Navigating the complexities of Excess and Surplus (E&S) insurance is a vital skill for insurance professionals, especially in the current hard market with all the challenges facing standard personal lines markets. Placing risks efficiently with the right market demands a blend of expertise, market knowledge, risk management, and access to innovative tools like the Smart Choice Express Markets online platform.
Key Takeaways:
- Excess and Surplus lines insurance helps agents place coverage for clients whose risks do not fit standard admitted markets.
- A strong risk assessment and detailed submission are essential for finding the right E&S carrier quickly and efficiently.
- Building relationships with specialty underwriters and markets can improve placement success and long-term agency growth.
- E&S insurance is becoming increasingly important in today’s hard market as more accounts require flexible coverage solutions.
What is Excess and Surplus Lines?
E&S insurance covers risks that standard insurers won't or can't cover due to their unique or high-risk nature. E&S coverage is often mistaken for simply being coverage for non-standard business, but it also encompasses standard and high risk businesses exposures and specialty risks that fall outside the norm such as high-net-worth clients, coastal homeowners coverage, classic cars, and more. Placing these types of risks demands a knowledgeable approach, which can be difficult with the number of insurers available from which to choose. So how can agents do this effectively?
Why E&S Insurance Is Beneficial for Clients
When a client needs coverage and the standard market says no, E&S can keep them protected and keep the conversation moving forward. It gives agents a practical way to solve coverage problems without forcing the client into a one size fits all policy.
Access to coverage for hard to place risks
E&S markets exist to insure accounts that do not fit standard carrier appetites. That means clients can secure coverage when they have a unique operation, higher hazard exposure, or a loss history that makes placement difficult.
More flexibility to fit the risk
Non-admitted E&S policies may allow more flexibility in coverage and underwriting, which can be especially helpful when a client’s needs do not match standard policy structures.
Stronger solutions for complex exposures
Many E&S carriers are built to evaluate complex accounts with deeper risk review and more tailored solutions. This can be a better fit for clients with specialized risks that need a more customized approach.
Research and Market Identification
The Smart Choice Express Markets online platform is a game-changer that gives agents access to over 35 highly regarded insurance industry specialty companies. This platform streamlines the search for E&S markets, allowing agents to quickly identify companies willing to underwrite specific risks. The tool’s user-friendly interface and extensive database assist in finding the right markets efficiently.
Navigating Unconventional Risks in the Traditional Insurance Market: A Strategic Approach to Comprehensive Risk Assessment
Before placing a risk, a comprehensive risk assessment is vital. Analyze the client’s needs, the uniqueness of the risk, and its potential exposures. E&S markets cater to unconventional, new and emerging risks, making it essential to provide a clear and detailed risk profile to potential carriers. Being part of an agency network like Smart Choice can help agents in this regard, by giving them access to dedicated field staff who know exactly which company is a great fit for each situation.
Tailored Submissions
Craft submissions that precisely highlight the risk’s nuances, emerging risks and unique aspects. E&S markets appreciate thorough and detailed submissions, showcasing the underwriting information in a clear and comprehensive manner.
Leveraging Market Relationships
Establishing strong relationships with E&S carriers is invaluable. Having an agency network to help you obtain coverage and build rapport with underwriters can streamline the placement process, leading to quicker responses and more favorable terms.
The Role of Smart Choice Express Markets
The Smart Choice Express Markets online platform is a time-saving asset. Its database houses information on numerous E&S carriers, enabling agents to efficiently match risks with suitable markets. This platform offers convenience, accessibility, and a wider market reach for insurance services, ultimately aiding in expedited placements.
Growth in the E&S Business and its Crucial Role in a Hard Market
Since 2020, the E&S insurance sector has witnessed significant growth. According to industry reports, the E&S insurance market expanded by approximately 6.8% in 2020. This growth trend continued due to the increasing complexity of higher risks and the expanding, specific needs of businesses and individuals that fall outside standard coverage.
The steady growth in the E&S insurance sector illustrates its vital importance in catering to unique and complex risks, but also to providing coverage to clients who may now be falling outside of standard insurance coverage due to harsher underwriting guidelines during a market correction period.
Underwriting teams are biased toward the more complex risks where experience and judgment are critical to success, offering customized solutions and underwriting expertise to meet each insured's unique challenges.
As the personal lines insurance landscape evolves, mastering the art of placing E&S risks efficiently will remain a vital component of providing comprehensive coverage for clients who fall beyond the standard insurance scope of coverage.