The Excess & Surplus Market: Customized solutions for agents and brokers.
A rock concert with brilliant pyrotechnics, a world-record helicopter bungee jump into the caldera of an active volcano above a pool of molten lava, two brothers attempting to swim the English Channel. How do these “out-of-the-box” events get coverage in a traditional and financially conservative low-risk world?
E&S Defined
Prime Insurance Company has been insuring rock concerts, bungee jumpers and other very hard-to-place risks for nearly two decades.
The excess and surplus market (E&S) provides coverage when standard insurance carriers cannot or will not provide it. E&S plays a vital role in the property and casualty insurance business. The E&S market fills a gap for agents and brokers, as it expands their capabilities by providing liability risk solutions for very hard-to-place risks when other markets decline coverage. Without the E&S market, individuals and businesses would be forced to go uninsured or self-insure their risk exposure which means they are on their own if an incident, claim or lawsuit occurs.
Types of Risk
Prime Insurance Company is in good company with such carriers as Lloyd’s of London and Berkshire Hathaway, to name but a few. While estimated to be less than 7% of the market, the typical types of risks written in E&S lines include those that:
• Are high risk, such as explosive manufacturing, firearms makers, hazardous haulers
• Do not fit standard market underwriting, such as bars and taverns with dance floors, vacant properties, taxi cabs
• Require higher limits than offered by standard markets, such as $10,000,000 + liability umbrellas or $5,000,000 + property limits
• require specialty coverage, such as special events, concerts, hole-in-one contests, and unique situations
• Have excessive or otherwise unacceptable loss history
The E&S market is also known for serving the “main street” sector within the business industry, and includes building contractors, aircraft liability and professional liability, as well as hotels, bars and restaurants.
Tailored Coverage
Out-of-the-box risk requires an innovative approach to underwriting. Coverage can be more tailored, or restrictive, and the premiums may be different than the standard market.
What makes Prime Insurance Company a good choice.
What differentiates one E&S carrier from another? When seeking out an E&S carrier, it is important to partner with a company that does not compete with current markets but writes the business being declined. Prime Insurance Company, for example, does not compete with current markets, but provides coverage on all or part of the risk, allowing for more new business opportunities for agents and brokers.
Prime Insurance Company writes business in all 50 states and is rated A- by A. M. Best.*
Prime offers 30 years of diversified, underwriting experience for very hard-to-place risks including commercial and garage liability, personal lines, commercial auto (not available in all states), specialty and professional liability.
The company works with agents and brokers in order to achieve flexible underwriting and the most suitable insurance solutions. It is this partnership approach — and a comprehensive suite of services — that has made it possible for Prime to cover the most difficult and very hard-to-place risks since inception in 1992.
More Choices for Coverage
In recent months, Prime has formed Prime Property and Casualty Insurance Inc (PPCI) an admitted carrier. PPCI offers commercial auto coverage in Illinois and Nevada and continues to seek approval in other states.
The company also offers individual liability insurance coverage that fills in the gaps for personal protection. People who volunteer, coach or participate in other activities are exposed to unique risks and gaps, and XINSURANCE can provide the one-of-a-kind coverage necessary to cover these gaps.
Customer Service Excellence
We provide a partnership approach and service is the cornerstone of our business. Our flexible underwriting, risk management expertise, and extraordinary claims results have allowed us to be a valuable resource to agents and brokers.
Prime Insurance Services
• Underwriters Direct Access (UDA)
o Quick quotes and policy delivery
o Customized coverage
o No minimum production requirements
• Claims Direct Access (CDA)
o Expert at negotiating equitable and quick settlements
o Well-respected and successful in-house legal team
o Nationwide networking with defense attorneys, adjustors, and investigators
o Specializing in recreational, chemical users, construction, nursing home, premises liability, commercial auto and property loss
• Risk Management Direct (RMD)
o Focused, tangible risk management practices to eliminate or reduce controllable losses
o Expertise to help prevent accidents and costly claims
o Establish practices and procedures to further minimize damage and liability should an incident, claim or lawsuit occur
The Future of the E&S Market
What does the future hold for the E&S market? With the exception of 2012 when surplus lines insurers posted one of their worst years overall due to Superstorm Sandy, the E&S market is seen to be expanding. In September 2013, surplus lines insurers accounted for approximately 13.4 percent of all commercial lines direct premiums written, up from 11.1 percent a decade earlier and equal to the share recorded five years earlier.**
The Surplus Lines Stamping Office of Texas also recently reported that the 14 states with stamping offices saw continued growth in surplus lines premium during 2014, up 7.6% from 2013. According to that report, total surplus lines premium reported to the Stamping Offices was nearly $24.2 billion in 2014, representing a 7.6% increase over 2013. Approximately 3.4 million filings were made with the Stamping Offices in 2014, up 6.9% from 2013. History shows us that reports from the Stamping Offices continue to be fairly representative of the total U.S. surplus lines market. ***
Momentum is expected to increase as a number of insurance companies are eliminating non-core books of business, strengthening underwriting guidelines and raising rates. Business underwritten by the standard market in recent years is also being re-underwritten and moving back to the surplus lines market. According to A.M. Best, “More borderline surplus lines business will be shifted into the surplus lines sector in the midst of improving market conditions and changing risk appetites for standard market insurers.”
The E&S market allows brokers and agents to grow their capacity and revenue, while fulfilling an important customer need. It’s a win-win for everyone and Prime Insurance Company will play an integral part in the growth of the industry.
For more information on Excess and Surplus Specialty Lines coverage and Prime Insurance Company, visit www.Primeis.com or call 877.257.5590.
* For current ratings, access ambest.com
**Insurancejournal.com, September 23, 2013
***Property and Casualty 360. February 2015
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Authored by Rick J. Lindsey, CEO, President, and Chairman of Prime Insurance Company
Rick J. Lindsey hails from Salt Lake City, Utah. He began working in the mailroom of his father’s Salt Lake City insurance firm, getting his introduction to the business that became his lifelong career. Lindsey quickly rose through the ranks while working in nearly every imaginable insurance industry job. As an entrepreneur, specialty lines underwriter, claims specialist, risk manager, and a licensed surplus lines broker, Rick Lindsey is highly skilled in all levels of leadership and execution. As he progressed on his career path, Rick discovered an urgent need for insurers willing to write policies for high-risk individuals and businesses. He was frequently frustrated that he could not provide the liability protection these entities desperately needed to safeguard their assets. He also formed the belief that insurance companies acted too quickly to settle frivolous claims. Lindsey decided to try a different approach. He started an insurance company and became the newly formed entity’s CEO. This opportunity has enabled Rick to fill a void in the market and provide a valuable service to businesses, individuals, and insurance agents who write high-risk business. Prime Insurance also specializes in helping individuals and businesses who live a lifestyle or participate in activities that make them difficult for traditional carriers to insure. If you’ve been denied, non-renewed, or canceled coverage, don’t give up quite yet. Chances are Prime Insurance can help.
