It wasn't all that long ago that E&S insurers didn't need to look for business; with standard companies reeling from losses and reduced capacity, it came to them. Indeed, from 1994 to 2004, the E&S market grew remarkably, to $33 billion in premium from $9.1 billion. In that time span, its share of the commercial-lines marketplace more than doubled, to 14.14% from 6.43%.

Today, however, the E&S marketplace operates in a changed environment. The standard markets, flush with capital and coming off record years in terms of profitability, are competing aggressively for business they once shunned. Last fall, A.M. Best released figures showing that E&S insurers barely grew at all in 2005, increasing their volume only by about $270 million. Meanwhile, their share of the commercial-lines marketplace slipped to 12.65%.
E&S insurers, and the MGAs and surplus-lines brokers that distribute their products, have changed their tactics to fit the new marketplace. Rates are coming down in acknowledgment of competitive realities–but only so far, they say. Both carriers and distributors appear to be making greater use of admitted paper. And while returning to their core market–difficult risks that standard insurers aren't prepared to underwrite–E&S insurers are looking for opportunities to expand that market. Catastrophe-prone property insurance also continues to look like a market that E&S carriers are likely to have more or less to themselves. Above all, the players in the E&S market are ramping up their marketing activities. Growth is still the mantra; and since they can't count on business coming to them the way it did in the hard market, they're going out looking for it.
Here are how six members of the American Association of Managing General Agents and the National Association of Professional Surplus Lines Offices view today's market. Their comments are followed by the perspectives of three E&S insurance company executives.
William Newton
Lemac & Associates
In the West, E&S insurers continue to express a desire for more business, according to William Newton, although rates are down significantly for most lines–other than earthquake insurance.
Newton is the president and CEO of Lemac & Associates, in Los Angeles, and the current president of the National Association of Professional Surplus Lines Offices. The wholesale broker writes most of its business in California but also is active in Arizona, Nevada and Hawaii. “We do a little bit of everything,” Newton said. Our biggest product line would be casualty.” Lemac & Associates writes a significant amount of workers compensation insurance, which must be placed with admitted markets. The great majority of its property, casualty and professional liability insurance, however, is written by E&S insurers. Specific classes include contractors, products liability, and bars and taverns. Also, about half of the wholesaler's umbrella business is written on a nonadmitted basis. On all such business, rates have been coming down, Newton said. Casualty rates, for example, have dropped from 10% to 25%, depending on business class.
The main exception to the trend is earthquake insurance, Newton said, which this past year was in a state of crisis. “Six to nine months ago it was very, very difficult to find needed capacity at any price,” he said, but now rates appear to be stabilizing, although not dropping. This is welcome news, Newton said, because Lemac & Associates writes quite a bit of earthquake coverage.
When rates get too high, a “backlash” develops and property owners just stop buying earthquake insurance, Newton said. “Unfortunately, when they stop buying, often they do not ever come back into the market and we lose them forever as a customer.”
Such customers initially bought the coverage because they could afford it or because a bank required it, Newton said. But when prices get too high, he said, those who have the option to drop it often do–sometimes even if they have mortgages. The bank may drop the earthquake-coverage requirement, or the property owner may find another bank that will.
Scott Anderson, CIW
Concorde General Agency
With the market softening, Scott Anderson says he does not expect his agency's E&S business to grow much, if at all, in 2007.
“I'd be happy to stay flat,” said Anderson, who is executive vice president of Concorde General Agency, in Fargo, N.D., and the current president of the American Association of Managing General Agents. He added that while policy count may go up, pressure on rates likely will keep a lid on volume.
Concorde General Agency does business mainly in the Dakotas, Minnesota, Iowa, Montana and Idaho, said Anderson, while Wyoming and Colorado “are opening up.” The largest part of the agency's business is specialty personal lines, he said: “Log homes to mobile homes,” as well as coverage for motorcycles, snowmobiles, personal watercraft, etc.
Roughly 35% of Concorde's business is nonadmitted. Anderson said the agency turns to the E&S markets to obtain coverage for such risks as artisan contractors, bars and taverns, vacant buildings, and some agriculture-related and manufacturing business. He said the agency currently is not pursuing “gray area” accounts like restaurants, because the standard markets once again are showing interest in them.
Anderson said the agency has met with both London and domestic markets since the beginning of the year, and they all are expressing concern about the downward pressure on rates brought on by the increased competition from standard insurers. Nevertheless, Anderson said, the expectation very much is for growth.
Anderson said he hasn't seen any indication that E&S carriers are broadening coverage to better compete. Rather, he said, the carriers and Concorde jointly are looking for opportunities in the market where they can use underwriting expertise to excel. “Can we find something additional?” is the message he's hearing, Anderson said.
Preston Gough
CRC Insurance Services
d/b/a Southern Cross Underwriters
Preston Gough is executive vice president of CRC Insurance Services Inc., d/b/a Southern Cross Underwriters, and a former president of AAMGA. Southern Cross Underwriters has 13 offices, primarily along the Eastern Seaboard and in the Southeast, including Gough's office in Jackson, Miss.
Gough said the Jackson office is not highly specialized, but rather writes traditional MGA business, including commercial property and casualty, most of which is nonadmitted; transportation; and some personal lines.
At the time we spoke, Gough was preparing to leave for London, where he was to meet with Lloyd's syndicates participating in a contract covering coastal property located from Maryland to Florida and west to Alabama. Business placed under the contract, which is up for renewal in April, primarily consists of coverage for condominium owners and some homeowners, Gough said. Because of hurricanes in 2004 and 2005, rates for such business increased last year by roughly 50% to 100%, depending on location, Gough said, and deductibles increased too. This year, he said, he hoped that the mild 2006 hurricane season would persuade underwriters to hold rates steady. Last year, Southern Cross Underwriters' aggregate limits–the maximum amount of business it could write in the various territories in which it does business–were reduced. With more capacity in the marketplace, Gough said he was hopeful those limits would increase this year.
In the Jackson area, Gough said that the casualty market continues to soften. Among other things, this seems to reflect a desire by insurers in the state to compensate for their greatly reduced property writings, he said.
As a result, much casualty business that Southern Cross Underwriters placed with E&S carriers for the last three years is now returning to the standard markets.
“We heard of a standard carrier that is getting into the trucking business, which is kind of scary,” Gough said. “In my opinion, they don't really understand that particular market, but it gives them a quick way to have an infusion of cash flow.”
Gough said that in an effort to retain good casualty business, his E&S markets will drop their pricing by 5% to 10%, but they continue to stress underwriting discipline and say they will not compete aggressively. “They're not willing to get down in the trenches and write business where they don't think they can make a profit,” he said.
Certain types of accounts–e.g., contractors–just seem to alternate between E&S and standard insurers, depending on the state of the market, Gough said. “I tell my underwriters, 'Wait two or three more years and we'll see that same account again.'”
In regard to commercial property, Gough said most carriers are freely writing coastal business–but without wind coverage. Rather, most businesses must turn to the state “wind pool,” which Gough said will provide up to $1 million of coverage but no business interruption insurance. It's not easy to get anything more, Gough said, adding that he has just one E&S carrier that will write excess property coverage (including for wind) above the wind pool's $1 million limit, as well as BI. He said he hoped to find additional markets for such business while in London.
Gough said he didn't expect Southern Cross Underwriters' use of the E&S markets to change much in the year ahead. He said loyalty counts for a lot when the market starts to soften. “There's nothing any individual wholesaler can do about it,” he said. “My advice to everybody is try to do business with the carriers that have been there….What we dread most is new players coming into the marketplace with no underwriting discipline.”
Gough said Southern Cross Underwriters set a production record in 2006 and thinks, with hard work, it can eclipse it in 2007. “It's going out and finding pockets of business that we haven't had before,” he said. “And we've got a very aggressive staff that will go out and call on our retail agents…. Everybody's got the same pricing mechanisms to work with. Whoever provides the best service will probably get the best business.”
Kurt Bingeman, CPCU, ASLI, RPLU, CIW
Russell Bond & Co. Inc., CMGA
For Russell Bond & Co., success in 2007 will be a matter of writing more policies, although at perhaps lower premium, and building business outside of the firm's core territory, according to Kurt Bingeman, president.
Bingeman, a past president of NAPSLO, said Russell Bond is shooting for 10% growth in premium this year. “Last year our premium growth was only 5%, but our policy count was up 10%,” he said. “So the pricing may be slipping, but we're writing more accounts, which helps.”
One way the firm plans to meet its goals is by developing relationships with retailers in states like Connecticut, Vermont and Massachusetts, where it expanded in recent years from its traditional base in New York, New Jersey and Pennsylvania. Bingeman said that only a few of the firm's markets initially followed it into the new states, but more have since come on board, which bodes well for its effort to write more business in 2007.
Professional liability insurance has been Russell Bond's traditional specialty, Bingeman said, and still accounts for about 30% of its business. But he said the fastest-growing segments of its business are transportation and workers comp.
Historically, Russell Bond has written roughly 40% of its business on admitted paper, Bingeman said, adding that the figure could rise by a few percentage points in 2007 because of the growth in the transportation and workers comp business. Furthermore, traditional E&S insurers are making greater use of admitted paper, he said, in an apparent effort to hold on to more business in a softening market.
“We're pretty excited that we have both those options (admitted and nonadmitted paper) in a good part of our territory,” he said.
Bingeman said he doesn't foresee a major change in how Russell Bond will use the E&S markets this year.
“I think our biggest issue is with the binding-authority-type business,” he said. “A lot of that business has moved back to the standard markets. And our number of submissions for that type of business has dropped.”
Bingeman has noticed that his loss ratios with some E&S markets have been creeping up. “That's because prices have come down some, but the losses sure haven't changed,” he said. “It's something I watch carefully, because we do have profit-sharing opportunities with those markets.”
One place Bingeman has seen more competition from standard insurers is in the contractors market, although such carriers mainly are focusing on artisan contractors and subcontractors, rather than on general contractors. Standard carriers also are aggressive in the D&O market, even for clients that have experienced losses or that work in riskier specialties. “We've seen people competing on accounts that are not actually choice,” he said.
Most E&S companies have been making modest changes to their programs to hang on to business, Bingeman said. “There's been some rate flexibility,” he said. “They've brought back some endorsements that maybe they didn't offer before,” One example, he said, is more flexibility in regard to coverage for additional insureds.
Bingeman said one concern he has in 2007 is whether New York Gov. Eliot Spitzer and Connecticut Insurance Commissioner Richard Blumenthal will continue to push for the elimination of contingent commissions in their respective states. “We have contingency agreements with markets where we have binding authorities,” he said, and, as for a retail agency, contingent commissions are important to the firm.
With the industry posting great results in 2006, Bingeman said the marketplace undoubtedly will get softer in 2007. “Everyone will get more aggressive and try to write more business,” he said. “We don't intend to roll back. We intend to grow, but it's going to mean writing a lot more accounts.”
Mark Gold
Princeton Risk Managers
MGAs and wholesale brokers face a tough market these days, according to Mark Gold. “We're struggling more and more to hold on to renewals, just because the standard markets are writing accounts that they weren't writing last year,” he said.
Gold is president of Princeton Risk Managers, in Princeton, N.J., which does business in about a dozen Northeastern states and soon will be licensed in Florida. Gold said the wholesale broker is best known for medical malpractice insurance, including for allied-health risks, and for providing coverage for social services; but it also offers property, products liability and general liability insurance. About 85% of its business is nonadmitted.
Gold said he has been surprised to see standard carriers take on some products liability accounts that long had been forced to find coverage in the E&S marketplace. “But real estate has been where we've been taking the biggest hit,” he added.
Gold said his E&S insurers are not idly sitting by, however. They are constantly offering additional products or enhancements, he said, such as combined general liability and professional liability insurance, and risk-management services in connection with lawyers professional liability insurance. They also are writing excess coverage over certain lines or classes that they didn't before, he added, and showing interest in more classes for professional liability insurance.
In this environment, MGAs and wholesalers need more than ever to stay on top of what their markets are doing, Gold said. The insurers themselves are making an effort to get the word out, he said. At the time he was contacted, Gold said representatives from four E&S insurers had been in to see him in the previous week. Insurers also are putting more product information on their Web sites and into their brochures, he said. Gold said he also scans the trade press for information about markets, and speaks with competitors at gatherings sponsored by such groups as NAPSLO and the New Jersey Surplus Lines Association.
Besides giving him updates on products they are offering, visiting reps are asking what they can do to get more business from his firm, Gold said. He said he replies that he needs flexibility and quick response time. “Sometimes we're going to have to get a reduction in rates,” he added, “anything we can do to get the account bound.”
Gold said he sees a lot of capacity in the market, leading him to believe this soft market will stick around for quite a while. In response, Gold said he is looking for new products to sell. “Right now, we are looking at possibly expanding into personal lines,” he said, “maybe high-risk homeowners … on the coasts. Nothing is carved in stone yet, but I'm speaking with certain carriers about that.” He added that he was referring to coastal property in the Northeast, not in Florida, where he may soon be expanding.
Also, just as E&S brokers are calling on him more often, Gold is encouraging his brokers “to pound the pavement and see retail brokers.” He added, however, that he doesn't try to compete with standard markets for an account. “I always tell my retail brokers, 'If your standard markets are writing it, or it's done through some sort of program, by all means, just keep it there.'”
Meanwhile, Gold said the E&S market is still the place to put such risks as lawyers, doctors and other professionals who have problematic claims histories or practice in high-risk specialties, like securities or obstetrics.
Gold said he has bought a document management system and has assigned specific territories to his New York and New Jersey offices. He also plans to open an office in Philadelphia. Gold said he is taking these steps and others to improve the level of service he can offer to retail agents and brokers.
“I think we can actually grow in this soft market,” Gold said. “It's just a matter of working harder. The business is out there, but now we've got to shake the trees to find it.”
Fred Steves
Myron F. Steves & Co.
As he considers the E&S marketplace in 2007, Fred Steves describes it as soft and very competitive, with standard companies broadening their appetite. E&S agents and companies realize they're going to have to write more policies to grow or even maintain premium volume, he said, but that already was the case in 2006.
Steves is a managing partner of Myron F. Steves & Co. and a past president of AAMGA. The agency writes in excess of $200 million in premium, Steves said, about 60% of which is nonadmitted. It does business mainly in Texas, although it has some programs that it operates regionally or nationally.
Steves said the agency writes a broad range of insurance, including professional liability. He said he doesn't expect the agency's use of the E&S market to change greatly in 2007, although insurers, despite softening conditions, are asking for more (but still profitable) business. “We will have to stay close to our companies on product and price, he said. “We will keep our underwriting integrity while doing our best to offer better pricing by using credits, as allowed by our companies, to keep and write good business.”
“Our companies want to write a broad array of classes,” Steves said, “especially artisan and specialty contractors, vacant buildings and dwellings, habitational property outside coastal areas, commercial and industrial contractors, janitorial services, manufacturers and distributors. It's the same things we've always written, except the standard markets are skimming off the best of it.” The E&S markets are still a mainstay for restaurants and liquor-liability risks, Steves added, as well as for garage liability, builders risk and difficult transportation accounts.
The exception to the soft market is coastal property, Steves said, where its difficult to impossible to place risk. Where there is availability, he added, pricing and deductibles are up. Steves said some of his E&S markets will write excess wind coverage for coastal properties over the primary insurance provided by the Texas Windstorm Insurance Association, the state's quasi-governmental “market of last resort” for hurricane coverage.
“Our wish list for 2007 would include increased aggregate or capacity in the second tier of counties away from the coast,” Steves said, “a market or two to write new-construction residential contractors with uninsured subs, and something non-catastrophic to harden the market and keep standard markets from poaching E&S business.”
Anthony F. Markel
Markel Corp.
In 2006, according to information posted on its Web site, Markel Corp. recorded a 78% combined ratio on its E&S business, down from 92% in 2005. Does it get any better than that?
“Let's put it this way,” said Anthony F. “Tony” Markel, president and CEO. “It might get better than that, but you certainly wouldn't expect it.”
While Markel Corp., like other insurers, was helped by a benign 2006 hurricane season, Markel said its results also reflected favorable loss development. Indeed, the insurance group reported that $16.5 million in increased loss reserves connected to the 2005 hurricane season were more than offset by $176.6 million in favorable loss development associated with professional liability and products liability business for accident years 2002 through 2005.
Markel said that the insurer's approach is to reserve conservatively. “If you see us posting outstanding results,” he said “it's only because we've now got years that are maturing, where we've got recognizable redundancies.”
Markel said possibly as much as 80% of Markel Corp.'s business is nonadmitted. Among its operations that write such business are Evanston Insurance Co., which is the nation's seventh-largest E&S carrier, and Essex Insurance Co., the 10th largest. He said the insurer writes “virtually anything of a specialty nature, where we can add value and make an underwriting profit. … The only two things, frankly, that are off limits for us … are long-haul truck and workers compensation.”
Despite the migration of some E&S business back to standard insurers, Markel said the outlook for 2007 remains good. Among the lines in which rates are eroding, he said, are casualty, umbrella and professional liability, including D&O. Successful regional companies are among the stronger competitors, he added. “I don't think the competition is so severe yet that it is depressing margins down below where they're reasonable,” he said, “but the trend is concerning.”
In the property cat market, much depends on the number and severity of events. “I do think that those players that are still in it are much more sophisticated and better priced for the long run,” Markel said, adding that he thought the industry is “pretty well prepared to digest a reasonable cat year.”
Markel said the level of E&S carriers' commitment to underwriting will be the third determinant of what kind of year they have in 2007. “It remains to be seen how much discipline the market is going to show in that regard,” he said. “I've been around this industry a long time and, candidly, I don't give it particularly high marks for discipline.”
Markel said the insurance cycle has reached the point where E&S carriers are returning to their core market: tough products liability, hard-to-place property, fireworks manufacturers, etc. Consequently, even if things turn out optimally, he said, E&S insurers' share of the commercial-lines marketplace is unlikely to grow in 2007–and could even decline a bit.
In regard to catastrophe property insurance, Markel said the insurer is a “fairly big writer of earthquake” and “a reasonably significant player on coastal wind.” He said he was dismayed by the recent enactment of legislation in Florida that is intended to lower insurance costs by making the state-created Citizens Property Insurance Corp. a competitor for private insurers and the Florida Catastrophe Insurance Fund an alternative to private reinsurance. The ultimate result, he said, could be to drive private insurers and reinsurers from the market.
“I think it's an awful, awful precedent for the legislators in Florida to effectively put the taxpayers in the insurance business,” he said. Should hurricanes really hammer the Sunshine State, he said, its residents will be left with the tab. While Markel said he didn't closely monitor the debate leading up the enactment of the legislation, he said he wondered whether legislators sufficiently thought the idea through or whether “the taxpayers understand what they've bargained for.” While the new legislation appears targeted mainly at the admitted personal-lines market, Markel said, “Anything of that nature is going to have an effect on everybody … at least indirectly.”
Markel Corp. is not planning anything flashy for 2007, he said. “We continue to look for opportunities to expand our product-line base and to grow our existing products, but we don't force it at the risk of underwriting profit, and we just sort of stick to our core competencies.”
Kevin Kelley
Lexington Insurance Co. At Lexington Insurance Co., the nation's largest E&S insurer, President Kevin Kelley, sees an E&S market that is regaining its financial footing, which should help ensure a continuation of positive results.
“I think that 2006 was a very important year,” Kelley said. “I would view it as the beginning of what I would call a transition market.” Having been left “substantially short” of what it needed in capital following the 2004 and 2005 hurricane seasons, Kelley said the industry last year made significant progress in closing the gap. “I think it will probably have to continue (to do) that throughout 2007,” he added.
For 2007, Kelley said he expected casualty rates to soften, although not at an accelerating pace. Primary products liability could be the line in which E&S insurers will face the most competition from standard carriers, Kelley said, adding that the market for non-cat property insurance also will be highly competitive.
Kelley said E&S carriers with strong balance sheets will continue to find opportunities in the market for catastrophe-exposed property. He added that insurers competing for such business will continue to find reinsurance a significant cost, however, despite a benign 2006 hurricane season. Kelley said most of Lexington's cat property reinsurance covers renewed at the beginning of the year. “From January '06 to January '07, I would say that they were up probably in the 35% range,” Kelley said. “In general, I would say, the property reinsurance market remains pretty firm.”
Lexington provides coverage for cat-exposed property in both personal and commercial lines, Kelley said. It is active in Florida, where the governor in January signed into law legislation enabling Citizens Property Insurance Corp. to compete with private insurers like Lexington. The state-created carrier previously functioned as a typical “market of last resort.” Citizen's is overwhelmingly a homeowners market. Yet, while fewer than 10,000 of Citizen's 1.3 million policies are written for commercial properties, they account for about 15% of the insurer's exposure, according to data posted on the carrier's Web site.
Kelley said it was unclear what effect the new legislation will have on Lexington. “But based on what we know, it should not have a dramatic impact on commercial business,” he said. It may affect Lexington's home-owners book, he said, “but we provide big limits to very high-valued homes in Florida. So in that market, you're probably still going to continue to buy from a non-Citizen's alternative.”
Lexington also appears to see opportunity in the terrorism insurance market, having recently announced an increase in per-risk capacity to $250 million, from $100 million. Kelley said the insurer made the move primarily for competitive reasons. “We see Lloyd's putting up that kind of capacity and felt that, in order to effectively compete and attract that kind of risk, we had to do likewise,” he said. The move did not reflect an estimate on the odds that the federal Terrorism Risk Insurance Act, which is set to expire at the end of the year, will be continued in some form, Kelley said. He declined to comment on what Lexington might do if TRIA is not extended.
Randall Jones
Maxum Specialty Insurance Group
At Maxum Specialty Insurance Group, CEO Randall Jones expects the bulk of the carrier's 2007 growth to come from its relatively small admitted unit. As for its nonadmitted business, “we're basically just trying to hold the line and have more modest growth expectations,” he said.
Maxum Specialty Insurance Group consists of Maxum Indemnity, a nonadmitted insurer that operates in 45 states. The company, formerly known as Caliber One Indemnity Co., was purchased and renamed by Northern Homelands Co. in 2003 and accounts for approximately 85% of the group's business. About 18 months later, Northern Homelands purchased Golden Isles Insurance Co. and renamed it Maxum Casualty Insurance Co. It now does business in 25 states as an admitted subsidiary of Maxum Indemnity.
Jones said Maxum is primarily a casualty insurance market, with property business accounting for less than 10% of the group's overall book. On the nonadmitted side, the insurer writes midsize liability accounts. Average premiums are around $40,000 for primary casualty and low-layer excess, he said, which is written for riskier accounts like manufacturers and contractors that fit within the excess and surplus marketplace. Maxum Indemnity also writes miscellaneous E&O, he said, as well as professional liability insurance for small architect and engineering firms and for allied medical accounts, excluding such risks as nursing homes and physicians. The carrier deals with wholesale brokers and general agents who may have binding authority for its smaller P&C business such as small contractors, lessors and mercantile risks. On the admitted side, Jones said Maxum Casualty was set up specifically to write small trucking operations, typically those with five or fewer power units.
Jones said Maxum ended 2006 with about $85.2 million in premium volume. The goal for 2007, he said, is $101 million. “That increased production is primarily coming from … the (admitted) transportation division,” he said.
Jones said everything but catastrophe property will be more competitive in 2007. “We see standard markets coming in on some of the riskier liability business that we were writing when the market was tighter–maybe light manufacturers, some contractors that were not quite as hazardous … architects and engineers, and miscellaneous errors and omissions.”
Maxum's casualty reinsurance treaties renewed in January, and Jones said the process went smoothly. “We have a quota-share arrangement, which is a little different from excess of loss, where you're negotiating rates,” Jones said. While the reinsurers scrutinized the group's underwriting standards, he said, they were willing to discuss support for new opportunities the group may wish to pursue in 2007, subject to understanding the rationale of the underwriting approach.
Maxum works with fewer reinsurers than do most carriers its size, Jones said. “Our strategy is to partner with a limited number and just share everything with them. So for us (treaty renewal) is more of just a continuation of an ongoing dialogue. We didn't ask for any major enhancements. It was more just 'keep moving forward.'”
Jones said that as a newer and smaller insurer (A- VII), Maxum chose its reinsurers with an eye toward security and the credibility they would give them with rating agencies and customers. The insurer also started out with relatively low net retentions, Jones said, and has slowly increased them as the company has gained experience. Maxum offers casualty limits up to $5 million and this year is retaining up to $650,000 of that exposure, Jones said–up $100,000 from last year.
On the nonadmitted side, Jones said Maxum will seek new business primarily by tweaking coverage and expanding into additional classifications. “When you find the market getting softer, we try to put more time and effort into product development,” Jones said. “For instance, on a rolling three-year basis, we like to see at least 10% of our premium come from new ideas or expansion of products.”
One example Jones cited is a combined products liability and manufacturers E&O policy for technology-oriented manufacturers. He said the carrier also is placing more emphasis on insurance for defense contractors and is researching a move into specialized firearms and munitions manufacturers and distributors.
Jones said Maxum deals with a limited number of brokers and general agents. Each of the carrier's four divisions appoints 35 to 45 general agents. Some of these intermediaries work with more than one division.
The goals the carrier shares with its producers these days are not premium-based, Jones said, but rather focus more on hit ratios and the quality of the underwriting information and process. It also is seeking to become one of their producers' largest carriers for the lines of business it offers.
Premium-based goals potentially undermine underwriting integrity, Jones said–something to avoid regardless of market conditions.

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