Insurance Program Results
Industry At Large: Carriers Target MGUs To Grow Niche Business
Managing general underwriters will be in carriers’ acquisition sights during the coming months as they look to solidify and expand their foothold in specialty classes. Niche program portfolios are growing faster than the property and casualty industry as a whole as well as helping carriers secure higher operating performance ratings from agencies like A.M. Best and Standard & Poor’s. Crittenden estimates that program business alone will generate about $33.5 billion in commercial premium revenue earned this year, up from $32.3 billion in 2014. Five years ago program business accounted for only $17.5 billion in revenue. The 7.4 percent increase in program-generated commercial premium from 2013 to 2014 dramatically outpaced the 1.7 percent growth rate of commercial lines as a whole.
Crittenden expects most carriers will target MGUs with niche programs since it is more cost effective and efficient to acquire talent along with a specialty book of business than trying to grow that expertise from scratch. Insurers are also heightening their focus on underwriting each account in line with the risk since excess capital combined with low interest rates is increasing competition and softening pricing industrywide. Look for the MGUs merging with carriers to typically be firms that already have a long-standing relationship with the acquiring carrier. Carriers will also set their sights on program administrators with established relationships in specific industries as well as smaller carriers with niche books of business.
AmTrust, AIG, XL Catlin, Crum & Forster, Church Mutual and Auto Owners are among the carriers that have recently grown their specialty product offerings through acquisitions. Most of these carriers’ takeover targets were firms with which they had previously partnered with to write certain classes or books of business. AmTrust has been one of the most aggressive carriers in acquiring niche underwriters during the past few years. It gained specialization in the financial institution, hospitality, nonprofit, construction and auto dealer markets with its acquisitions of BancInsure, Sequoia Insurance, First Nonprofit Cos., Builders and Tradesmen’s Insurance Services, Oryx Insurance Brokerage, DMI Insurance Services and CorePointe Insurance. AmTrust is currently in the process of acquiring Republic Group, a regional carrier in the Southwest that writes package policies. The deal is expected to close during the first half of 2016.
Copyright © Crittenden Research Inc., November 9, 2015
CapSpecialty Privacy Response
Administered By: CapSpecialty
Distribution: MGU
| Industries: |
Financial Institutions, Healthcare Systems, Insurance Agents, Insurance Companies, Small Businesses |
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Carriers: Capitol Specialty Insurance Corp.
Coverage: Business Interruption, Cyber Liability, Media Liability, Privacy Liability/Notification Expense, Regulatory Liability
Limits: up to $10 million
Insurance Companies E&O
Administered By: CapSpecialty
Distribution: MGU
| Industries: |
Insurance Companies |
|---|
Carriers: Capitol Specialty Insurance Corp.
Coverage: Errors & Omissions (E&O)
Limits: up to $10 million
Argo Flex-XS℠
Administered By: Argo Pro
Distribution: Direct/Broker
| Industries: |
Accountants & Accounting Services, Directors & Officers (D&O), Financial Consultants/Planners, Insurance Companies, Lawyers |
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Carriers: Argonaut Insurance Co.
Coverage: Crime, Cyber Liability, Directors & Officers (D&O), Excess, Fidelity, Fiduciary Liability, Miscellaneous Professional Liability, Professional Liability, Umbrella/Excess
Limits: up to $15 Million
Employment Practices Liability
Administered By: Kinsale Insurance
Distribution: Carrier Direct
| Industries: |
Accountants & Accounting Services, Architects & Engineers (A&E), Art Galleries/Fine Art/Museums/Antique Dealers, Auto Service and Repair, Auto/Car Dealerships, Aviation Risks & Airports, Banks, Brokers/Dealers, Camps (Youth, Sports & Enrichment), Chemical Manufacturers/Distributors, Commercial Auto (Public Transportation), Construction Equipment/Machinery/Materials, Educational Risks (School Administrators), Energy Companies, Film Risks, Gas Stations, Hospitality (Hotels/Motels), Insurance Agents, Insurance Companies, Investment Advisers, Lawyers, Logging/Lumber/Forestry Risks, Manufacturers (Hardware), Manufacturers/Manufacturing Risks, Mine/Mining Risks, Miscellaneous Risks, Museums, Nonprofit Organizations, Real Estate Agent/Broker, Research/Research Organizations (Clinical, Etc.), Restaurants, Retail, Social Services, Utility Companies |
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Carriers: Kinsale Insurance Co.
Coverage: Bodily/Personal Injury, Employment Practices Liability (EPL)
Limits: up to $5 million/$5 million (Primary Limits)
Financial Institutions/Services
Administered By: Arch Insurance Group
Distribution: Direct/Broker
| Industries: |
Asset Management Firms, Banks, Financial Institutions, Insurance Companies, Investment Advisers |
|---|
Carriers: Arch Insurance Co., Arch Specialty Insurance Co.
Coverage: Bond, Directors & Officers (D&O), Errors & Omissions (E&O), Fidelity, Fiduciary Liability, Network Security Liability, Professional Liability, Side A D&O
Limits: up to $25 million (Per Risk)
Insurance Companies Professional Liability
Administered By: XL Catlin (Formerly Catlin)
Distribution: Direct/Broker
| Industries: |
Directors & Officers (D&O), Insurance Companies |
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Carriers: Catlin Syndicate 2003, Lloyd's of London
Coverage: Directors & Officers (D&O), Employment Practices Liability (EPL), Excess, Fidelity, Fiduciary Liability, Professional Liability, Umbrella/Excess
Limits: up to $10 Million (Professional Liability )
NAMIC Professional Liability & D&O
Administered By: NAMIC
Distribution: MGA
| Industries: |
Directors & Officers (D&O), Insurance Companies |
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Carriers: NAMIC Insurance Co., National Specialty Insurance Co., State National Insurance Co., United Specialty Insurance Co.
Coverage: Directors & Officers (D&O), Employment Practices Liability (EPL), Fiduciary Liability, Professional Liability
Limits: up to - $15 million
Privacy // 403 SRVS
Administered By: Allied World
Distribution: Direct/Broker
| Industries: |
Distribution Risks, Financial Institutions, Healthcare Systems, Insurance Agents, Insurance Companies, Lawyers, Manufacturers/Manufacturing Risks |
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Carriers: Allied World Assurance Co.
Coverage: Cyber Liability, Data Security, Privacy Liability/Notification Expense
Limits: up to $25 million (Primary & Excess)
Professional Risk-Transfer Organizations
Administered By: Allied World
Distribution: Direct/Broker
| Industries: |
Insurance Companies |
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Carriers: Allied World Assurance Co.
Coverage: Cyber Liability, Data Security, Directors & Officers (D&O), Employment Practices Liability (EPL), Errors & Omissions (E&O), Privacy Liability/Notification Expense
Limits: up to $15 million (Third-Party EPL Sub-Limit), up to $1 million (First-Party Network Security), up to $250,000 (Derivative Demand Sub-Limit), up to $15 million (Primary & Excess), up to $25,000 (Governmental Claims Sub-Limit)
ACE Advantage® Insurance Company Professional Liability
Administered By: Chubb Ltd. (Formerly ACE Group)
Distribution: Carrier Direct
| Industries: |
Insurance Companies |
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Carriers: ACE Group
Coverage: Excess, Fiduciary Liability, Umbrella/Excess
Limits: up to $25 million (Limits vary by risk)
Financial Institutions
Administered By: Everest Specialty Underwriters
Distribution: Direct/Broker
| Industries: |
Asset Management Firms, Banks, Brokers/Dealers, Financial Institutions, Financial Institutions (Private Equity), Insurance Agents, Insurance Companies |
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Carriers: Everest National Insurance Co.
Coverage: Bond, Directors & Officers (D&O), Employment Practices Liability (EPL), Errors & Omissions (E&O), Fiduciary Liability, Professional Liability, Side A D&O
Limits:
Financial Institutions
Administered By: Endurance
Distribution: Carrier Direct
| Industries: |
Asset Management Firms, Banks, Financial Institutions, Financial Institutions (Private Equity), Insurance Companies, Investment Advisers, Private Companies, Public Companies , Real Estate Investment Trusts (REITs) |
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Carriers: Endurance Specialty Holdings Ltd.
Coverage: Crime, Directors & Officers (D&O), Employment Practices Liability (EPL), Excess, Fidelity, Fiduciary Liability, Professional Liability, Side A D&O, Umbrella/Excess
Limits: up to $25 million (Primary or Excess )
Financial Institutions
Administered By: Zurich
Distribution: Carrier Direct
| Industries: |
Asset Management Firms, Banks, Financial Institutions, Insurance Agents, Insurance Companies, Investment Advisers, Real Estate Investment Trusts (REITs) |
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Carriers: Zurich
Coverage: Bond, Commercial Auto, Commercial Property, Crime, Directors & Officers (D&O), Employment Practices Liability (EPL), Excess, Fidelity, Fiduciary Liability, General Liability, Management Liability, Network Security Liability, Professional Liability, Umbrella/Excess, Workers' Compensation
Limits:
Financial Services
Administered By: OneBeacon Insurance Group
Distribution: Carrier Direct
| Industries: |
Asset Management Firms, Banks, Brokers/Dealers, Financial Institutions, Insurance Companies, Investment Advisers |
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Carriers: Atlantic Specialty Insurance Co., Homeland Insurance Co. of Delaware, Homeland Insurance Co. of New York, OBI National Insurance Co., OneBeacon Insurance Co.
Coverage: Commercial Property, Cyber Liability, Directors & Officers (D&O), Employment Practices Liability (EPL), Errors & Omissions (E&O), Excess, General Liability, Management Liability, Professional Liability, Umbrella/Excess, Workers' Compensation
Limits:
Multiple-Insured Captive Reinsurance Alternative
Administered By: Chubb Ltd. (Formerly ACE Group)
Distribution: Carrier Direct
| Industries: |
Captive Agents, Insurance Companies |
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Carriers: ACE Group
Coverage: Excess, Risk Management, Umbrella/Excess
Limits: up to $5 million (General and automobile liability)
Financial Institutions Management Liability
Administered By: QBE North America
Distribution: Direct/Broker
| Industries: |
Asset Management Firms, Banks, Financial Institutions, Financial Institutions (Private Equity), Insurance Companies, Real Estate Investment Trusts (REITs) |
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Carriers: QBE Insurance Corp.
Coverage: Employment Practices Liability (EPL), Fiduciary Liability, Management Liability, Professional Liability, Side A D&O
Limits: up to $25 million (Per Risk - Financial Institution Bonds), up to $25 million (Per Risk - side-A D&O), up to $10 million (Per Risk All Lines)
Miscellaneous E&O Coverage
Administered By: JLT Facilities, Inc
Distribution: Program Administrator
| Industries: |
Accountants & Accounting Services, Architects & Engineers (A&E), Artisan & Trade Contractors, Banks, Brokers/Dealers, Data Processing & Management, Insurance Companies, Real Estate Agent/Broker, Real Estate Appraiser, Title/Escrow Agents |
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Carriers: Beazley Insurance Co. Inc.
Coverage: Crime, General Liability, Management Liability, Professional Liability
Limits: up to $5 Million
Professional and Management Liability Coverage
Administered By: Cove Programs Insurance Services
Distribution: Program Administrator
| Industries: |
Insurance Agents, Insurance Companies, Manufacturers/Manufacturing Risks, Private Companies, Public Companies , Public Entities, Small Businesses, Technology Risks |
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Carriers: Lloyd's of London
Coverage: Broker's Legal Liability, Cyber Liability, D&O: Miscellaneous , Directors & Officers (D&O), E&O, Errors & Omissions (E&O), Professional Liability
Limits: up to $5 Million