The 2022 IBA 5-Star Professional Liability survey recognizes MGAs, carriers, and brokers who have excelled in broker relations, claims handling, underwriting expertise, and product quality. Despite a challenging past couple of years, the industry responded strongly, and the 5-Star Professional Liability winners are those who went above and beyond to deliver for their clients.
“The industry is very resilient and has fared pretty well during COVID,” Kirstin Marr chief analytics officer at Insurity. “For companies who weren’t really used to a remote workforce, a lot of them pivoted pretty well. You didn’t see a ton of disruption in the insurance industry’s ability to handle claims and to still have a strong financial performance.”
The respondents to IBA’s survey rated coverage as the most important detail when selecting a policy – all rated this a perfect 5, on a scale of 1 to 5. The next important were claims payment/processing (4.53) and underwriting expertise (4.47). Of least importance overall on the list was access to risk mitigation/risk evaluation partners, which scored 3.88.
Nick Hoadley, CEO of global insurance talent acquisition firm Insurance Search, says, “I think what we’ve seen over the last couple of years is that the insurance market is very solid and very stable. The reaction to the pandemic has been very strong, and the numbers posted, particularly by the agencies and brokers, have been very strong.”
“We are not interested in commodity-type coverage. We want to solve problems with innovation”
Peter Taffae, ExecutivePerils
Some winning product lines
Winning in the insurer category, Markel is determined to be a leader across all market segments. “To do that, a carrier needs to remember that customer needs and preferences – not the preferences of the underwriters – lead the direction of the market,” says Jim Gray, the firm’s executive underwriting officer. Some notable results, he explains, include Markel’s Cyber 360 product, products for the investment advisor community, employment practices/wage and hour primary product, and intellectual property lending support product.
In addition, Markel managing director Eric Amadori highlights large account risk management, D&O, and products for financial institutions. “We are known for providing steady, consistent capital throughout economic and industry cycles,” he explains. “Our strong reputation as expert knowledge-based, responsive and experienced underwriters and claims professionals differentiates our offerings in the marketplace, as does our ability to handle multiple projects for multiple clients. Our underwriting expertise and service are our competitive advantages.”
ExecutivePerils is a boutique wholesaler focused on D&O, EPL, cyber, and errors and omissions (E&O) and is a winner in the MGA and broker categories. “We have two national exclusives, both doing very well in both growth and loss ratio,” explains CEO Peter Taffae. “The oldest is FranchisorSuite, a dedicated comprehensive D&O, franchisors’ malpractice and EPL policy tailored to the unique exposures to franchisors, including vicarious liability and joint employer. Our second national exclusive is RE360, a D&O, EPL, fiduciary, cyber, and the following E&O: sales, leasing, property managers, property developers, construction managers, escrow, appraisers, auctioneers, title, lock box, and open house. The policy is extremely broad and has features unavailable elsewhere.”
The fact that these winners are updating and adding new product lines mirrors industry analysis by Marr, who describes how firms are focusing more on niche segments. She says, “Even if they have a book of business that covers a wide variety, they have to actually look at each segment of their book and run their risk selection and pricing in a much more granular, sophisticated way.”
“Creating a home for talented professionals to practice their craft is the key to keeping our competitive edge”
Jim Gray, Markel
Bastiaan de Goei, an industry leader with Instabase, expects technology to become even more vital. He says, “In the next 12 months, I expect large enterprise insurance companies to start really adopting ‘practical AI’ inside of their insurance operations. I’m talking about the practical use of these types of very advanced technologies, so in integrating advanced analytics and machine learning to handle core processes such as claims intake.”
Markel’s Pollaro says new technologies are already enabling the industry to do things that were unimaginable five to seven years ago. His colleague Amadori concludes, “Technology allows us to streamline underwriting efficiencies, providing solutions for our clients in a more knowledgeable and impactful way, while enhancing our customer experience.”
Pollaro also emphasizes Markel’s more than 45 years in the US professional liability sector. Of their model of operation, he explains, “Listen to our customers and distribution partners, and pay attention to trends and developments in legislation, the regulatory climate and litigation – that is where innovation for product development originates.”
It’s a corresponding story at ExecutivePerils. “We continue to look for opportunities where we can bring value, both to agents and underwriters,” says Taffae. “We’re not interested in commodity-type coverage. We want to solve problems with innovation. We currently have a third product in development that will be state of the art. Our business model is to solve problems with innovation.”
“Technology allows us to streamline underwriting efficiencies, providing solutions for our clients in a more knowledgeable and impactful way, while enhancing our customer experience”
Eric Amadori, Markel
Multiple perspectives on market developments
Both Markel and ExecutivePerils also have a similarly detail-oriented perspective. “Over the past two years, the professional liability market has worked toward pricing equilibrium and rate adequacy that had been missing for many years prior,” says Sal Pollaro, managing director of management and professional liability at Markel. “Certain lines of coverage experienced more variability, such as public D&O and cyber, and those rate and term/condition corrections likely reflected how wide the gap had been previously.”
At the same time, Amadori is focused on financial lines. He’s been concerned with derivative lawsuits related to board-level diversity, equity, and inclusion/environment, social, and governance, single case agreement industry trends and initial public offering/special purpose acquisition company (SPAC)/De-SPAC litigation, as well as increased legal expenses, the shifting regulatory environment, and the enhanced recession risk.
Gray says Markel has grown its premium base and clients. “Our ability to maintain a profitable book of business has benefited our clients by enabling Markel to service them as a stable source of capacity,” he says. “As multiple carriers have re-entered the market, pricing levels have been moderated, and an equilibrium has started to be achieved.”
And for Taffae, the past few years have been challenging due to less supply and more demand. “It has offered opportunities to think outside the box in order to secure the coverage insureds expected,” he explains. “Recently, with new markets entering the marketplace, most ‘clean’ accounts are having better renewal terms.”
Managing Director – National Practice Leader, Financial Institutions
Executive Vice President
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Director – Healthcare Practice Group
Senior Director – Healthcare Practice
Vice President and Professional Liability Practice Leader
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PL Risk Advisors
Executive Vice President
To select the best professional liability MGAs, carriers, and brokers for 2022, IBA enlisted some of the industry’s top experts. During a 15-week process, IBA’s research team conducted one-on-one interviews with specialist brokers, MGAs, and carriers and surveyed thousands more within its network to gain a keen understanding of what insurance professionals think of current market offerings. Brokers were first quizzed on what features they thought were most important in professional liability policies and then asked how the insurers they dealt with rated on those attributes. MGAs, carriers, and brokers were measured on the strength of their relationships with brokers, their ability to handle claims, their underwriting expertise, and, most importantly, the strength of the individual products they provide.