One reaction to current market conditions is increased attachment points with standard lines because they are lowering limits at renewals in response to heavy catastrophe-related losses. This widens the buffer layer—residing between the primary and excess layers of an insurance program.

For example, the excess coverage doesn't kick in until $5 million on a policy that had an attachment point of $2 million the prior year.

The surplus-lines industry can step in to cover the gaps in insurance, Vitale says.

“It's one of the things our industry can respond to quickly,” he says. “But it also points to changing trends in risk appetite.”

The coverage hasn't been needed because no one has been turning away risk.

Vitale was not the only insurance executive at the conference to point out the trend. When NU asked NAPSLO's board of directors to come up with opportunities in the market, AmWINS Brokerage President James Drinkwater mentioned buffer liability coverage.

Catastrophe losses, low investment income, new versions of hurricane models and the depletion of loss reserves have taken their toll on primary carriers. This has led to a 15 percent increase in business in the E&S market, Vitale says, and standard insurers are exiting.

“I believe the market is self-correcting now,” he adds. “Submissions are up. You're seeing some double-digit increases.”

He adds, “The guys who have jumped into surplus—underwriting difficult risks—are getting burned. That's the first signal, when they're turned back.”

He says the next couple of catastrophes will “really take a bite” out of capital, creating an inflection point that will truly mark an end to what he terms the “cheating stage.”

The New York-area native says he's happy to be back home with Aspen. Hired in March from Zurich Financial Services, where he was CEO of global corporate, Vitale says he's had the “most fun building a first-class specialty insurance operation.”

With admitted and nonadmitted capabilities, Aspen U.S. is licensed in 47 states and expects to get licenses in the 3 remaining states by the end of the year, Vitale says. With a significant investment from its parent, Vitale says Aspen U.S. has expanded offices, staff, and policy issuance and claims technology.

Moving forward, Vitale says he likes E&S casualty business (products and manufacturers), inland and ocean marine, professional liability (architects and lawyers errors and omissions) and program business (Aspen started one for brownstones).

“We'll always look at that value proposition were we can make a difference,” Vitale says.