Alan Kaufman, president and CEO of wholesale brokerage Burns & Wilcox, says the “economy is still very rough.”
“You may find some pockets [of increasing rates], and we are pleased to see that, but the hole was dug too deep,” he said during a one-on-one interview at the National Association of Professional Surplus Lines Offices (NAPSLO) Mid-year Leadership Forum in Scottsdale, Ariz.
In other words, what news is a 10 percent increase in premiums—if rates were slashed in half during the height of the soft market?
More positively, Kaufman said some standard carriers are pulling back from the surplus-lines arena after recent subpar performance, leading to some additional business for Burns & Wilcox, the country's largest independent wholesale broker and underwriting manager with 37 offices nationwide and one in London.
But the firm is seeing “no big rush or boom” in business, says its CEO.
And his perspective on capacity?
Buyers are not seeing a higher degree of difficulty in layering a program due to any shortage of players of surplus providers.
“There is still plenty of capacity—plenty of people chasing the same business,” he said. “There is no shortage of markets” despite some change in appetite among standard and nonstandard carriers, continues Kaufman.
Next year the economy may improve enough to truly shift the market, Kaufman says, noting a robust recovery is unlikely during an election year.
The need for transportation coverage today may be on the uptick, as cars are delivered around the country to satisfy pent up demand. But Kaufman says he “doesn't see us getting back to where we were in [2005-2007]” anytime soon.
Catastrophe-exposed property is another pocket seeing tightening, sparked by a busy weather-loss year after multiple years of low rates. But casualty rates remain very low, Kaufman adds.
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