When logging insurance became difficult in the Pacific Northwest, the company started its own program

When the going gets tough, the tough goes. This is perhaps the most appropriate slogan for Ax Insurance Group.

The logging industry can be as tough a business as one can find. Not only is it well known that it’s hard work, but it’s an industry that isn’t always liked or understood by everyone.

Obtaining and maintaining insurance for U.S. logging contractors has become increasingly difficult, and the increase in wildfires has made business difficult.

Several factors are working against loggers seeking insurance: strict eligibility guidelines, insurers exiting the market, an ongoing driver shortage, too many young drivers in the business, legislative issues, nuclear convictions, and as mentioned, wildfires.

Many of these factors are not new and have deepened over the years. Over a decade ago, when an insurance business was faced with the difficulty of finding insurance for their customers at good prices, they decided to cut their own path.

Brian Graham

Associated Insurance Services is an independent insurance agency established in 2005 as a subsidiary of Associated Loggers Exchange, a mutual workers’ compensation insurer operating in Idaho and Montana. It is closely associated with the Associated Logging Companies of Idaho and Montana.

One of the biggest problems the company faced was that national logging programs made many of their underwriting decisions based on what was happening in other areas, such as the southeast.

“It had quite an adverse effect on the way their programs began to look in our region of the country,” said Brian Graham, the firm’s director of forest products. “That really led to the need to try to find something better.”

That “something better” finally came, after years of work, on March 1 with the launch of Ax Insurance Group, a program in Idaho and Montana underwritten and backed by Lloyd’s of London Marketplace.

The Pacific Northwest is a tough industry. So a program called the Ax Insurance Group was created to make insurance more affordable and accessible to loggers.

The logging insurance program includes general liability, commercial auto, equipment and additional liability. It is tailored to meet the needs of the North West logging and log hauling industry.

The program was more than a decade in the making. And according to Graham, who led the development of the program, it may be the first program of its kind developed by an insurance agency.

“It’s been a long time coming,” Graham said.

And he means long. Work on the creation of the program began in 2010.

At the time, the company didn’t have a large enough track record and didn’t have the data to back up the information they were providing to the markets they were introducing the program to.

“They wanted a lot more detail on the claims numbers, specifically to justify the loss ratios that we were saying we were recording in our program up to that point,” Graham said. “Basically, we kind of decided that we needed to get down to really tracking that information internally a lot better than we were and not relying on the actual insurance companies that we wrote the policies through to give us that information.”

Thanks to this foundation, they ended up getting help from a well-connected insurance professional named David McPherson, who worked with CJ Coleman & Company in London.

“He started taking data from our programs around the London market to find us someone who would be willing to partner with us,” Graham said. “That process started in 2020. We were about 10 years ago from when we originally started this whole concept of things that we’re trying to achieve. It got some traction in a few places, but some markets didn’t want to give us the whole program. We wanted it to be everything. We wanted the car, the responsibility, the access, the equipment. We wanted it all.”

The logging industry can be as tough a business as one can find. Not only is it well known that it’s hard work, but it’s an industry that isn’t always liked or understood by everyone.

Finally, in 2021 Macpherson helped the firm found an insurance arm of Lloyd’s called Brace Underwriting Ltd.

“We started working with them and it took us about a year to finalize everything about what our policies would look like, what the rates would look like, what our authority in their program would give us on that side of things,” he said. “We finally secured Lloyd’s signing and the contract with them on March 1 this year.”

It comes at a time when more states and entities are asking for more loggers to help with wildfires that are particularly severe in the Western US

“We’ve seen the state, and indeed the federal government, start to open up more land both for harvesting and with the concept of fire mitigation, providing more tree spacing in the forest and kind of cleaning things up, out there along -better than it has been in the past,” Graham said.

Of course, this creates another insurance consideration for the industry.

“A lot of the insurance companies have concerns, and I guess understandably so, about dealing with or around wildfires,” he said. “We think it’s better to put out these fires than to start them. We want to help encourage our customers to get involved in these things and be part of the solution on that side of things.”

Leave a Comment