Three surplus lines execs identify industry's biggest challenges, opportunities
Here's what three surplus lines professionals have to say about the future of the industry.
Alan Kaufman, Chairman, President, CEO, H.W. Kaufman Group
Very often, an industry’s biggest challenges opens the door to new opportunities. While the prolonged soft market continues to be a challenge for the industry, we are focused on leveraging the current market status to position our business for long-term growth. Our largest challenge is finding the best talent.
One of the key ingredients for continued growth is building a pipeline of highly qualified individuals. We are addressing this challenge by supporting both internal and external education efforts in addition to very competitive compensation and opportunities for career advancement.
First, we are raising awareness about insurance as a successful career opportunity, and I encourage other business leaders to do the same. In 2016 I endowed a professorship of Risk and Insurance Management at Michigan State University. It has already resulted in the establishment of an insurance minor in the business school and a future source for excellent recruits.
Second, we are committed to continuous education for our team. Expertise and strong market relationships is critical in our insurance profession. Understanding the industry and all the intricacies that are required when placing coverage for everything from catastrophic property exposure: wind, earthquakes, flooding, wild fires to construction, professional and cyber liability, makes training a necessity as well as an opportunity.
To recruit the best and brightest to our industry, we need to offer professional development and clear site lines to personal career success. At the H.W. Kaufman Group, we have made leadership development a priority, establishing multiple training programs. This has not only become a significant recruitment advantage but has also helped with increased retention of our best talent.
We stress an entrepreneurial culture, which is focused on developing expertise, to provide our recruits ownership and link their personal success to our company success. Our future as a profession can only be as good as the people we hire. Whether markets are soft or hard, they each come with their own challenges requiring hard-working, smart people at the forefront.
Our team continues to capitalize on greater expertise regardless of market conditions with the educational opportunities and culture that we provide.
Related: Transformation in how insurance companies get work done: external talent
Brenda (Ballard) Austenfeld President, National Property Practice RT Specialty Kansas City
The amount of opportunity in Surplus Lines is staggering. The Specialty Market is the strongest it has ever been, representing 11.1% of the entire Property & Casualty Market – and it is on the rise. Due to this expanding market, one of our biggest challenges is keeping pace with the exponential rate of change we are experiencing.
There are new markets and capital entering our space, along with markets changing their distribution models. In addition, retail brokers continue to change the way they interact with wholesale brokers with further consolidation of appointed wholesale partners. These constant changes drive a demand for specific expertise that is fulfilled by the wholesale distribution channel: The benefit and importance of this channel continues to grow as the market continues to get more complex.
Related: Best’s Special Report: Top 25 U.S. surplus lines companies for 2016
Wholesale brokers and markets are a vital partner of the risk management team, as often partnering with a retail broker creates the best terms and most cost-effective solutions. Partnering with the Surplus Lines community continues to highlight the tremendous amount of value added through technical expertise, innovative solutions to complex risks, access to strong and stable surplus lines insurers with no added cost to the transaction – truly a win/win for the insured.
With the continued growth of the Specialty Lines world, recruiting and developing talent is viewed as both a challenge and an opportunity. Attracting the best and the brightest is the goal of every firm today, and it is a key priority for us. Building strong loyalty through exceptional leadership is critical.
Equally important is offering the next generation an opportunity to grow professionally, while also being part of a strong team that showcases talent of all the individuals coming together. This is a key component in successful recruiting.
Shannon Dahlke Applegate, CIPT Senior Vice President Houston & Atlanta Branch Manager McClelland and Hine Inc.
One of the biggest challenges in the E&S business is losing the ability to have Underwriters underwrite, and not become raters that just plug in the information to get a quote. While there is a lot of focus on automation, we cannot lose the ability to underwrite.
Underwriters now need to have strong digital and communication skills to get the job done. We all know that relationships are an important key to being a good underwriter, and we must keep in mind that we will always need people skills. We must recognize that technology is important to our everyday jobs but also that the technology is only as good as the information it is fed.
Having said that, I also feel that our biggest opportunities do currently lie in automation, where we utilize online quoting modules to quote more “vanilla” business. By allowing technology to handle these type of risk for agents, underwriters can now have more time to evaluate the risks that require critical thinking – thus utilizing their skills to help facilitate growth.
Related: Leadership defined: Q&A with WSIA President Jacque Schaendorf