Engineering the future of E&S with data, AI and expertise

AM Specialty CEO Shevawn Barder explains how AI, real-time data and underwriting expertise can help E&S carriers respond to an increasingly complex risk landscape.

Key points:
E&S lines now going mainstream
Changing risk landscape drives change
Transformation to precision underwriting

By Shevawn Barder, founder and CEO of AM Specialty Insurance Group

“E&S is increasingly a market of first choice, where brokers and clients turn for the expertise, flexibility and speed needed to address more complex risks.”

For decades, the excess and surplus lines market was defined largely by what it was not. It was the market for risks that did not fit neatly within the parameters of traditional insurance – the difficult, unusual or distressed exposures that standard carriers were unwilling or unable to accommodate.

That description no longer captures the market.

Today, E&S is increasingly a market of first choice: a place where brokers and clients turn not simply because conventional capacity is unavailable, but because specialty markets can offer the expertise, flexibility and speed required to address risks that are becoming more complex.

That evolution has important implications. As E&S moves closer to the center of the insurance ecosystem, competitive advantage will increasingly depend on the ability to make better underwriting decisions, faster and with greater precision.

The next generation of specialty carriers will be defined not by technology or underwriting expertise alone, but by the ability to bring the two together. 

Complexity outpaces tradition

The risks businesses face are changing fast. Technology is creating new exposures and changing existing ones. Supply chains remain interconnected and vulnerable. Climate and catastrophe patterns are challenging historical assumptions. Litigation trends and social inflation can rapidly alter loss expectations. 

At the same time, brokers and insureds increasingly expect faster answers and greater certainty.

This creates a fundamental challenge for insurers. Historical data remains valuable, but history alone is becoming a less reliable guide to the future. 

Specialty insurance has an inherent advantage because it has always relied on judgment. Experienced underwriters know that the most important information about a risk does not always fit into a predefined field or model. But expertise can now be augmented by capabilities that previous generations of underwriters did not have.

The opportunity is not to automate underwriting judgment. It is to make that judgment more informed, more consistent and more powerful.

Building a precision carrier

The carriers best positioned for the next phase of the E&S market will combine five capabilities: expert underwriters, AI-enabled insights, real-time data, flexible capacity and portfolio intelligence.

Expert underwriting remains the foundation. Specialty insurance ultimately depends on understanding individual risks and recognizing nuances that standardized approaches can miss. Experienced underwriters bring context, pattern recognition, commercial judgment and an understanding of how risks behave.

AI can dramatically expand the information available to those underwriters. It can help organize complex submissions, identify relevant signals across large datasets, surface anomalies and patterns, and give underwriting teams more time to concentrate on decisions.

Real-time data can make risk assessment more dynamic. Instead of relying primarily on information captured at submission or renewal, carriers increasingly have the opportunity to incorporate external and continuously changing information into underwriting and portfolio management. 

Flexible capacity allows insight to translate into action. E&S has always benefited from freedom of form and rate and the ability to respond creatively to difficult risks. Pairing that flexibility with better information can enable carriers to deploy capacity more deliberately.

Finally, portfolio intelligence connects individual underwriting decisions to the performance of the entire book. A risk can be attractive in isolation and less attractive when viewed alongside concentrations, correlations and aggregate exposures elsewhere in a portfolio. 

Together, these capabilities create something more powerful than a digitized version of traditional underwriting. They create the foundation for precision underwriting.

Transformation to precision underwriting

Much of the industry's technology conversation over the past decade has focused on digital transformation. That work has been important. Faster workflows, better connectivity and more efficient processes all matter.

But efficiency should not be confused with underwriting advantage. Processing a submission faster is valuable. Understanding that submission better is transformative.

AI should not become a substitute for experienced underwriters. It should help them see more. Data should not dictate decisions. It should give underwriters stronger evidence on which to base them.

The objective is therefore not underwriting without underwriters. It is underwriting in which human expertise is amplified by better information.

The E&S market has earned its growing relevance because it is designed to respond to change. The challenge now is to ensure that the infrastructure supporting specialty underwriting evolves as quickly as the risks themselves. At Am Specialty Insurance Company, that means investing simultaneously in technology, analytics and underwriting talent.

Shevawn Barder can be reached at: shevawn.barder@amspecialty.com

For more news from Monte Carlo Today, click here.

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.