Softening rates in the mainstream reinsurance market have driven players to seek growth in alternative lines. Focusing on one of those lines—excess and surplus—Intelligent Insurer looks at new entrants seeking a part of the action and asks whether this market has the sustainability for increased capacity.
As market conditions remain tough within core lines of business for many reinsurers, gaining routes into new markets through strategic hires and new operations is a growing trend.
One such market that continues to gain traction is the excess and surplus (E&S) market, which is worth around $37 billion of annual written premium—predominantly in property and casualty.
“As in the rest of the world, reinsurers are seeking to replace lost reinsurance revenues with primary income. In the E&S market specifically, while corporate/national and large commercial risks have lost rate over the past 18 months, smaller commercial and personal risks have been flat to 10 percent up in rate at a time when catastrophe incidence has been very low, making the sector attractive,” says Chris Hardcastle, managing director, binding authority and facility division at Arthur J Gallagher.
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Excess & Surplus, Specialty, M&A, AM Best, AAMGA