Renovations invigorate Alaska's insurance industry.

• Author: Denny, Catherine

PLAGUED BY INSTABILITY and insolvency, the nation's commercial insurance industry is struggling to restructure and move on. Many national insurance firms have avoided Alaska, which they perceived as a higher risk market, and when loss of business during the economy's downturn further fanned the flames, several agencies pulled out of the state. Others were forced to downsize, consolidate or specialize to combat price wars and falling revenues that characterized the soft market. Still undergoing a metamorphosis, Alaska's insurance firms today compete in a slowly reviving economy.

Richard Lowell, president of the insurance agency/brokerage Ribelin Lowell and Co., a business concentrating on property/casualty accounts, notes, "This is a countrywide phenomenon that's going on. It's a concentration of companies and agencies. The number of agencies in the United States is going down substantially." Robert Ribelin, vice president of the company, estimates there is about 25 percent shrinkage nationally, and says 25 fewer insurance agencies are doing business in Alaska than were prior to the decline.

Evident from rampant business name changes, some Alaskan agencies opted to join forces. "Agencies don't merge and get together unless one is in trouble. There's got to be an advantage for both parties," says Lowell.

Some, like the national firm Rollins Burdick and Hunter, opted to quit Alaska. It sold its business to Ribelin Lowell in 1988, but returned to the state last year when it bought Bayly Martin and Fay.

Many agencies are avoiding certain lines of insurance and concentrating on specialties. Lowell explains some firms had difficulty controlling losses and servicing diversified accounts, which resulted in decreased revenues.

Ribelin Lowell recently sold its employee benefits accounts to Blackwood Frazier, which this year became David Frazier and Associates, and purchased that company's property/casualty accounts. Explains Lowell, "There's very few people available who are qualified to service and market employee benefits." He predicts the '90s will see a major shortage in trained personnel, particularly those qualified in the employee benefits line.

David Frazier, president of David Frazier and Associates, says significant changes in tax laws in recent years have compounded the skill-shortage problem by raising the technical skill level required to handle specialized lines of insurance; employee benefits, for example.

Per Bjorn-Roli, Alaska general manager for New York Life, says he has not observed an employee shortage in the life and health insurance lines. "Because of the soft economic market, we've attracted high-quality people from other industries-banking and real estate, for example. These are capable people whose product didn't sell any...