A Brief History of STICO Mutual
The 1980s were turbulent times for a number of industries, but none more so than for the underground storage tank industry. Leaking underground storage tanks (LUSTs) were in the national news and the insurance industry took notice – by refusing to write the environmental risks of underground storage tank manufacturers. The manufacturing members of the Steel Tank Institute (now STI/SPFA) were left with only one choice: forming their own insurance company. In 1988, the Steel Tank Insurance Company (STICO) was born.
The 1990’s was a decade of growth for STICO. We broadened our risk appetite and began covering aboveground storage tanks and petroleum equipment contractors. In order to access A-rated paper, we entered into a relationship with a fronting carrier and also entered into our first, full-risk transfer reinsurance agreement. These two developments allowed us to write the higher limits that our insureds demanded and set the stage for membership and premium growth that began in earnest in the early 2000s.
In 2002, in an attempt to regain control over our ratemaking, underwriting and claims handling, we ended our relationship with our fronting carrier and converted to a risk retention group. This conversion allowed STICO to directly write business in various states without obtaining admitted status. Risk retention groups operate under the federal Liability Risk Retention Act, which requires that they adhere to the rules and regulations of only one state – their state of domicile – and then are allowed to
transact business in the other forty-nine states. This conversion also came with a name change – the Steel Tank Insurance Company became STICO Mutual Insurance Company, RRG.
At about the same time, AM Best upgraded STICO Mutual’s rating from B++ to A-. The A-rating, combined with full control over our rates and policy language turbocharged our growth over the subsequent decade. We ended 2002 with 58 insureds. By the end of 2003, we had over 80. We were over 100 by 2007 and the growth trend has continued.
The success STICO Mutual has enjoyed since 1988 is grounded in our deep understanding of the tank, vessel and equipment industries. This expertise directly translates to tailored policy language that is consistently evolving, precise rating, expert claims handling and a variety of industry-specific, members only services. We are owned by those whom we insured and therefore reflect the best that the industry has to offer.
