A.M. BestTV: Growth Slows, Underwriting Results Dip for Surplus Lines Writers, Say A.M. Best Analysts

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FOR IMMEDIATE RELEASE

OLDWICK - SEPTEMBER 23, 2016 12:21 PM (EDT)
In this ^A.M.BestTV episode, Robert Raber, A.M. Best senior financial analyst, and David Blades, senior industry research analyst, said the U.S. surplus lines industry experienced a downturn in underwriting results in 2015, with unfavorable prior-year loss reserve development on general liability business one of the key drivers. Click on http://www.ambest.com/v.asp?v=napslolist916 to view the entire program.

The two analysts authored a Best Special Report on the industry, titled, “Surplus Lines Financially Sound Despite Market Pressures and Economic Challenges.” To view the report, visit http://www3.ambest.com/bestweek/purchase.asp?record_code=253875 .

Despite the down performance from 2014, Blades said surplus lines companies did see an increase in net investment income, which helped companies’ record positive net income in 2015.

“When you look at the overall operating performance from the standpoint of the operating ratio, a metric that looks at underwriting and investment activities, the operating ratio for the surplus lines market was a few points better than that of the total property/casualty industry,” said Blades.

Raber said the use of reinsurance has helped the surplus lines sector blunt the impact of excess capacity, noting that “reinsurance companies are very happy to support surplus lines companies as they have a real appetite for the surplus lines type of business.”

Both analysts believe that the opportunities for the surplus lines sector exists in unmanned vehicles, the type of exposures that robotics will bring and in various forms of individual home deliveries.

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• Reinsurers Battle for Risk on a Wider Range of Fronts: A.M. Best analysts who follow the reinsurance industry explore insurers’ response to remaining relevant in the face of an ongoing soft market: http://www.ambest.com/v.asp?v=globalrepanel916.


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^A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View ^A.M.BestTV episodes at http://www.ambest.tv .

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.