REPUBLIC HOGG ROBINSON EXPANDS WITH PURCHASE OF W. COAST BROKER

REPUBLIC HOGG ROBINSON EXPANDS WITH PURCHASE OF W. COAST BROKER

Republic Hogg Robinson Inc., a Boston-based subsidiary of London broker Hogg Group PLC purchased a West Coast credit insurance and political risk broker and combined it with its San Jose office, according to Renwick Severance, vice president, special services at Hogg Robinson.

Hogg Robinson purchased Export Credit Insurance Associates Inc., San Francisco, earlier this month. The new company, bearing the name Credit Insurance Associates Inc., has moved its offices to San Francisco.Mr. Severance said that with this move Republic Hogg Robinson has become the largest U.S. broker of credit and political risk insurance - based on premium volume.

"Up until now, we have a had a very small presence in Northern California," said Mr. Severence.

Republic Hogg Robinson wished to capture business from "people all over the country who export goods to any foreign country," Mr. Severance said. Hogg Robinson's small operations in New York City and the former operation in San Jose needed support from a larger outfit, the executive added.

Political risk insurance protects U.S. companies operating outside the United States against confiscation or expropriation of property by a foreign government. Coverage can also be provided for loss due to devaluation of currencies. The coverages can be purchased from private insurance companies, through insurance brokers, and also through government agencies like the Overseas Private Investment Corp.

Whereas Lloyd's of London and the London company market represents a major center for marketing these coverages, the size of the average U.S. political risk and credit insurance broker is quite small, said Mr. Severance.

Most are 2 to 3 person shops, he said.

And still, "competition has never been too fierce," said Roger Schwartz, vice president of political risk insurer, Unistrat Corp. of America, the U.S. arm of Dutch holding company, Unistrat Holdings BV.

"Competition was never cutthroat. Brokers just have to demonstrate that they are able to do the job. I've never heard of competition in the sense of what other insurance markets experience," Mr. Schwartz said.

Demand for the product has picked up slightly, however, he said.

Although Unistrat does almost no business in the former Soviet republics, Mr. Schwartz said the breakup of the Soviet republics and the privatization of formerly state-controlled operations means a greatly expanded marketplace for exporters.