Robert Sargent
President and CEO, Tennant Risk Services West Hartford,Conn.
NAPSLO Immediate Past President

From my perspective, the long term challenges to the E&Sindustry come in three areas–regulatory, technology and people.

Regulatory changes and challenges that impact the E&Sinsurance market are constant, and we are fortunate to have anextremely talented trade association staff at NAPSLO. NAPSLOcontinues to effectively address the regulatory changes on both astate and federal level. NAPSLO's staff are experts in this areaand have done a fantastic job representing the industry and itsclients. The key is a fair and efficient E&S marketplace thatprovides the insurance solutions that our clients require whilemaintaining a strong solvency record. NAPSLO has worked withregulators and other industry groups to achieve this, and continuesto do so.

Technology continues to transform all aspects of our life andour business. The E&S industry's challenge is toincorporate technology in a way that supports the risk assessmentand distribution expertise that is the core of the E&Sinsurance business and critical to our clients. The E&Sbusiness is creative and embraces new ideas, and I have no doubtthat the industry will embrace technology in a way that providesthe greatest benefit to our clients.

We have all heard that the E&S insurance business needs asteady flow of really good people, but our long-term personnelchallenges go beyond this objective. Beyond attractingtalented individuals, we must also train them. In addition toteaching the technical skills we require, we must also impart ourculture of excellence, innovation and entrepreneurship.

The E&S insurance industry's biggest opportunity is tocontinue to do what we do so well: meeting the complex andunique insurance needs of our clients with creativity andexpertise. The expertise and experience in both theunderwriting and broker ranks provides a level of creativity thatis very powerful, and provides a significant benefit to our retailbrokers and their clients. The members of the E&Sinsurance industry are experts at solving our clients'difficult coverage challenges.

I see this every day in my segment of the business, professionalliability. Cyber Risk insurance is currently the most visibleexample, but there are many others. EPL started in ourbusiness, and increased employment litigation is driving manyD&O and EPL accounts back to the E&S insurance market wherethere are a variety of competitive and customized alternatives.

The E&S industry thrives on these changes, and provides acreative and competitive environment for solutions.

Hank Haldeman
Executive Vice President, The Sullivan Group, LosAngeles
NAPSLO Secretary

The market goes up and down, and right now the market seems tobe slowly trending in a favorable direction for wholesalers—whohave an opportunity to better communicate and establish the valuethat they bring to transactions. There's room for retailers to moreclearly understand how they can marshal the expertise ofwholesalers to better service their clients. It's incumbent uponprofessionals in the wholesale distribution system to activelydemonstrate the value that their market access brings to theprocess.

It's important for the industry to continue to evolve and bringnew products to market; that's a challenge because of theever-increasing speed with which that needs to happen.

Gilbert C. Hine Jr., CPCU, CFP
President, McClelland & Hine Inc., San Antonio,Texas
NAPSLO Treasurer

Within a time horizon of the next 12 months at the enterpriselevel the challenge will be to maintain service and underwritingperformance levels as premium volume and policy counts increase atdouble-digit rates. This will be especially critical in managingincreased staff and the effective integration of new hires.

Over the longer term, the effective management of theever-increasing volumes and sophistication of analytical risk leveldata will be an enormous challenge for our industry. The ability totimely collect, analyze and distribute critical information to theappropriate decision-makers within our organizations anddistribution systems and to have them be able to properly interpretand use the data will continue to require significant investmentsin both information systems and education.

In terms of opportunities, I believe one of the greatestopportunities for our industry and for our country is theincredible revolution in the energy industry. The enormous depositsof natural gas and oil that can now be accessed with new frackingdrilling technologies has and will continue to reverberate acrossall sectors of our economy. Within major drilling areas such as theEagle Ford Shale formations south of San Antonio, we have seenenormous increase in economic activity. Driving south of SanAntonio you can't pass a truck stop that isn't full of tractortrailer rigs or new motels and restaurants with full parking lots.A robust economy is the best opportunity for growing ourbusinesses.