Subscribing to Part of the Risk is the New Standard, Not the Exception… and That’s a Good Thing

April 08, 2021

The global pandemic has certainly impacted the capacity available and the pricing in both the property and casualty markets. However, let’s not forget that the shift to reduced capacity and rising rates started early in 2019 and only intensified as a result of Covid-19.  This storm has been building for some time and while the pandemic has increased its momentum, it was always something we were going to have to deal with.

Changes to global weather patterns continue to impact property markets as 1 in 500 or 100 year forecasted events increased to 1 in 50 or even 1 in 10-year frequencies. Wildfires, floods, wind, hurricanes, earthquakes – all these perils have caused significant losses to the industry and markets have had to look at how they allocate their capacity, how much they want to allocate, and to where.

Additionally, investment income has been reducing year over year for insurers, while treaty insurance and reinsurance costs have been steadily increasing.  All of these factors were coming into play prior to the pandemic and made the challenges facing insurers much more difficult. 

As a result, rates went up and insurers were forced to reduce the limits they were willing to put on a single risk, fearing a full catastrophic loss.  This in turn left brokers trying to bridge the gap turning to new markets and MGAs to write pieces of risk that historically would have been written by a single market. 

Of course, it isn’t always easy; the workload for brokers has increased as they search the marketplace to find new partners.  It’s important that we’re proactive as an industry and MGAs can fill an important role by subscribing to bridge the gap and pick up some of the risk. For example, Excess has been able to secure property capacity and we’re using it to support our brokers and ensure that their clients continue to have the coverage that they require.

This subscription dynamic is how our industry is evolving. While some view it as being forced upon the industry, we believe it represents a more balanced opportunity to mitigate risk, creates stability across the market by reducing exposure, and allows our industry to respond to a need by sharing and working together. This is a good thing.

Here’s how Excess can help…

Excess has property capacity to help our broking partners ensure that all of the bricks are covered.   When you can’t cover the entire risk, we can help.   

We can write across most jurisdictions (excluding Quebec, NWT, Nunavut).

We rate on our own terms and will provide lead or follow capacity through our London Syndicate(s) on the following:

  • Buildings under $50,000,000 Total Insured Value
  • We can take up to 20% of the total risk – maximum participation $10M* (risk dependant)
  • We can write on broad form or named perils wordings
  • We can look at accounts that have claims or non-payment issues
  • We can subscribe on a large array of building types and occupancies including:
    • Vacant properties
    • Residential and commercial realty
    • Manufacturing
    • Wholesale
    • Retail

If you’re a broker looking to bridge the gap on a risk for your clients, send us a completed application and any lead terms if you have them and we’ll go to work for you.

Contact us at: quote@excessunderwriting.ca

Note: We can’t subscribe when any of the following occupancies are in the building: woodworkers, plastics, recyclers, tires, storage, and buildings that have bars/pubs.

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