When it comes to insurance, there is opportunity in specialty
Brenda (Ballard) Austenfeld of RT Specialty shares her perspective on current trends and opportunities in the E&S insurance space.
Brenda (Ballard) Austenfeld learned the importance of being a hands-on leader in the wholesale-insurance space early in her career when she worked closely with Fortune 1,000 insureds as a broker.
Over the course of her 30-year career in excess and specialty lines (E&S), this industry executive has taken on roles as both a retail and wholesale broker. She was able to “experience first-hand the exciting shift in the flow of business into the wholesale and delegated authority distribution channels,” says Austenfeld, who now serves as president of National Property and managing director at RT Specialty.
In addition to her work at RT Specialty, Austenfeld serves as board secretary for the Wholesale & Specialty Insurance Association (WSIA) and contributes to the WSIA Diversity Foundation, the Council of Insurance Agents & Brokers and the Kansas 4-H Foundation.
PropertyCasualty360.com recently connected with Austenfeld to get her take on trends and opportunities within the E&S insurance sector. What follows is an excerpt from that conversation.
PC360: What do you see as the top issues insurers should be focusing on right now?
Austenfeld: The expansion into the non-admitted segment by capital providers has proven more efficient, and effective economies of scale can be gained. Capital deployed to those who are highly specialized and talented in a chosen industry class or coverage type is key. WSIA continues to track this expansion, confirming sustained growth of the E&S channel with data from state stamping offices.
This continued flow of business into the E&S channel shines a spotlight on the need for additional top underwriting talent. It is vital for insurers to continue to hire, retain and develop experienced underwriters in order to focus on opportunities presented for new business.
Also, property capacity within catastrophic areas continues to be one of the most important topics in today’s market. The definition of ‘CAT’ property has expanded beyond hurricane and earthquake with now additional concerns by insurers and capital providers to wildfire, flood, convective storm and other potentially catastrophic perils. This provides insurers a unique opportunity to determine where best to deploy capacity in order to take advantage of the opportunities created by these challenging risks.
PC360: Where do you see the most opportunity in the specialty insurance space?
Austenfeld: The emerging or evolving risks presented by climate change, wildfires, cyber, the pandemic, the reemergence of viruses thought all but extinct in most parts of the world such as monkeypox and polio, are all good examples. The benefit and importance of the E&S sector continues to grow as risks continue to become more complex. Wholesale brokers and markets are vital trading partners of the retail broker and risk management team as often the expanded team creates best terms and most cost-effective solutions.
Opportunities are key for insurance carriers who can offer more short-limit capacity and rate-on-line solutions for specific classes of business such as, health care, transportation, high hazard casualty and catastrophic property areas.
Engaging with the surplus lines community continues to highlight the tremendous amount of value added through technical expertise, innovative solutions to complex risks and access to strong and stable surplus lines insurers. This collaboration is truly a win/win solution for the insured.
PC360: Can you explain what the Conning analysis is and how you utilize it in your work?
Austenfeld: WSIA worked with Conning on a distribution cost analysis, which concluded that wholesale distribution does not increase the cost of the transaction to the insured. This report is key in communicating the value of the wholesale distribution system to the retail industry in addition to the specialized talent the wholesale arena brings to the table.
PC360: What skillsets should the next generation of insurance professionals be developing?
Austenfeld: Specialization is exactly what the E&S segment was built upon and where the next generation of insurance professional can expand upon as they focus their knowledge within specialized areas to become the very best in that class of risk or product.
Not only is technical knowledge important, it is vital for young professionals to develop personal skills to enhance and strengthen their ability to build stronger and deeper personal relationships with retail brokers and underwriters.
PC360: How do you hope to see the specialty insurance sector evolve over the next several years?
Austenfeld: The excess & surplus Lines arena has been known for many years for the creative solutions provided. With greater freedom of rate and form compared to the admitted market, today is no different as global professionals continue to offer unique products, with speed to market, when needs arise. The world continues to be riskier which requires specialization, creativity and technological improvements.
It will be important for insurance companies to continue to provide broadened appetites in a wide range of high hazard classes of business. In addition, training and developing of insurance professionals to provide deeper bench strength throughout will continue to be an important focus for everyone as our great industry continues to expand and evolve.
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