Mary Hughes Has a Foot in Both Worlds

As president of ProSight Specialty Insurance’s construction and energy niches, Mary Hughes is committed to delivering high-value programs in the two industry sectors and their subsectors

You oversee two niche insurance markets at ProSight—construction and energy. What do you enjoy about your role?

I like the ability to create, within a particular niche, different ways to help clients grow their businesses. That could involve insurance, but we also develop solutions. For example, we just launched a website, luxehomeshowcase.com, which allows our high-end builders to display the types of houses they build. Creating a cool visual representation of our customers’ projects is just another way to help them elevate their businesses beyond protecting them from an insurance standpoint. It gives them another resource to help them thrive, and that helps us thrive.

Would you say that’s what distinguishes ProSight?

It’s part of our business model, which I think is what distinguishes us. We believe customers nowadays are looking long and hard at who they choose as insurance carriers and what kinds of offerings those carriers provide. They really want to understand the value they’re getting. So, we’re focused on delivering high-value solutions that go above and beyond insurance coverage and really make a difference in people’s businesses. To do that, we have expertise at the niche customer level, both in-house and in our distribution partners such as Quaker Special Risk, which is the distribution partner for our residential homebuilders, construction managers, and trade contractors programs. Quaker has a number of people dedicated to the residential home space; they’re experts in what they do and can bring value both to retailers who bring them business and clients. It is the same for our Metrobuilders Program, which insures high-rise construction projects in New York managed by our distribution partner, Program Brokerage Corp.

What are the differences between the two sectors you oversee?

The construction world and energy world have a lot of differences but also a lot of similarities. In the construction niche, the businesses we serve are diversified, from high-rise apartments, hotels, condos, and office buildings to high-end luxury residential homebuilders, constructing homes valued at $3, $5, $10 million or more. In the energy niche, we have focused on construction and related services such as oil and gas contractors, solar-energy contractors, and propane and fuel dealers.

You mentioned that you write programs for both commercial contractors and residential homebuilders. Do they present different challenges?

They’re similar in regard to how we approach them. Our business model in this sector focuses on risk-transfer business. Our general contractors utilize subcontractors to help them build their projects, so their business model requires them to spend a lot of time evaluating the skill level of those subcontractors as well as ensuring those subcontractors have the appropriate risk-transfer mechanisms and coverages in place to protect them in the event that there is a problem. Both our commercial and residential programs are focused on ensuring our clients have that protection. Where we do see differences is from a geographic standpoint. For example, the challenge in writing commercial in New York is the New York labor law. In residential, it is construction defects.

How do you factor in those differences when putting together programs?

As one example, when we put a program together such as a residential program, where you’re more commonly going to find the potential for construction defects in the cookie-cutter type of homebuilding, we focus on the high-end homebuilders. These are individual homes, architecturally custom-designed. You do not have the problem of the same mistake or error multiplying over several hundred homes. While building individual custom homes doesn’t eliminate construction defects, it certainly mitigates the concerns of the same mistake or error being made in multiple-homes construction.

Could you talk about some of the challenges you face as a specialty insurer?

It’s critical to stay on top of what’s happening in each niche, what’s affecting our insurers and our business partners, and how that impacts the insurance industry. For example, in 2007, 2008, and 2009, with the downturn in the economy, residential construction suffered significantly, and many companies went out of business, or contractors retired or left the industry. As the economy started to improve, contractors had problems finding skilled labor. With Superstorm Sandy and Hurricane Katrina, high demand led to a shortage of both skilled labor and materials. When Katrina hit, for example, the United States didn’t have enough supply of drywall, and it was imported from China. Over time, it was learned that the Chinese drywall material was causing injury and damage.

Do you have any new projects in the works?

As I mentioned, we’re focused on delivering high-value solutions that go above and beyond insurance coverage. This year, for example, we launched a number of new differentiators—such as background checks, obstruction of premises supplemental coverage for residential homebuilders, and LuxeHome Showcase—and are looking at others that we feel will either help customers in their risk-management efforts or promote their businesses.