PORTLAND, Maine — Bangor-based Cross Insurance wants to increase its share of the medical malpractice insurance market with a new division of the company led by staff it acquired through its purchase of another insurer earlier this year.
Dennis Lundgren, a vice president and one of two leaders of the company’s new health care practice, said in a phone interview Wednesday that the company sees insuring health care organizations as an area where it can gain market share and compete with brokers from outside of New England, especially for business in the Boston area.
“We have a presence and will continue with visibility down there,” Lundgren said, noting the company is the insurance broker for the New England Patriots and the Boston Red Sox. “We believe that will generate opportunities along with good old-fashioned prospecting on our part.”
Lundgren and William McKechnie, the new division’s other leader, both came to Cross after its acquisition of insurer Willis’ Northern New England branch earlier this year, Lundgren said. The new practice will be led out of Cross’ Lewiston office, but will take advantage of its growing presence farther south, in Manchester, New Hampshire, and in Massachusetts.
The new division will consist of three other Cross employees and doesn’t mean any immediate hiring, but Lundgren said it’s an area where the company hopes to gain a foothold against trends of rising medical costs and hospital consolidation.
“The bottom line is that the number of hospitals may not change too much, but the decision-making with respect to the hospital field will become very narrow over time,” Lundgren said. “That’s why we think we have an advantage at Cross, because we live work and play in all of these communities as opposed to trying to service the accounts out of Atlanta, New York or even Boston.”
The company now handles insurance for 19 hospitals in New England, 17 in Maine and two in New Hampshire. That work accounts for between $40 million and $50 million in premiums placed by the company in the last year. The company also hopes to expand its reach in insuring elder care facilities.
Increasingly, that’s being done through alternative insurance structures, Lundgren said, like the type of self-insurance set up through what are called captive insurers, which are member-owned insurance company that do not offer policies to the public. Those more customized insurance arrangements are set up as subsidiaries of the company.
The magazine Business Insurance reported in March that its survey found the number of licensed captive insurers rose to 6,559 in 2013, up from 6,125 in 2012. Maine started offering support for captive models for health insurance in August 2011.
States like Vermont and Utah have seen strong growth in captive insurers in recent years.
Lundgren said there’s no immediate plans for expanding the reach of the new practice through acquisitions, but that will be on the table.
“As Cross continues to look at acquisitions through New England, we expect to get more talent,” Lundgren said.