Over the past couple of months, there have been reports of an E&S growth spurt as its market hardens on many lines. Business Insurance describes the market as reducing limits while raising prices, and Insurance Journal reports on E&S premium growth. Others may ask how much of a boom we are going to see during this E&S growth cycle, which is a viable question. But I think a great question to ask E&S insurance CIOs is if the E&S market in the US is booming, what technology solutions can you pursue to leverage the booming market?
The answer? Everything. Or at least something.
E&S lines are notorious for two things: speed and flexibility. Speed because markets that are less regulated are freer to adapt to market forces. Flexibility because markets that are specialized require unique terms, conditions, forms, and rates that, along with speed, create the mantra for growing business, managing risks, and reducing costs.
There are some interesting technology trends on the rise within this segment—API strategies between brokers/MGAs and E&S insurers. A driving force supports this trend: the quick transition of the insurance industry moving to the cloud, which is API-happy and supportive of integration, making it easier, faster, and cheaper in the long term to connect via web services.
Another trend is the sudden interest of brokers and MGAs in connecting for rating, quote proposals, and binders. MGAs in particular have been an interesting force in requesting web services connections. MGAs “with the pen,” after all, have to rate their own quote requests, providing their own core MGA technology—and where better to get accurate premium calculations than the insurers’ rating engines. Improving the quality of data will be a welcome trend in the months and years to come.
Lastly, many E&S insurers now offer direct small business portals for quoting and binding on various niche lines of business across casualty, excess, and E&O segments. After all, many brokers know exactly where to go when they are ready to bind small business transactions on certain lines of business.
Traditionally, E&S/specialty insurers have been hesitant to invest in IT, preferring to capture short-term rewards, but now is a better time than ever to make a business case for investing to prepare for leaner times.
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