Bill Taulbee: Lykes CEO says consumer market strong

Bill Taulbee has worked for the commercial insurance firm Lykes Insurance more than 25 years. On Jan. 1, the 54-year-old became the 91-year-old firm’s CEO after John Brabson retired. The company has provided insurance for meatpacking plants, citrus operations and steam ships. Taulbee recently spoke with Orlando Sentinel finance reporter Marco Santana.

CFB: What can consumers expect out of the insurance industry this year?

There is a lot of capital out there. So a lot of insurance companies are looking to get some market share, and that makes pricing competitive.

CFB: What about insurance pricing?

Well, we do insurance for everybody. But for businesses budgeting insurance, due to a lack of storms and a lack of major catastrophic events, insurance pricing has not gone up in the past few years. The world of insurance pricing has been relatively flat. The industry has been in very good shape, the

best it’s been in probably 15 years. What that means to insurance companies is they are underwriting risk where they should be. There is not a lot of outside influence.

CFB: Hurricane seasons have been relatively quiet for several years.

We haven’t had a major storm or hurricane in the southeast U.S. since the Hurricane Charley, Francis and Katrina days. Without those storms, the industry is very financially viable. What that means is pricing should be under control.

CFB: What do clients look for in an insurance company?

If you have more payroll or revenue, you have greater exposure to potential future loss. Clients look for a way to minimize future claims. We try to understand who our clients are and where they want to go. Knowing that, we can identify potential exposures to loss.

CFB: Your company has insured, at one time or another, operations from steam ships to cattle companies. How does that diversity help?

We bring a unique understanding of issues related to transportation. We have this expertise because it’s in our DNA. It gives us the ability to understand some unique industries.

CFB: What about auto insurance? Why do premiums keep rising?

I drive a lot and it’s unusual for me to be on I-4 and not see a collision. A lot of it is careless driving, which comes [often] from cellphones. I drove to Tampa recently and I saw four wrecks, all of which were rearend collisions. Those accidents lead to higher premiums.

CFB: But the trade-off, of course, is coverage when you need it, right?

As a consumer, you look for price, which is very important, and coverage and your ability to handle your claim when it occurs. You want to trust the insurance company will provide that coverage for you. On the other hand, when the insurance company receives a premium, they offer to cover you when you need to fix a vehicle and that can easily reach the tens of thousands of dollars.

CFB: So accidents are a bad thing for the industry, too.

The insurance industry doesn’t like accidents, because they are out to make a profit. So if everyone is out there wrecking their cars, insurance companies would go broke. They don’t like claims or accidents any more than you do. They are just as invested in you as you are in them. It’s a partnership.