Issues & Answers Special Advertising Section
“In today's market, we emphasize to our underwriters [to] consider a target of expiring premiums, because that's always been the gold standard in our business.”
Surplus lines grew in 2019 by over 11%, and it’s increasing even more in 2020. We’ve seen growth come from the dislocation of business or from the standard market, along with rate increases that have allowed companies to grow organically. We’re finding that disciplined E&S companies want to take advantage of the market and grow their books that fit their risk appetite as well as their expertise and stay in their lanes. There’s so much opportunity within these standard E&S lanes. E&S is experiencing opportunities with businesses moving out of standard markets, either due to risk appetite or underwriting profitability. PHLY is seeing an uptick of submissions and binders that reflect increased opportunities across the desks of all three of our departments.Do you see any difference between the small accounts and the larger business in E&S?
I do see a tremendous difference between larger and smaller accounts in the E&S space. Large accounts look great on a production report. Writing them will typically result in some celebratory high fives around the office. That said, they really present a tougher sliding scale of rate. Your rate online for a larger account tends to be smaller. As the exposure and premium increase, the overall rate tends to decrease. That’s OK for one account, but if you build a book of business on larger accounts, your rate tends to be a little less adequate than on smaller to midsized accounts. PHLY E&S targets more in the small to middle market accounts. The servicing can be simple with fewer exposures and locations. Small accounts also tend to have higher renewal retention.
Do you see segments at PHLY that are experiencing exceptional market change?
Our experience in environmental has been superior. Mostly this is on the backs of the underwriters on our team. Many of them have environmental science or engineering degrees and come from consulting backgrounds. They understand the science behind the business they write. It’s a growing and profitable piece of our book. We expect that growth to continue.
What are the areas of business where PHLY E&S Solutions excels?
At PHLY we concentrate our efforts around speed of service. In what we consider the old E&S world, and one in which I grew up, most underwriters wait for carriers to lay their cards on the table before stepping up. They’ll wait for all the terms, all the quotes to be out there, and then decide whether it’s an opportunity to formalize a quote and to spring into action. We’re in a different time right now. While we ask appropriate questions, we do our best to get the quote out of the door quickly. We want the broker and the insured to either make a quick decision or have the time to come back and ask questions. In the same way, if we’re not a market for the opportunity, we’ll let the parties know quickly, and allow them to locate that market. We want to provide that service fast and give the insured an option so that they can be comfortable in the decision process. It’s very effective in today’s market. It’s probably even more effective than any advertising that I can come up with.<!###CONTENT:END###>