Specialty Insurance Blog

AIG – What Happened?

The insurance industry was rocked by the government bailout of AIG last week, to date the leading specialty lines insurer in the world. According to the U.S. Surplus Lines – Market Review by A.M. Best Research for 2008 (sponsored by NAPSLO, see here & here), AIG wrote 22.2% of surplus lines business segment in 2007. It appears the problems leading to the government action are not contained in AIG’s insurance company subsidiaries. The NAIC issued the following statement (see here): The insurance subsidiaries are solvent and able to pay their obligations. The NAIC statement went on to say: Non-insurance entities are not subject to the strict solvency framework applied to insurers. This allowed various non-insurers to engage in risky credit... Read more →

Insurance Agents E&O – Some Tips

Even in a soft market, the purchase of insurance agent’s E&O (professional liability) insurance is not always simple. Despite the soft market, the class is still fragmented and carefully underwritten (mostly). While the current financial challenges with AIG and others may have a limited impact on this market, the overall market continues to be driven by typical soft market conditions. A set of article in American Agent & Broker on insurance agents professional liability insurance coverage makes some key points: The market remains soft Shop around, but pay close attention to coverage, carrier rating and other non-price attributes Risk management & staff training are critical in preventing losses Report an incident quickly, do not sit on it One of the... Read more →

Insurance Blog

In case you have not already seen it, Laur Mazzuca Toops has a blog called Agent for Change. Great blog. eSpecialty Insurance is your specialty insurance expert. We have developed a streamlined marketplace to provide multiple proposals from a range of competitive insurers, along with expertise to help you evaluate your exposures and choose the best combination of comprehensive coverage and price. We look forward to working with you. Read more →

Financing Hurricanes

Florida’s exposure to catastrophe losses (hurricanes) and the high and rising insurance premiums have been well documented, but the blame game has started to shift away from the insurance industry (see our prior post). Driven by the high costs of insurance, Florida took over a large piece of the personal lines insurance business, deciding it could do a better job. Now reality may be sinking in as hurricanes threaten and people start doing the math. A recent Time article points out the dilemma (see here): But a series of studies have made it clear that if the Big One or even a Pretty Big One strikes, Florida is going to have very serious problems. The state-run insurance firm and the... Read more →

Directors & Officers Insurance, & Niches

Directors & officers (D&O) insurance coverage (D&O), along with most other segments of professional liability insurance, continues to be highly competitive, as pointed out in a prior post. Our conclusion, along with others, is that the professional liability insurance segment is highly competitive with the exception of a few narrow classes such as real estate services. A new study from Conning & Company (see here & here) concludes that the D&O segment is highly profitable and is a niche focus that insurers can profit from even in this soft market. The study points out the D&O market has grown significantly faster than the rate of growth in the commercial lines segment overall. Premium increases have resulted from risk management, pricing... Read more →