Page 33 - 2016 State of the Market from AmWINS
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relatively constant, those entities are Whereas in past years, $15 million to $20 taking a cautionary position relative to dense
engaging in more construction projects million was often available from carriers in a metropolitan exposures.
as the economy has improved, providing single layer, today layers of $5 million to $10
additional opportunity for new property million are more common. “That reduction Other factors include whether state tort
business. Rates are being pushed to a is being driven by underwriters seeing cap protections are in place, and the
point where many insureds that have some claim volatility on their books and relative strength and scope of available
traditionally bought from large shared looking for creative ways to deploy limits,” governmental immunities. “Across the
limit pools are now seeking independent Frost says. country, case law is always changing, and
placements with dedicated limits. the strength of governmental immunities is
Despite strong capacity overall, underwriters continually being challenged through the
Connecting often fluid marketplace are showing growing concern about certain courts,” Frost observes.
appetites with public entity placement coverages and classes. For educational
needs remains a critical factor for success institutions, there is heightened awareness Although property and casualty markets
on the casualty side. While there have of concussive injury risk and the need to be differ, seizing opportunity in the public
been a handful of new markets entering proactive around abuse and molestation. entity space requires retail agents and
the space over the past 18 to 24 months, And, particularly with the spate of negative brokers to have a deep understanding of
traditional carrier participation remains media regarding law enforcement, liability and experience in the sector.
relatively stable. This has fostered creativity coverage in this area continues to be
in program structures and partners. problematic. “Brokers need to make sure they know
the full breadth of the marketplace,” Frost
“There are new opportunities for brokers “Among carriers that will write law says. “Particularly on towers of coverage
and buyers due to selective carriers and enforcement legal liability, there is an with multiple participants, there is a need
alternative capital sources coming into increased focus from underwriters on to address concurrency of coverage, to
the market. Additionally, we are regularly training and certification of officers as well as review excess forms in detail, and to watch
exploring non-traditional reinsurance how community policing is conducted. The for embedded exclusions.”
market participation, especially on more use of body cameras as a risk management
finite limit approaches stretched over tool is also getting a lot of attention,” Frost “We monitor appetites in the property
multiple policy periods in relatively low or says. marketplace constantly to make sure
buy-down layers for pool accounts, which we match accounts appropriately,”
effectively creates aggregate stop-loss Regional differences in underwriting McNatt says. “Different underwriters also
protection either on the front or back end of appetite for casualty continue to be tied to have different requirements in terms of
the layer,” says Brian Frost, executive vice the legal environment in the particular risk applications and data presentation. We
president and casualty broker at AmWINS location. Certain states, with plaintiff-friendly spend a lot of time on proposals and
Brokerage in Woodland Hills, California. tendencies and joint and several liability, comparisons and work to ensure data
remain challenging. “We are seeing more integrity. As a result, underwriters have
London is not as broadly aggressive in attachment point sensitivity by venue, with come to expect that level of care from us,
the public entity casualty space as they some underwriters moving their absolute which can definitely help the retail agent or
are in property. “Historically, London has minimum retention or attachment upward broker place public entity business.”
been judicious on where it participates,” in identified geographies of concern,” Frost
Frost says. “Although we are seeing some says. Additionally, many markets are also
increased interest, including the recent
development of at least one syndicated • Capacity continues to flood the property market and London is particularly
excess facility and the continued writings of aggressive in excess layers.
a major London syndicate with operations
in the U.S.” • Price reductions of up to 15 percent or more on CAT-exposed business are common.
• Carriers are willing to compete on coverage and deductibles, including for wind and
Underwriters remain keenly focused on
managing their available capacity, often earthquake.
taking a ventilated approach: splitting their • In casualty, lower primary limits are being seen as carriers look to manage capacity.
overall limit of coverage between a primary • Casualty carriers are expressing some concerns with certain coverages, classes,
and excess position, with another layer in-
between offered by a different carrier. and regions.
