The excess coverage market has shifted considerably in recent years. What was once a standard has become a tumultuous area for underwriters, with premiums increasing and coverage being withdrawn at rates previously unfelt in the market.
For those unfamiliar with the term, “excess coverage” refers to insurance offered in excess of an insured’s primary or “first dollar” insurance. In this post, the present state of the excess market will be examined, looking at its current status, what it may look like moving forward, and how the new challenges the market presents can be circumvented.
State of the Excess Market
Recently, carriers have hesitated to expand excess coverage and are instead choosing to pull back. There are numerous reasons for why this might be, but chief among them appears to be a deteriorating loss experience. As larger losses are paid out, profit margins for carriers are significantly cut, making them reconsider writing excess coverage that may have in previous years been seen as standard. This marks a significant trend in the field: juries seem to be awarding larger payouts to claimants, and as a result, carrier profits are seeing a reduction.
Markets are responding to this trend. Carriers are or will be offering less coverage with higher premiums to make up for the increased likelihood of loss. Excess liability is now rising by double-digit percentages, a remarkable fact given the single-digit increases seen last year. The primary group impacted by this is “wheels” — auto fleets, truck fleets, etc. Excess coverage has always been an issue in this category, but as carriers see increasing reticence to write excess coverage, this group will see the most change, and not for the benefit of those seeking coverage. Premiums are rising and will continue to rise, and insurers are and/or will be limiting their coverage in this area.
Conway Provides Solutions
Clearly, this rapid alteration requires a dynamic response, one that can respond as the market moves and changes. Conway does this by being at the cutting edge, monitoring the market and offering solutions as the markets allow. Conway competes head-to-head with standard markets on lead limits. The markets we access are competitive, and coverage on admitted paper is frequently possible — a contrast to others in this field who typically only offer coverage on non-admitted paper.
Conway provides competitive terms that come in excess of standard market lead limits, making Conway a natural choice when seeking coverage in this area. Additionally, as previously noted, the “wheels” market typically poses significant difficulty in terms of excess coverage. Conway can also assist in this, as Conway offers access to markets writing excess coverage in this field.
An ever-changing market can pose considerable difficulty for those seeking coverage, especially as it relates to certain fields. Conway assists in this not only by offering access to certain markets otherwise inaccessible to those seeking coverage, but also by guiding clients through the process of attaining this coverage.
If you are interested in furthering your coverage, do not be dissuaded by market difficulties. Conway can assist you during this time, ensuring you get the coverage you need. For more information, please contact Tim Morabito.