NEWS

SPECIALIZED

SUCCESS

While challenges remain, the E&S sector continues to innovate and thrive.

If only something could be done with all that excess capacity.

Freedom of rate and form, one might
argue, is a key ingredient in the ability to
surpass one’s contemporaries in a crowded
and competitive P&C market.

BY SHAWN MOYNIHAN

If anyone should wonder which sector of the Property & Casualty industry contin- ues to enjoy some of the most enviable results, they need only to consider the
Which is not to say such success is easily
earned. Several key hurdles must be traversed:

‘STATE OF FRUSTRATION’

Surplus Lines Stamping Office of Texas’ 2018 mid-year analysis of the 15 surplus lines service offices in the U.S.

As of the 2018 mid-year point, Excess
Many E&S executives will tell you that rates
still aren’t where they should be on several
key lines, although some pockets of increases
can be seen. Overall it’s still a profitable
business to be in, but operating in Surplus

& Surplus (E&S) lines premiums recorded
by the 15 managing service offices are up
Lines remains as challenging as ever.

9.4%. Premiums reported total $15.7 billion
(up about $1.4 billion a year prior), with 2. 2
million transactional filings logged during the
first two quarters of 2018 (5% growth over
“This is an exciting time in the E&S
market,” says Jude DiBattista, senior vice presi-
dent/head of E&S Property & Casualty at QBE

2017). Additionally, premiums among the E&S service & stamping offices have seen a 67% increase in the past seven years.

North America. “It continues to trend in a
favorable direction, and has been gaining scale
and size over the last few years. While there
has been uncertainty with the rates in the
market, there has been an increased demand
for carriers to provide solutions to complex
risks as well as demand for carriers to develop
new products to address the emerging issues
that our customers are facing.”
The E&S sector is not immune to the impact
that excess capacity has had on the greater
P&C industry. Sean McPhillips, U.S. head of
Primary Casualty at Aspen Insurance, believes
the E&S Marketplace is currently experienc-
ing a “state of frustration” when it comes to
getting rate. The cataclysmic events of Q3 and
Q4 2017, he says, “had everyone hopeful that
an overdue market correction would finally be
realized. It was the opinion of many that the
totality of losses could not be covered by rate
increases in the property segment alone.”

060-ARGO-COLONYB-8757_2018 Insurance Journal Contract P&C Print Ad_V1_9.5x3.pdf 1 9/4/18 5:12 PM

“In the Property and Casualty segment
of our market, it is largely as if the wildfires,
hurricanes and floods of 2017 did not occur,”

CONTINUED ON PAGE 6

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