Executives trying to predicting how the soft market will play out for the excess and surplus lines industry have absolutely no point of reference based on past experience to guide them, an E&S executive said recently.
"You have to consider that the surplus lines industry as a whole is experiencing a historic decline in premium volume," said Thomas Mulligan, president and chief executive officer of Western World Insurance Group in Franklin Lakes, N.J.
Robert Lala, senior vice president of the casualty division of Liberty International Underwriters, said that the E&S market is supposed to fill gaps when the admitted market isn't providing coverage. "So to say they're encroaching on our business is a little bit of a misnomer. They're writing different accounts than they previously did, but we have to figure out ways to work around that--to fill other gaps."
Louis Levinson, president of the E&S operations of Argo Group, said: "The E&S market generally has been more responsible than the standard markets. We jettison premium sooner, and we get back in when the time is right."
Q: What level of price changes are you seeing currently?
Mr. Levinson didn't cite actual figures, but said that rate changes, while not meaningful, have crossed from negative to positive territory.