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.
Recent episodes of A.M.BestTV include:
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Jeff Goldberg, vice president, research and consulting, Novarica, said predictive analytics allows insurers to better underwrite individual risks, but could ultimately undermine the traditional business model of spreading risks over larger populations:http://www.ambest.com/v.asp?v=predictive916.
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The Rendez-Vous Conference: Reinsurers Adapting to an Unforgiving Market, A.M. Best Analysts Say: At Rendez-Vous, A.M. BestVice President Robert DeRoseand Assistant Vice President Greg Reisnerdiscuss how reinsurers have attempted to adapt to the increasingly competitive market by focusing their products on new technologies and geographic regions: http://www.ambest.com/v.asp?v=rvs5916nc.
The Rendez-Vous Conference: Insurance-Linked Securities Must Address New Risks or Face Slower Growth, Executives Say: At Rendez-Vous, insurance-linked securities (ILS) experts say the overall growth of ILS continues, but the quicker turnaround and lower costs of collateralized reinsurance have made it attractive to a larger pool of investors: http://www.ambest.com/v.asp?v=rvs4916nc.
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