A Crowded Market Leads to Claustrophobia


Growth may be diffi cult but that isn’t stopping new competitors from joining the fray. For carriers and brokers in the E&S market, that means they should never stop thinking about the possibility of new business combinations.


“Consolidation is absolutely inevitable. We’re already seeing examples of this both on the broker side and on the carrier side.” Matthew Power, Lexington Insurance Company


Slowing premiums hasn’t stopped new competitors from entering the wholesale broker segment, while specialty carriers remain on the lookout for new acquisitions, panelists report.


“We’ve already seen an awful lot of insurance assets for a variety of reasons out in the market, both in terms of sale or a potential merger,” Matthew Power said.


What may drive carrier consolidation is the opportunity to acquire relatively young competitors who have not found the levels of growth that looked more likely several years ago when they launched. Markets surged earlier in the decade, but have since settled into a prolonged soft glide.


“We’ve got to make sure the retailer and the markets see that we’re adding value and we’re adding special skills,” Steven DeCarlo said.”If we’re going to do business the old fashioned way we’re not going to win.”


Copyright © 2010 by A.M. Best Company, Inc. All rights reserved. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means; electronic, mechanical, photocopying, recording or otherwise.


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