Between a Rock and a Hard Market – The Changing State of Excess Liability

This time last year, an experienced broker could competitively price a high limit excess tower securing only three carriers to offer $75 million in limits. Today, the composition of a similar tower looks very different with higher attachment points, lower limits, and higher minimum premiums all at a much higher rate.

UmbrellaRateIncrease_12.19The changing state of the excess market is the result of frequent and severe losses incurred by insurers from natural and man-made catastrophes such as hurricanes and wildfires as well as an increase in large liability settlements from mass shootings and sexual harassment claims. To limit their exposure, many carriers are significantly raising rates, restricting their appetite and capacity, or leaving the excess market altogether. Carriers once willing to write the first $25 million layer of an excess policy with $75 million in limits are now more cautious as to where they participate in the tower and how much capacity they provide.

Underwriters with an influx of submissions are quoting later, tightening forms and are overall less willing to negotiate limits and rates. According to the Council of Insurance Agents & Brokers (CIAB), umbrella excess rates have steadily increased since the fourth quarter of 2018. These market conditions are expected to continue into the first quarter of 2020.


How All Risks Can Help

  • Market Relationships – With 55 years in the industry, we have long-standing relationships with top tier E&S carriers to ensure our retail agents have access to multiple players when additional attachment points are necessary. Our brokers hit the market fast, follow up quickly with underwriters and manage renewals earlier. 

  • Technical Expertise – We do not approach the marketplace uniformly. Experienced brokers can help identify and develop targeted loss prevention strategies to drive down the cost of exposure losses to improve insureds’ risk profiles. It is common practice for All Risks brokers to call underwriters directly to discuss risks in-depth. Our trusted market relationships could offer customized terms and conditions needed to secure coverage for your client.

  • Market Education – Communication is key in a changing marketplace. We keep our retail agents apprised of all market shifts and trends so that they can prepare their insureds for the possibility of non-renewed policies, lower limits and higher rates. Some customers are accepting larger deductibles and retaining more of the risk. Before accepting this new trend, we assist with form comparisons and coverage clarification to ensure you and your clients are well-informed before selecting a policy.

  • Customer Experience – Timeliness and responsiveness are critical in a shrinking market. We understand the needs of our retail agents and are structurally organized to offer in-house services to deliver quick turnaround time on quotes and policies. Our brokers are located nationwide and collaborate efficiently to exceed your expectations.

Throughout this period of market uncertainty, All Risks remains your partner; committed to securing the best solution in terms of coverage and pricing to help you win and retain accounts.

Contact us for more information on Excess Liability.

Legal Disclaimer: Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.