National Underwriter's Guide to the E&S/Specialty Lines News


Lloyd's Breaking Free Of Paper Shuffle With U.S. E&S Partners

"Coverholder business has become an absolute priority for Lloyd's," according to Adam Stafford, senior project manager of market operations for Lloyd's, who explained a key force behind the push to standardize collection of data for U.S. E&S risks at the centuries-old institution.

"The overriding goal is to make the lives of our MGA partners easier," he said, explaining that U.S. MGAs underwriting business in the United States on behalf of Lloyd's, known as U.S. coverholders, will be encouraged—but not required—to use new standards already in the works and set to be completed by the end of the year.



First-Half 2010 E&S Premiums Decline
Premiums written by the U.S. excess and surplus lines market fell nearly 5 percent to $11.5 billion in the first-half of 2010, according to a report prepared by Highline Data exclusively for National Underwriter last week. If a harder insurance market or some economic improvements do not come together to drive E&S premiums up dramatically in the second half of this year, the segment will suffer a record-setting four straight years of premium declines.

Flood Of New Patients Could Overwhelm Doctors, Hike Claims
Health care reform "is going to change everything" for medical professional liability insurers—and not necessarily for the better, warns the top executive of one of the largest writers of the coverage in the United States. Adding 30 million people to the health care system without the appropriate number of primary care doctors to treat them is a recipe for frustration—and "that's one of the things that drives lawsuits against physicians," said W. Stancil Starnes, chief executive officer of ProAssurance, speaking at an investor conference recently.

Feds Upgrading Safety Monitoring, Putting Truckers, Insurers On The Alert
A new government system monitoring motor-carrier safety will achieve a long-term goal of reducing crashes, experts agree, but it may have a short-term impact of driving up loss severity for inattentive insurance carriers, some warn, referring to the Comprehensive Safety Analysis initiative being rolled out this year by the Federal Motor Carrier Safety Administration (FMCSA), a division of the U.S. Department of Transportation.

Big Reserve Takedowns Could Signal Trouble For Med Pro Liability Insurers
Over the past five years, medical professional liability insurers have released billions of dollars in prior-year reserves, according to Richard Lord and Stephen Koca, two consulting actuaries from the Los Angeles office of Milliman, who review that pattern of reserve takedowns for recent years and their impacts on overall combined ratios.

ACE Spending $1.1B For U.S. Crop Biz, $200M For Malaysian Firm
Earlier this month, Zurich-based ACE Ltd. announced it plans to spend $1.1 billion to buy the 80 percent of Rain and Hail Insurance Service that it doesn't already own, increasing ACE's participation in a business that is not correlated to the property and casualty insurance cycle. In a separate announcement, ACE said it would buy a Malaysian insurance company for $200 million.

Coming Up Next Month
In October, National Underwriter magazine and NU's E&S Extra e-newsletters will provide full coverage of the annual meeting of National Association of Professional Surplus Lines Offices, Ltd.—with pre- and post- conference reports featuring member views of broker consolidation trends, discussions of market conditions and the implementation of surplus lines reform measures. The Oct. 11 print magazine will also provide an update of the specialty program business market.

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