face going forward are those of any service organization," Justin Hartford says. "We want to make sure we are employing quality people, that we don't grow so fast that we cannot satisfy our current clients and we want to maintain a solid program."
A risky market
Around 1985, the insurance industry was getting to a point where many companies would no longer cover campgrounds because of the wide range of risks and liability, according to Lucas Hartford. And those that would cover campgrounds, he says, were charging exorbitant rates. It was a situation similar to what the campground owner who talked to his father had faced in the early 70s, only worse ˆ and nationwide. So Richard Hartford began researching how to create an entity that would specifically insure campgrounds. With a core group of about 20 campgrounds from California to Maine, Hartford Inc. in 1989 created Evergreen USA to do just that.
Evergreen is a captive insurance agency, meaning it is owned by the people it covers. So although Hartford helped launch the company, Evergreen actually is owned by people in the camping industry, from campground and RV park owners to campground associations, and most of the initial funding came from them, not from Hartford. (Justin Hartford estimated Evergreen's startup costs at about $500,000.) The campground owners, though, are not insurance experts, so Evergreen farms out the administrative functions to International Insurance Services, a subsidiary of Hartford Inc. (See "Follow the money," p. 31.)
Evergreen is now the longest continuously operating insurance program for the campground industry, according to Tom Gerken, vice president for international insurance services for Hartford and head of sales for its outdoor recreation program. "There have been easily a dozen companies that have been in the marketplace since Evergreen started, almost all of which ended up leaving the market at some point," he says.
George Harper, president of Tri-State Insurance Agency in Augusta, N.J., is one of those who left the market. He used to insure 400-500 campgrounds, but ultimately sold that part of his business to Hartford a few years ago because, he says, the company could handle the risks better. "This is a very specialized market that a lot of people just don't understand," says Harper, referring to the multitude of potential liabilities ˆ ranging from propane tank explosions to poolside accidents ˆ that campgrounds can encounter.
As Tetrault of the Northeast Campground Association sees it, insurance companies sometimes enter the market without taking into account all these risks and charge too little for premiums. Then, when they have to start covering claims, they find that they have to increase rates to make up for their earlier error ˆ or they determine that the risks are too great and simply exit the market. "It's uncharted waters for most insurance companies and insurance agents," Harper adds.
Today, campground policies account for roughly 60% of Hartford's revenues; the company declined to provide specific revenue figures, though it said that the average campground pays $3,800 a year for coverage.
A key part of the company's strategy, says Justin, is an emphasis on safety. Hartford, he says, looks to see where the risks are so that campground owners can take care of those risks and reduce their liability, thus keeping claims and insurance costs down. "We are very careful about what we do and we make sure our clients are careful, too," Justin says. "There is nothing worse than a loss that could have easily been prevented."
Tom Bayley, general manager of Bayley's Camping Resort in Scarborough, has been getting his campground insurance from Hartford for more than 30 years; his parents, Fred and Kathleen Bayley, helped get Evergreen off the ground. "I've looked at other insurance companies to be sure," says Tom Bayley. "I talk to other people. But I know what I'm getting with the people at Hartford. They [explain] the gray areas of coverage very well so that I'm not leaving myself open to major liabilities."
Testing the waters
Hartford's foray into paddlesports emerged when managers noticed that, much like the campground insurance bust in the mid-80s, many companies that insure whitewater outfitters and other paddlesport operations have pulled out of the market over the past few years, having charged rates that were too low to cover losses.
Justin Hartford says he and his brother began easing their company into the market gradually late last year. Most of Hartford's focus is on activities that operate on flat waters or rapids of class three ˆ classified as intermediate ˆ and lower. The company has three inspectors who travel across the country, visiting clients to help ensure that, for example, there are no tripping hazards, proper signage is in place, boats are safe and proper instructions are given to people who go out on the water. Hartford has also created paddlesport-specific safety videos to its line of risk management materials for clients.
Justin and Lucas are interested in continuing to expand beyond the few dozen paddlesport operations they currently cover, as they learn more about the risks and returns, but they aren't rushing into this more risky venture. And Hartford is being even more cautious with high-risk whitewater operation. Currently, fewer than 10 paddlesport operations with class four or class five rapids are insured through Evergreen USA.
"When you're going through the big rips, people better know what they are doing, and we have to be careful to make sure whitewater operators are on top of that issue," says Justin. "Certainly, this is an area we're willing to look at, but [we] don't want to rush in at the expense of our other clients by paying out losses we could have prevented by being more careful."
Kittatinny Canoes, which offers rafting, kayaking, canoeing and tubing along the Delaware River in Pennsylvania, is one of Hartford's newest watersports clients through the Evergreen program. Kittatinny had been using insurance from another provider that dropped out of the market. According to Ruth Jones, president of Kittatinny Canoes, the company was having trouble getting good prices and coverage from a lot of companies because of the risk involved in whitewater coverage.
"I knew about Evergreen because I own two campgrounds and their information is always floating around," says Ruth Jones, president of Kittatinny Canoes. "We heard they were starting to write fairly heavily in whitewater and contacted them."
Jones says she got the best quote and best coverage from Evergreen. "When we had the severe flooding damage along the Delaware this spring, they called me up and gave me an extended payment plan for my premiums without any additional interest or anything like that," Jones says. "And they did that voluntarily, without me ever having to even ask."
According to Justin Hartford, the company doesn't have a specific revenue target for the paddlesports business. "If it went well, we wouldn't be unhappy to see it be half our business," he says, "but 15% or 20% would also be great if it's profitable."
In the end, he says that Hartford Inc. will continue to aim for slow, steady growth. "Our philosophy [has] always been to do things not necessarily conservatively but at least judiciously," Hartford says. "We want to be responsible about how we grow."
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