Striving for growth

Soft market conditions and a swell of new capital have forced property and casualty (P&C) insurers to evaluate their growth prospects, seeking diversification into new lines and regions.

Attracted to the short-tail nature of property insurance, which offers flexibility and quick results, the new capital has possibly driven insurers in the US to re-evaluate their property books, seeking potential further growth in other lines.

Michael Sillat, CEO and president, WKFC Underwriting Managers, a series of RSG Underwriting Mangers, says that over the last three years, the company has focused on increasing business in casualty and professional liability lines.

“We realised about three years ago that the property sector would be the line that this capital would engage in, given its short-tailed nature,” Sillat says. “At the time, our property book was over 80 percent of our total book volume, so we started the process of diversifying.

“Today we have 15 active business lines, compared with four, three years ago. While property still represents 65 percent of the book, it’s substituted with casualty and professional liability products, as well as bolt-on property products.

“The need to make our business model more efficient has also resulted in the establishment of a new WKFC back office operation in Shanghai, China. The operation gives underwriters 24-hour access to gain clearance or work on accounts.”

Like all insurers, WKFC is not immune to the wave of consolidation that is sweeping the market, but Sillat explains that for WKFC, being part of the RSG umbrella means that it has a very strong backbone.

“Despite new competition, we can still achieve growth, which is an integral part of the company’s corporate strategy.

“WKFC is one of 14 managing general agents (MGAs), which are part of RSG-Underwriting Managers (RSGUM), and within that entity, we look at any and all MGAs and managing general underwriters (MGUs) that display potential and could possibly be a good fit for the RSG group,” he says.

The digital age

The need for growth today has increased emphasis on technology and the ability to keep pace with competition.

“We have invested heavily in technology in the last 24 months and today, we have developed and implemented an underwriting work station and web platform that allows our underwriters to become extremely efficient, allowing them access to more business opportunities,” Sillat explains.

“Everything is transacted electronically, and the clients who resisted it initially now all but demand it.”

For P&C insurers in the US, there is no doubt that times are becoming harder and innovation and adaptation are key to survival.

Sillat says that insurers are being met with new competitors that may look at the business and its exposures differently, so staying profitable in a declining market is their main challenge.

He adds that consolidation and keeping up with the changing distribution landscape are also key factors that WKFC is constantly looking at and evaluating.

While WKFC is an MGA, not an insurer, Sillat says the company feels the same strains and concerns as the insurers it serves.

“While we don’t take the risk an insurance company does we do everything an insurer does and as a result, the impact is the same for us as it is for any P&C insurer,” he says.

Michael Sillat is CEO and president at WKFC Underwriting Managers. He can be contacted at: msillat@wkfc.com.