NU Online News Service, May 28, 2:33 p.m. EDT
Fifty-four percent of wholesale brokers and excess and surplus lines carriers are seeing increases in submission activity, a survey by a surplus lines group has found.
The poll of 178 members by the Kansas City-based National Association of Professional Surplus Lines Offices (NAPSLO) also found that a majority of E&S carriers and wholesale brokers and are not seeing a decline in capacity or a tightening of specialty lines terms.
For the rest of the year, respondents said factors with the most capability to impact availability and pricing of specialty lines coverage are catastrophic events, the economy and changes in reinsurance capacity.
The survey, conducted in the middle of this month, compared results of the first quarter to the same period of 2008.
Only 21 percent of those responding said they have seen declining capacity, while 38 percent saw expanding capacity, and the rest reporting no change. Two percent said the question was not applicable.
The survey found only 5 percent citing a tightening of terms, 17 percent observing some slight tightening, 44 percent seeing conditions as about the same, and 31 percent citing a loosening of terms.
Questioned about pricing for various lines, most respondents said that they were either flat or declining. The exception was catastrophe-exposed properties, where 33 percent of respondents said there were increases up to 10 percent, and another 23 percent said they saw price increases of 10 percent or more.
"NAPSLO members confirmed that pricing, capacity and terms in specialty lines remain relatively flat, but recognized that a major catastrophic event or changes in the economy could have a significant impact on capacity," according to NAPSLO President John Wood.
"During these uncertain times, wholesale brokers and surplus lines carriers remain strong, with ample capacity to meet specialty lines needs in any market cycle," he concluded.
Nearly half of the respondents to the survey said that they were not seeing a change in the availability of specialty insurance coverage–while 38 percent said they were seeing an increase in coverage availability, and only 12 percent said they were seeing a decline in availability.
More than half of the respondents reported submission activity increasing, with 32 percent reporting a slight increase and 22 percent citing consistent increases. Only 23 percent reported declining submissions, while 22 percent reported submissions were about the same as in the first quarter of 2008.
Specialty lines where respondents reported seeing the greatest increase in submission activity in 2009 were property, general liability, casualty and cat-exposed property.
While availability, terms, pricing and submission activity were comparable to 2008, respondents reported decreased retention levels in many of the 10 specialty lines surveyed, led by casualty, property, excess and umbrella, and transportation.
Although significant decreases were reported along these lines, the majority of respondents reported retention levels were about the same along all lines.
Full survey results are available online at //www.napslo.org/imispublic/PDF/Publications/MarketSurvey09.pdf.
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