Page 32 - 2016 State of the Market from AmWINS

32 | Am3W0 IN| SASmtaWteINoSf SthteatMe oafrktehte Market The public entity sector presents a different
picture between property and casualty
INDUSTRIES markets. In property, with a relatively fixed
number of public entity clients limiting demand
PUBLIC ENTITY and continued expansion of insurance
capacity, rates continue to trend downward
Strong property appetite, cautious approach to casualty and terms are broadening. On the casualty
seen in public entity market trends side, growing underwriting concerns and
market fluidity demand that brokers monitor
the market carefully to achieve success.

PROPERTY

Strong capacity on the property side
continues to favor buyers. “There is an
absolute abundance of capacity putting
pressure on terms, conditions, and
deductibles,” says Jeff McNatt, executive vice
president and property broker at AmWINS
Brokerage in Satellite Beach, Florida.

Capacity is coming from traditional domestic
markets, alternative capital, and a growing
appetite from London syndicates. “London has
been aggressive, particularly in excess layers
that they haven’t historically targeted. They are
utilizing their capacity in different ways to target
municipal property business,” McNatt says.

In the CAT market, price reductions of up to
15 percent are common. That level isn’t seen
on the non-CAT side simply because rates
remain so low that deep discounts aren’t readily
available. Insurers also remain willing to broaden
terms for both CAT and non-CAT properties.
“For CAT-prone areas, the biggest change
is a reduction of the percentage deductibles
for wind and earthquake. We are even seeing
caps on deductibles becoming more readily
available,” McNatt reports.

Price decreases present premium growth
obstacles for agents, with another challenge
involving the nature of the insurance-buying
process. “The bid process for public entities
tends to be long, and in some states clients
are shopping aggressively every year,” says
McNatt, although he adds that many buyers
remain loyal to companies that make a good-
faith effort to match low-price offers.

However, there are some areas where agents
and brokers can achieve revenue growth.
Although the number of public entities is