The Excess & Surplus (E&S) Insurance market is seeing incredible growth, driven by high-risk events such as climate disasters, COVID-19, and supply line challenges. In fact, E&S premiums exceeded $31 billion in just the first half of 2022, with further growth expected throughout 2023.
Why is this specialty market growing so quickly, and what do you need to know about E&S Insurance before investing?
What is Excess & Surplus Insurance?
Risk can be difficult to place, especially in fast-moving spaces such as emerging markets. This makes it difficult for standard insurers to provide coverage.
When standard carriers don’t cover something, E&S Insurance is available to protect an organization. This specialty type of insurance is obtained from an insurer that isn’t licensed in your state, giving the insurer increased flexibility to provide coverage for risks that the traditional insurance market would avoid.
Who needs Excess & Surplus Insurance?
Essentially, E&S Insurance is ideal for businesses with a uniquely high risk that the traditional insurance market won’t cover. The wide variety of coverages available ensures businesses with any level of risk can still obtain insurance. The industries these businesses operate in vary greatly, from construction to daycares.
One appeal of an E&S policy is that it is written out-of-state. This means these policies have far more flexibility than in-state coverage, providing insurance for high-risk companies while forgoing some protections in-state coverage offers.
Also read: Parametric Insurance: Protect Your Business from Elevated Hurricane Risk
What has driven the rapid growth of the E&S Insurance market?
Estimates placed the growth of the market for this type of insurance at a 5% annual compound rate between 2021 and 2023. The main reason for this growth has been an increase in the demand for highly specialized protections against emerging risks, such as:
- Cyber-attacks
- Liability coverage
- Climate events
- COVID-19
With this growth comes increased competition, meaning businesses will benefit from increasingly high-quality insurance brokers working with them to help understand the best rates available.
Also read: The Effects of Inflation on the Insurance Industry
Unique packages for every company
E&S insurers are uniquely placed to adapt rapidly to changing conditions, making them able to provide affordable and specialized coverage that meets the needs of any insurer when the traditional insurance market fails to deliver.
From mobile homes to multinational oil companies, businesses will benefit from packages tailored to them that are built for their needs. As the specialty market evolves and grows, insurance companies will react quickly to maintain their flexibility and adapt to market changes. However, as more insurance companies enter with their E&S insurance offerings, it is more crucial than ever that businesses work with established, veteran insurance companies experienced in dealing with problematic exposure to loss.
Protect your business with E&S insurance from McGowan Risk
The McGowan Risk Specialists Marine and E&S Division is a Managing General Agent and Wholesale Surplus Lines broker. It serves retail insurance brokers for all their clients, providing broker partners and their clients with the top markets and the best service possible.
Through McGowan, Excess & Surplus Insurance provides coverage in multiple classes, including:
- Marine: From private pleasure use boats and yachts to ship repairers and vessel builders, McGowan provides coverage with carefully selected carrier partners.
- Commercial Property & Liability Admitted and E&S: Available in Indiana, Illinois, Michigan, Missouri, Ohio, Pennsylvania, Tennessee, and Wisconsin, McGowan provides E&S insurance coverage for hotels/motels, contractor liability, and more. All carrier partners are guaranteed A.M. Best “A” Rated or Better.
Contact a McGowan Risk underwriter today to learn more about the McGowan Risk Specialists Marine and E&S Division.