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From the Front Lines: Excess & Surplus

"The surplus lines industry is very nimble and can adjust to the changing economic climate very quicky," says independent agent Tony O'Donnell. "As standard markets change their appetite, then the surplus lines market has to change even quicker to maintain market share."
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From the Front Lines: Excess & SurplusTony O'Donnell

Vice President

Quaker Special Risk

Worcester, Massachusetts

How did you get started at your agency?

Similar to most, I fell into the insurance business. I was working as a high school mathematics teacher when I met Karin Branscombe who, at the time, was principal of Quaker Special Risk. She said that if I was ever thinking of leaving teaching and was interested in pursuing a career in insurance, then to contact her. I was looking to do something different, so I called and changed careers. I began by securing my license, did my CPCU exams and worked on developing a book of business. Initially, I sat at every single desk in the office and learned how to check policies, process endorsements and work on renewal policies. That was 27 years ago.

Why excess & surplus insurance?

The variety of submissions and the ability to be creative with the surplus lines carriers. We write all types of business ranging from general liability, property, environmental, products and personal lines. As the old saying goes, we fill our belly from the scraps that fall from the table of the standard market. As such, no day is the same and we never know what type of submission will land on the desk each morning.

Challenges in the E&S insurance market?

Locally and nationally, capacity for certain classes is shrinking. Rates are increasing as the effects of losses from hurricanes, tornadoes, wildfires and ice storms have impacted the risk appetite of many carriers. The same thing is happening in the surplus lines market. As more risks exit the standard market, it allows surplus lines carriers to be more selective in their underwriting process.

In general, it's been very difficult for both the retail and wholesale agents who have been used to renewing accounts with little or no increases over the past few years. Recently, we have seen price increases anywhere from 10%-30%, depending on the line of business.

Future trends?

There will be changes in the transactional type of business. We're going to see a lot more automation as technology develops. Software will enable some accounts to be clea­red, rated, quoted and bound within hours. Transactional business will be quicker to allow time for underwriters to work on more complex risks that involve their respective skill sets.

Technological advances will lead to new challenges in the marketplace. Driverless trucks may need different insurance products than the customary business auto policy.

Advice for a fellow agent in the E&S insurance market?

It's a very diverse and challenging business. You don't see the same type of submissions every day. If you want variety and the ability to be creative, then the surplus lines industry will provide that for you.

The surplus lines industry is very nimble and can adjust to the changing economic climate very quicky. As standard markets change their appetite, then the surplus lines market has to change even quicker to maintain market share. It's never dull, so if that's a career path you are seeking then it won't fail to deliver.

Olivia Overman is IA content editor.

16344
Monday, February 28, 2022
Commercial Lines