While executives attending the National Association of Professional Surplus Lines Offices Ltd. (NAPSLO) Mid-Year Leadership Forum, held this past week in Naples, Fla., do not expect a hard market to arrive anytime soon, they have identified growth areas in some segments and have developed strategies to survive now while preparing to seize opportunities that will materialize when the market does turn.

But as the soft market wears on, E&S/specialty insurers and wholesalers are also forced to deal with challenges to their traditional distribution system and pressure from the admitted markets. While executives have affirmed their commitment to the surplus-lines space and the wholesale-distribution system, they recognize the need for continued innovation and product development to distinguish themselves.

When interviewed at the conference, Stan Galanski, president and CEO of New York-based specialty insurer the Navigators Group, said that with respect to the soft-market cycle, there is still plenty of excess capital chasing stable opportunities. He added that from a pure competitive standpoint, he does not expect improvement soon. He mentioned, though, that increasing commodity prices arising from revolutions in the Middle East could be a wild card. The impact of runaway inflation could impact the market over time and may not be reflected in companies' plans, he said.