Issues & Answers Special Advertising Section:
“Cyber exposure isn’t new, but its impacts are evolving and expanding, and insureds need customized coverages, which is what we do best.”
According to the recently released 2021 Stamping Office Annual Report, the market continues to experience record premium levels. The 15 states with surplus lines stamping offices just recorded a 22% premium increase for 2021 over the previous year, and they reported a 6.6% increase in transactions. Coupled with the 17.5% increase reported for the market in the AM Best 2021 Special Report for 2020, the figures continue to be strong, and the financial strength and stability of the market is clear.Where is that growth coming from and what trends are you seeing?
Growth seems to be coming, in varying degrees, from across the board. Both overall premium and total filings are up, so it’s not being driven by pricing alone. According to the stamping offices, there’s growth in demand in D&O, professional, excess liability, property, residential flood, wildfire and cyber coverages. It seems that an increased frequency of weather-related events, social inflation, nuclear verdicts and cyberincidents are also likely at play. Also, economic growth is certainly a component of the growth we are experiencing.
It’s also important to remember that this segment is designed for innovation, so in a time of rapidly developing technologies and emerging risks, the E&S industry naturally excels. Cyber exposure isn’t new, but its impacts are evolving and expanding, and insureds need customized coverages, which is what we do best.
What advice would you offer regarding accessing the wholesale distribution system?
We have always known that wholesale distribution delivers tremendous value to retail agents and insureds, and WSIA members are specialists who can offer access to markets, coverages and options that just aren’t available in the standard market. In late 2021, WSIA partnered with Conning Inc. to update an analysis of data from 2016-2020, which confirmed that wholesale distribution does not increase the cost of the transaction to the insured. That analysis determined that the cost of wholesale distribution was lower than retail distribution by 1.8 percentage points, which makes consulting a wholesale expert a common-sense approach for insurance buyers, particularly in emerging risks. There is never a cost to seek a wholesale quote, but there is high value when buyers need an expertly crafted solution from the wholesale market.