A.M. Best Special Report: Direct Premiums for Surplus Lines Market Remained Flat in 2005.OLDWICK, N.J. -- Direct premium volume for the surplus lines insurance market remained relatively flat in 2005 as it did in 2004, after growing significantly during the three prior calendar years. The significant growth had been a consequence of the hardening hardening, in metallurgy, treatment of metals to increase their resistance to penetration. A metal is harder when it has small grains, which result when the metal is cooled rapidly. market conditions from 2001 into 2004, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. A.M. Best Co.'s Surplus Lines Market 2006 report. The five main sections of the report--State of the Market, Financial Condition, Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. and Impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. Trends, Regulatory Landscape and Distribution--have been updated or revised to reflect current industry and market trends. The surplus lines market is made up of property/casualty insurers that provide insurance unavailable to consumers in the standard, or admitted market due to the unique characteristics and needs of the consumers. As a result, the surplus lines market is known for aiding insurance agents and brokers by providing coverage solutions for these policyholders in addition to developing new and creative types of coverage. The softening trend in the overall insurance industry, as noted in the report, began in the latter part of 2004. It impacted the growth of the surplus lines market overall, although it did not have a marked impact on smaller and, in some cases, middle-market surplus lines risks in terms of average rates and pricing. The current market softening trend does not extend to coastal property risks. The extremely active windstorm wind·storm n. A storm with high winds or violent gusts but little or no rain. windstorm A storm with high winds or violent gusts but little or no rain. season during the second half of 2005 spawned several hurricanes, primarily hurricanes Katrina, Rita and Wilma, that caused significant property damage throughout the southern part of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . These storms affected both primary and reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. companies and isolated the coastal property segment of the insurance market as not reflecting the overall move toward a softer market. The magnitude of these storm losses has led directly to substantially diminished capacity This doctrine recognizes that although, at the time the offense was committed, an accused was not suffering from a mental disease or defect sufficient to exonerate him or her from all criminal responsibility, the accused's mental capacity may have been diminished by intoxication, being offered to primary insurers by reinsurers and has contributed to the greater focus that now is placed on aggregate exposure management and enterprise wide risk management. Larger insurers (as measured by direct premium) continue to dominate the surplus lines market. Size and flight-to-quality trends benefited the larger, well-established surplus lines carriers during the hard market, with the top 25 groups commanding an 82.5% share of the market in 2005. Despite rising loss costs, modest investment yields and decreasing rates on most lines of business, A.M. Best expects surplus lines industry results to remain strong. Solid profit opportunities remain for the well-established and start-up companies start-up company A new business. that have implemented effective strategies to target small and middle-market risks that are less price sensitive than the large, high-premium policies. BestWeek subscribers can download a PDF (Portable Document Format) The de facto standard for document publishing from Adobe. On the Web, there are countless brochures, data sheets, white papers and technical manuals in the PDF format. copy of all full special reports at no additional cost or a combination of the PDF copies plus all related spreadsheet files of the report data at no additional cost from our Web site at www.bestweek.com. Nonsubscribers can download a PDF copy of the full special report (44 pages) for $110 or a combination of the PDF copy plus the spreadsheet file of the report data for $330 from our Web site at www.bestweek.com. Call customer service for more information, (908) 439-2200, ext. 5742. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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