SYRACUSE — CH Insurance Brokerage, Inc., an independent agency located on the bottom floor of AXA Tower I in downtown Syracuse, on July 1 closed on its acquisition of certain workers’-compensation programs from NYCM Group in Cicero, which is no longer in business. CH Insurance declined to disclose the acquisition cost but used agency […]
SYRACUSE — CH Insurance Brokerage, Inc., an independent agency located on the bottom floor of AXA Tower I in downtown Syracuse, on July 1 closed on its acquisition of certain workers’-compensation programs from NYCM Group in Cicero, which is no longer in business.
CH Insurance declined to disclose the acquisition cost but used agency assets to complete the transaction, says Joseph Convertino, Jr., who along with his father, Joseph Convertino, Sr., co-owns the agency.
The programming accounts serve electrical contractors and automotive and service-industry programs.
“It’s an added client base obviously with revenue,” says Joseph Convertino, Jr.
The acquisition also means Anthony (Tony) D’Amato, who managed the programs, has also joined CH Insurance and will serve as a senior-client advisor.
Joseph Convertino, Jr. believes the sales expertise and sales agents at CH Insurance will drive those workers’-compensation programs to “the next level.”
NYCM Group catered to a “niche market” with workers’-compensation policies, D’Amato says.
“Most of the programs that were managed were geared at contractors,” D’Amato says.
The workers’-compensation environment is “difficult” for contractors in New York, and the number of carriers in the marketplace was “shrinking,” which made it difficult to continue programs going forward, he adds.
D’Amato points to New York’s Scaffold Law, which is more than 125 years old, as one reason why.
Under the legislation, if contractors fall from an elevated position, they can’t directly sue the employer under New York’s workers’-compensation law, but they can sue the general contractor or the property owner in a general-liability suit, according to D’Amato.
That third party can then bring a lawsuit against the workers’-compensation insurance carrier and increase the cost of a given claim, he adds.
With the risk of those higher claims, several carriers aren’t “really interested” in offering workers’-compensation policies for contractors, he adds.
D’Amato’s former business partner delivered word of the NYCM Group closure on the firm’s website.
“It is with great sadness and regret that we announce that NYCM Group has closed its doors and has gone out of business,” wrote David Francey, CEO of NYCM Group, in an online letter to its clients and agents dated July 1.
“The many challenges that faced the workers’-compensation industry and lack of markets to develop products and place business were too great and made it difficult to sustain our operations. Therefore, the decision was made to close the business,” Francey wrote.
Francey has since retired, D’Amato says. D’Amato and Francey were among a group of five people who owned the NYCM Group.
NYCM Group isn’t to be confused with Edmeston, N.Y.–based New York Central Mutual Fire Insurance Co. (NYCM Insurance).
NYCM Group was managing a few other programs; one was sold to another agency out of state, another was “closed up,” D’Amato says.
“There is really nothing more of NYCM Group,” D’Amato says.
Joining a new agency
CH Insurance was familiar with D’Amato’s work for about a decade because the agency utilized NYCM Group as a partner for its clients, Joe Convertino, Jr. says.
“I thought it was a good synergy to bring him in and grow that business but also have him do other things to help CH,” Convertino, Jr. adds.
D’Amato’s additional responsibilities will include working in claims management, large-account marketing, and sales, the younger Convertino says.
D’Amato had mentioned the NYCM Group situation to the Convertinos during a conversation near the end of May, and eventually “we ended up getting together,” Joseph Convertino, Sr. says.
“It was fairly fast,” Convertino, Jr. notes.
The programs CH Insurance bought existed with a specific carrier, which CH declined to name.
“That insurer made an agreement with Tony and his team that they would provide the coverage,” according to Convertino, Sr.
The program adds another piece of business to CH’s book of business, which allows the agency to call on electrical contractors and automotive personnel that aren’t in this program.
CH Insurance also serves firms in the hospitality, manufacturing, health-care, whole sale, distribution, and retail sectors.
“As an independent agent, we write workers’ comp[ensation policies] for all those classes,” the younger Convertino says.
Founded on March 31, 1999, CH Insurance Brokerage, Inc. operates in a 4,500-square-foot space in AXA Tower I at 100 Madison St. in Syracuse.
The agency employs 25 people (including D’Amato) between offices in Syracuse and Rochester, along with its DHH Insurance Agency, LLC and Schillaci Agency, both in Rome.
CH Insurance leases space with CBD Companies, the property manager at the AXA Towers.
The Convertinos declined to disclose the agency’s revenue information, only saying that it “increased” between August 2012 and August 2013.
Contact Reinhardt at ereinhardt@cnybj.com