SAN DIEGO — Business has been pouring into the wholesale primary-side insurance markets as policyholders and brokers seek alternatives amid primary rate hikes and capacity constraints, according to sources at this week’s Wholesale & Specialty Insurance Association’s Annual Marketplace.
“We’ve seen a large influx of business into the surplus and surplus market,” said John Anthony, senior vice president of surplus and surplus wholesale, contract property and casualty, deductibles and umbrella in Scottsdale, Ariz., for Nationwide Insurance Co.
Turmoil in the primary markets has prompted policyholders and brokers to explore other options.
“A number of retail brokers were challenged with the dramatic change in market conditions and needed to find capacity or product expertise in certain coverage areas,”
; said Jack Kuhn, Berkeley Heights, New Jersey-based president of Westfield Specialty, a unit of Westfield Insurance Co.Exposures that are not adequately served by the primary markets can be addressed through the excess markets, experts say.
“We’re seeing more buyers go into excess and excess because of the flexibility we have around rate and form,” said Bob Mescher, senior vice president at Admiral Insurance Group, a Berkeley firm, in Mount Laurel, New Jersey. “As a marketplace, surplus and surplus lines are created to respond to the business that is not a good fit” in the general commercial insurance market.
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