Professional Insurance Professional Insurance Wholesalers Wholesalers Association of NYS Association of NYS Surplus Lines Market Review Surplus Lines Market Review David S. Blades, CPCU David S. Blades, CPCU Senior Financial Analyst – P/C Senior Financial Analyst – P/C Ratings Ratings September 24, 2009 September 24, 2009
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Professional Insurance Wholesalers Association of NYS Surplus Lines Market Review
Professional Insurance Wholesalers Association of NYS Surplus Lines Market Review. David S. Blades, CPCU Senior Financial Analyst – P/C Ratings September 24, 2009. 2008 Surplus Lines Market Highlights. Direct Premium Written declined by the largest percentage since 1988. - PowerPoint PPT Presentation
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Professional Insurance Professional Insurance Wholesalers Wholesalers
Association of NYSAssociation of NYSSurplus Lines Market ReviewSurplus Lines Market Review
Direct Premium Written declined by the largest percentage Direct Premium Written declined by the largest percentage since 1988.since 1988.The combined ratios rose due to weather-related losses on The combined ratios rose due to weather-related losses on natural-catastrophe exposed business.natural-catastrophe exposed business. Favorable loss reserve development reduced the combined Favorable loss reserve development reduced the combined ratio by 10.7 points.ratio by 10.7 points. Total investment losses of 161.3 million were generated, Total investment losses of 161.3 million were generated, after a $2.38 billion investment gain in 2007.after a $2.38 billion investment gain in 2007. Policyholder’s surplus for the surplus lines market as a Policyholder’s surplus for the surplus lines market as a whole declined for the first time since 2001.whole declined for the first time since 2001. Despite the aforementioned negative factors, the surplus Despite the aforementioned negative factors, the surplus lines market generated a profit in 2007, albeit that profit lines market generated a profit in 2007, albeit that profit represented a 67% decrease, year-over-year.represented a 67% decrease, year-over-year.
Surplus Lines Composite vs. Total Surplus Lines Composite vs. Total P/C IndustryP/C Industry
Combined RatiosCombined RatiosU.S. E&S Profit Companies vs. P/C Industry – Combined Ratios (1995-2008)
Key Federal Legislation Impacting the Key Federal Legislation Impacting the Surplus Lines MarketSurplus Lines Market
Non-admitted and Reinsurance Reform ActNon-admitted and Reinsurance Reform Act Passed by the House on 9/9/09; Expected to be voted on in the SenatePassed by the House on 9/9/09; Expected to be voted on in the Senate
National Association of Registered Agents and Brokers National Association of Registered Agents and Brokers Reform Act (NARAB II)Reform Act (NARAB II) Reintroduced in the House of Representatives in 2009Reintroduced in the House of Representatives in 2009
Insurance Information Act of 2009Insurance Information Act of 2009 Rep. Paul Kanjorski, D-Pa, introduced the bill in May of 2009Rep. Paul Kanjorski, D-Pa, introduced the bill in May of 2009
Insurance Industry Competition Act of 2009Insurance Industry Competition Act of 2009 Reintroduced in the House of Representatives in March of 2009Reintroduced in the House of Representatives in March of 2009
National Insurance Consumer Protection ActNational Insurance Consumer Protection Act Introduced in the House of Representatives in April of 2009; the Introduced in the House of Representatives in April of 2009; the
Senate has yet to introduce a companion billSenate has yet to introduce a companion bill
Current Distribution Issues Impacting Current Distribution Issues Impacting the Surplus Lines Marketthe Surplus Lines Market
The Impact of the RecessionThe Impact of the Recession Submission Activity has Increased but Revenue is Submission Activity has Increased but Revenue is
DownDown The Admitted Market is still Competing The Admitted Market is still Competing
Aggressively on Some traditional Surplus Lines Aggressively on Some traditional Surplus Lines BusinessBusiness
Mergers and AcquisitionsMergers and Acquisitions Utilizing Current Market Conditions to Spark Utilizing Current Market Conditions to Spark
InnovationInnovation Outlook (Near-term)Outlook (Near-term)
U.S. Admitted Companies vs. Surplus U.S. Admitted Companies vs. Surplus Lines – Annual Impairment Count Lines – Annual Impairment Count
(1977-2008)(1977-2008)
U.S. Admitted Companies vs. Surplus Lines – Annual Impairment Count (1977-2008)