Since mold and silica, there really have been no new, hot-button, doom-and-gloom Environmental coverage issues. We hear a little talk about the risks of nanotechnology. That's an issue that covers so many areas of insurance; Environmental is just one piece of the challenge. Going forward, I could see that becoming a bigger concern. We see some interesting claims come from the creative recycling of hazardous materials—but those have always been problems and always will be. In the early 1990s, an insured took old tires to build fences in fields and planted vines over them so you couldn't tell it wasn't a stone wall. They were concerned then about leaching of the tires into the soil. The recycling of any product creates interesting questions of what it will be in the end.

What are the overall capacity trends within Environmental right now?

There is more capacity today than one year ago—and this is a good trend because we're seeing a need for much higher limits from insureds. Until recently, very rarely did a middle-market insured with a need for mainstream Environmental coverage need more than $10 million or $15 million. Now we're frequently being asked for $25 million or $50 million.

What factors account for this need for twice as much coverage—or even more?

It's being contractually driven by dealmakers at the top—lenders, buyers and others are demanding $25 million of pollution coverage instead of $10 million to do a transaction. It's led to a huge influx of opportunities.

And what's the story on the pricing front? What we think of as the quality, solid carriers are looking to get modest rate increases on Environmental insurance: from 3 to 7 percent. But other carriers are still undercutting prices trying to put premium on the book. For our Environmental accounts—asbestos contractors, landfill operators, emergency-response teams—we also work on their General Liability, Commercial Auto and Workers' Compensation—and those classes of business are trending up faster than the others. We're seeing pretty consistent rate increases in those classes. —Interviewed by Bryant Rousseau