Navigating the Rise of Excess, Surplus and Specialty Markets

Doug Witcher | March 1, 2021

Doug Witcher, CEO of Smart Choice, a network for independent insurance agents.Several years ago, we started a program called “Express Markets™” – a providential venture given the recent dramatic rise in this corner of the insurance market. As our program expanded to include more commercial lines business, it naturally led to an increased need for markets for non-standard and specialty risk coverage. We wanted to give our agency partners the ability to fully service their clientele and compete in this market space, as more agencies evolved to include higher percentages of commercial business. Today that program has grown to over $360 million in annual premium, over 35 partners, and has experienced 15 percent growth in the last year.

Over the last several years, the market has seen a dramatic uptick in Excess, Surplus and Specialty lines business as the market hardens and standard carriers continue to tighten up their product offerings and reduce risk capacity. An increase in losses and claims due to volatile weather patterns, fluctuating economic conditions (especially this past year), and standard lines carriers non-renewing accounts have all led to this increased market share. According to the Wholesale & Specialty Insurance Association’s (WSIA) annual report, total Surplus Lines premium in 2020 was $41.7 billion, a 14.9 percent increase over the previous year.*

Covid further drove this need by impacting sectors commonly known to be big utilizers of these types of specialty markets, such as construction, the service industry, healthcare, and more. Construction was affected both by project interruptions and shortage of materials because of the disruption in the supply chains. Many small businesses were brought to a grinding halt, and as they reopen must adhere to brand new rules and regulations. These new accommodations affect nearly every business owner’s liability and exposure. It has been quite a year of adjustments in every industry!

As the standard market continues to adjust to all of these outside factors, the specialty markets will almost certainly continue to grow at a fast pace. This trend can be a highly opportunistic time for Smart Choice agency partners who have access to our Express Markets search tool in the Agency Business Center.

Express Markets enables you to search for nearly any difficult to place risk and find an immediate market to fit your customers’ needs. This opportunity can really be a differentiator for independent agencies – as it offers you the ability to find solid solutions for customers in the face of a changing marketplace. The more needs you’re able to satisfy, the higher your customer retention will be!

*https://www.wsia.org/wcm/Legislative_Advocacy_Compliance___PAC/Stamping_Offices___SLAs/wcm/Legislative_Advocacy___PAC/Stamping_Offices___SLAs.aspx?hkey=c2593966-6201-4c61-bb56-c594a0788a30

The Independent Insurance Agent's Guide to Excess, Surplus and Specialty Markets

Over the last several years, the market has seen a dramatic uptick in Excess, Surplus and Specialty lines. As the standard market continues to adjust, the specialty markets will almost certainly continue to grow at a fast pace. This trend can be a highly opportunistic time for Smart Choice agency partners who have access to our Express Markets search tool in the Agency Business Center. See how this indicates a great opportunity for independent agencies in the 2021 Issue 2 of Smart Choice Magazine.

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