What’s happening in the excess casualty marketplace?
Paul Lucas 00:00:07
Hello arm. Welcome to Insurance Business TV, a special edition brought to you in association with Axis, Head of the WSIA annual marketplace. This is an addition made for us wholesale brokers as we examine the excess casualty market from some challenging loss trends to the risks of social inflation to the opportunities that might just be awaiting your business. And for that, we have a genuine expert in the field on board, Mike Flaherty, who is Head of Excess Casualty at Access North America. Mike, welcome to Insurance Business TV.
Mike Flaherty 00:00:40
Thank you, Paul, great to be with you today.
Paul Lucas 00:00:42
So Mike, to get us started, talk to us about the current trends within the excess casualty marketplace.
Mike Flaherty 00:00:48
Currently within the US excess casualty market, we’d see continued firming of the market, continued price strengthening, further limits. Moderation continues to take place, but I’d say generally, it’s a market that’s characterized by discipline underwriting across the market. So it, you know, creates a good, healthy opportunity for markets like ourselves, who, you know, being being experts and being active in the space we see, you know, tremendous opportunity in the current market.
Paul Lucas 00:01:21
All right, I like that line, tremendous opportunity, even though it is a challenging marketplace right now. So where specifically does Axis see the opportunities, and what is your strategy for growth?
Mike Flaherty 00:01:31
Well, we see opportunities across the broad spectrum of US excess casualty, you know, generally the you know, the effects of worsening loss trend, worsening severity trend, social inflation. I mean, these are broad and far reaching challenges and issues to the market. So we generally see the issue affecting the entire marketplace, where we function in the market with a very broad and diverse risk, risk appetite and a very broad and diverse portfolio. You know, on occasion, we will see particular areas of disruption and dislocation, and that’s where we can become. We can be the most useful is responding to those areas with the most disruption, the most dislocation, and stepping up and providing solutions within those class groups. So it’s, you know, it’s not any single particular area of us, casually, this challenge, it’s, it’s the entire product area. This challenge at this point, and, you know, creates a very much a broad and far reaching opportunity for us, areas where we’re looking to grow as well. One point I would highlight is brokers tend to think of us for the largest, most severity exposed business at low attachment. But what I would remind everybody is our capabilities go well beyond that. We write low attaching, mid attaching and high attaching business. We do enjoy participating in the middle market space. We do enjoy looking at some of the lesser hazard classes. They don’t have to be the biggest, the ugliest and the nastiest accounts to get our interest. We enjoy functioning across a broad category of risks in the market. So that’s one message I definitely would seek to convey.
Paul Lucas 00:01:53
Well, as you mentioned, the excess casualty market deals in tough risks. It’s what you do. So what is the outlook for the rest of 2024 and into next year as well? Of course, what are the risk factors that underwriters like yourselves are paying close attention to?
Mike Flaherty 00:03:40
Well, within the product area, I’m actually very bullish on the next 18 to 24 months. And you know, we’ve all seen and heard that the issues of the core issues of worsening loss trend, worsening loss severity, social inflation, nuclear verdicts, you know, adverse prior year loss development. These are ongoing issues that aren’t going away and and to be quite honest, the court system is still playing catch up to the, you know, the delays we saw during covid. So all of these are persistent and ongoing issues. They’re all areas of continuing concern. However, for us, I’d say they’re less of a concern, because we’re actually, we’re very comfortable functioning in that space. We’re comfortable underwriting in harsh environments. We’re comfortable in underwriting in areas that are particularly severity exposed, you know. So that, you know, that’s a really a great strength and Axis, and that’s a an area where we can really bring good solutions to the table and help our brokers out. Not everyone’s as comfortable as we are in this space, and you know, not everyone adjusted early to the to the new challenges of worsening loss severity and worsening claims trend. So we’re gonna you. Really a uniquely good position to capitalize on, on the situation going forward, and stepping up and being helpful, stepping up and providing solutions where, where others, other markets may not be available. I’m very optimistic about the near future in the product area.
Paul Lucas 00:05:21
I’m sure you’re looking for brokers to step up and join you at the WSIA conference as well. So tell us a little bit about your expectations for the conference. What do you expect that brokers will be asking about, and indeed, what will your messages be for them there?
Mike Flaherty 00:05:35
Well, Paul, we’re very excited for the upcoming WSIA conference. And you know, it’s always a great opportunity for us to get together with our brokers and talk about our mutual challenges in the current market and our plans for the future, our plans for growth. And in particular, I believe at this was here that us casley And us exit casli will be predominantly featured as a topic of discussion. Everyone’s aware of the significant ongoing challenges of, you know, lost trend, severity, trend, nuclear verdicts, social inflation, some carriers suffering from adverse prior year development. I mean, all of those really push the topic of us access casually to the forefront. So we’re eager to sit down with our brokers talk about our plans for the future. Again, I’m really optimistic about the opportunities that are lying in front of us in the next 18 to 24 months within this product area. I’m looking forward to a really productive conference.
Paul Lucas 00:06:41
I’m sure there’ll be many people enthusiastic to reach out to you, Mike. If you do want to find out more, you can reach out to Mike, or indeed, any of his excess casualty teammates. Huge thanks for your time, and we hope to see you at the annual marketplace as well. And of course, right here next time on Insurance Business TV.
