Dynamic E&S market

It’s extremely important. With the world getting riskier by the day, the industry requires creativity in a number of areas, but specifically in critical coverage areas such as pandemic, cyber, and wildfire, to name a few. That especially holds true for the E&S market, where we are looking to create bespoke solutions for clients’ risk management needs. That’s being creative with respect to terms and conditions, program structures, risk appetite, and bringing creativity with the launch of new products. Even more critical is the value proposition that the E&S market brings to brokers. Creativity becomes even more important as demand grows.

We see a market poised for substantial growth across all product lines, bolstered by the launch of new products and also enhancing some of our existing products. We believe in the coming years there will be even stronger growth in the specialty insurance solutions than we’ll find in the more traditional standard insurance markets. The trends that we see related to such critical issues around climate change and liability, as well as the need for our clients to manage those difficult risks, are much stronger than they are when compared to more standard risk.

The ever‑changing market conditions have created several emerging and challenging risks for our industry. Most notable is inflation, especially social inflation. We’re certainly seeing a trend of rising claims and insurance costs that are tied to increased litigation, along with extremely friendly judgments in favor of plaintiffs and nuclear jury awards. I would say cyber is top-of-mind as it relates to products. Cyber is candidly a very young business that lacks robust data. If you think about it, as an industry, we’ve been modeling property and casualty risk for hundreds of years. In comparison, we have such a relatively small amount of data for cyber. We also need to think about climate change and the repercussions of how the climate crisis directly affects insurance and reinsurance industries. When we think about the loss potentials from natural disasters, such as storms, floods, and wildfires, we see them increasing at such alarming rates, due in large part to climate change.

It’s all about a focused distribution approach. We refer to that as our select broker strategy. We have an outstanding team of broker relationship leaders who manage each of these select relationships. We engage with our valued brokers from the executive level to the producer marketing level, and everywhere in between. In addition to quarterly business reviews, we are in continual contact with our brokers. Broker engagement is a strategic pillar for us as we aspire to be a top E&S market. Our mission is to create a preferred-broker experience and a level of engagement that will differentiate us in the marketplace.

This article was produced by AM Best Company in collaboration with Munich Re Specialty Insurance.

About Munich Re Specialty Insurance

Munich Re Specialty Insurance (MRSI) is a description for the insurance business operations of affiliated companies in the Munich Re Group that share a common directive to offer and deliver specialty property and casualty insurance products and services in North America.

For more information on MRSI, including licensing, regulatory-required, and other information on the operating companies, please click here.