January 1 renewals will be here in a blink, and it's a great time to start thinking about solutions for your more complex risks.
Consider this: The Excess and Surplus Lines (E&S) market provides insurance for specialized, difficult risks that traditional insurance doesn't cover. Not only that, it enables wholesale brokers to help retail agents meet the challenge of serving customers with constantly changing, emerging, and difficult-to-place risks.
Here are five strong indicators that turning to a wholesale broker for your client's coverage will make your life easier.
1. The Standard Market Is Swiping Left
You're going after new accounts, perhaps in a difficult class of business, and can't place them with your standard admitted markets. How come? The risk might not fit your standard market's appetite due to class of business, loss history or start-up status, to name a few reasons.
What now? It's time to turn to a wholesale broker and the E&S market for a solution. Because wholesale brokers keep their finger on the pulse of a market that's changing every day, they know where to find a home for your clients.
2. You've Received Non-Renewal Notices From Your Standard Markets for Specific Accounts
Once you receive a non-renewal on an account from your standard market, prepare a submission to send to your wholesale broker. Here's why.
A non-renewal indicates that a substantial change in exposure developed over the client's policy term and that the renewal will likely be more challenging to write than in the past, not only for the current carrier but also for other admitted carriers.
Whether the non-renewal is a result of a client's losses, an increase or decrease in revenue, new operations or another reason, this change indicates that the direct market no longer wishes to insure the client — and perhaps even the niche market altogether.
During this firm market, many carriers have reduced their appetite or exited particular classes of business or coverage lines altogether. As the Insurance Information Institute notes, "[d]uring hard markets and when uncertainty and disruption are present, the surplus lines market generally thrives."* The Triple-I cites data from AM Best's 2021 "Best's Market Segment Report: With Expanding Opportunities, U.S. Surplus Lines Industry Posts Largest Annual Premium Growth" showing that the surplus lines market had 17.5% more direct premiums written in 2020 than 2019.
It's important to remember that a standard market non-renewal isn't necessarily an indicator of a poorly run operation. Your insured may no longer fit into the standard lines "box" for reasons beyond the insured's control, like a spike in catastrophic events related to climate change. There may be a need for a wholesale broker's markets and relationships to step in and ensure you can offer a solution to your client at renewal so that the business is properly covered.
3. Their Niche Is Outside Your Comfort Zone
So you're not as comfortable as you would like to be in certain niche markets or coverage lines?
If you're unfamiliar with a certain industry niche or a specific product line and aren't comfortable providing a quote to your insured — including answering questions that may arise when presenting your proposal — it's time to engage a specialist.
Wholesale brokers have underwriting expertise and experience in writing difficult-to-place risks and are a valuable resource in helping you discuss your proposal and quote with your clients. They not only make sure that the coverage, retentions and premium on an account all make sense, but also provide the confidence you want when offering the right solution for your client.
Wholesale brokers will become an integral part of your team, as they generally have a specialized area of expertise such as transportation, manufacturing, construction, professional lines, property, excess, etc.
Wholesale brokers have also most likely seen, heard of or placed a specific account or coverage line. If they can't provide you with an avenue for coverage, experienced wholesale brokers will help direct you where to go. Ultimately, wholesale brokers are invaluable in helping a retailer with challenging coverage placement.
4. You've Been Scrambling to Find Coverage in a Changing Market
Wholesale brokers can respond to market changes quickly, providing custom solutions to help protect your customers when traditional policies aren't available or fall short.
For example, consider Cyber insurance. Carriers are changing appetites, exclusions, sub-limits and the like daily. Wholesale brokers have the ability and relationships to approach both the E&S and admitted markets to get coverage written based on the client's risk profile and carrier appetite. They excel under challenging and difficult conditions and can help find creative and product-oriented solutions.
5. The Insurance Product You Need Doesn't Exist Yet
As an agent, it's vital you support your insured's ability to grow by looking for creative and flexible insurance solutions as emerging technology and trends transform industry niches.
Over the years, certain industries have transformed and require insurance coverage that's both creative and nimble. For example, medical treatments and technology are constantly being used to advance healthcare. As a result, the healthcare industry looks very different from 10 years ago. For providers and institutions to evolve, they must look for new ways to deliver treatment and combat disease. Too often, the admitted market doesn't enable an insured to have the flexibility needed to provide creative solutions for patients. A wholesale broker can provide creative insurance solutions that allow an insured to grow and offer out-of-the-box services.
As a wholesale broker, RPS helps insurance agents obtain the right coverage for clients with access to the best markets and product lines and programs, and a staggering amount of niche knowledge. So never fear, we've got you covered.
*"A Firm Foundation: How Insurance Supports the Economy" Insurance Information Institute, accessed 9 Sept 2022.