Category Actuarial / Analytics

Feb
17
2016

Beyond the New Normal: Could the Surplus Lines Market Be Heading for a 10% Market Share?

A few years ago, I posed the question of whether the nonadmitted market had reached a “new normal” in terms of market share, or whether it was destined to retreat to its historic norms. To date, there has been little sign of retreat. According to A.M. Best’s annual survey of the market, surplus lines market share edged up to 7.1% in 2014. With the previous hard market peak a decade past, the market’s resilience suggests that maybe, instead of fretting about retreat, we should be considering a different question: Could the surplus lines market be heading even higher? In this post, I’ll cover three ongoing trends that could propel the market beyond a 10% share: 1) declining interest rates, 2) big data, and 3) catastrophe risk.

Jun
2
2015

Predictive Analytics and Surplus Lines: Freedom of Rate but Not Free of Unfair Discrimination

Harold Weston – Similar risks should be priced similarly, and relevant distinctions based on actuarially relevant factors should be captured in the rate. Predictive analytics in insurance will allow ever more precise design of insurance products, selection of insureds and product targeting, and price for the risk exposure. However, the proliferation of “big data” that […]

Mar
18
2014

The Rising Importance of Property Catastrophe Risk in the “New Normal” of the Nonadmitted Market

George Zanjani – Last summer, I wrote a piece speculating on whether the nonadmitted market had reached a “new normal.” Nonadmitted market had been hovering close to 5% for a few years, even though 1) the historic norm is about 3% and 2) the hard market of the early 2000’s had ended some time ago. […]

Jul
15
2013

A “New Normal” for the Nonadmitted Market?

Despite some ups and downs, the first decade of the new millennium was a good one for business volume in the nonadmitted market. Nonadmitted business (defined as any business written by an unlicensed company, excluding RRGs) soared from $11 billion in 2000 to $24 billion in 2011. Viewed differently, from 2000 to 2011, nonadmitted premium volume grew at a healthy 7% annual rate.

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