The most talked-about exposure in today’s emerging risk landscape is cyber liability – but according to Richard Robin, it’s been on NAS Insurance’s radar for almost two decades.
“We’ve been playing a role in cyber liability since 1998,” he says.
So how does Robin think brokers can better assist their business clients to secure appropriate coverage?
“The key to bringing on more insureds and really penetrating the market and managing the risk is education,” he says. “Markets should be educating brokers and providing tools for brokers to educate their clients.
“Some compare cyber to EPLI because it’s an ever-changing product,” he continues, “and that’s how EPLI was in the early days. But the major difference is that there’s no moral hazard really to cyber. There are negligence claims, but insureds aren’t buying cyber because they know that a claim’s about to happen. They’re buying cyber because they’re becoming aware of an exposure that, in the scope of time, has really come on quite recently.”
Robin joined NAS Insurance in 1994. Headquartered in Encino, California, the organization was founded in 1975; Robin’s father, former attorney Ed Robin, was the company’s original leader, and he remains the chairman of NAS Insurance more than four decades on.
Talking about why he embarked on an insurance career himself, Robin says, “I think I really decided to join the family business, and the family business happened to be underwriting insurance.”
In his 18 years with NAS, Robin says there have been two achievements that stand out above the rest. The first is the development of the company culture.
“The NAS culture really means sticking to our core principles of specialty insurance products, innovation, profitability for all and excellent service,” he says. “When we blend that with our strong London orientation and the fact that we’re a family business that has a legacy of giving back, our culture is really defined. “You can see it and feel it within the walls here at the business that, while we’re growing and vibrant and really exciting, we’re also a family business. People care about each other here, and they care about what’s going on in the world.”
Bringing the right people on board is the second accomplishment Robin singles out during his years at NAS.
“A lot of places say that they work hard and play hard,” he says. “I would say that we work hard and play hard, but we also embrace responsibility. We’re always trying to improve our business, and we’re trying to make things better for the market, and in order to deliver on all of those things, we’ve really needed to hire the right people.”
The best and the rest
When it comes to how the company sets itself apart from its competitors, Robin points to product orientation. “We don’t put ourselves out as owners of a specific distribution platform, but rather we manage a portfolio of products that you can only find at NAS,” he says. “I think about 65% of the premium we’ve produced is on products that NAS innovated and developed. Having an orientation toward products and then … cross-infusing NAS products makes our whole menu of products very distinct.
“If you buy a miscellaneous E&O policy from NAS, you’ll receive a sub-limit for cyber liability and a sub-limit for reputation harm that might result from a claim on the miscellaneous E&O. It distinguishes the product and puts the producing broker in a position where they really need and want to present our product.”
Discussing the current insurance climate, Robin mentions the significant amount of consolidation and the discussions around disruption that are occurring in the marketplace.
“Everyone in the chain is being asked to prove their value,” he says. “A few years ago, there was a standard commission for whoever was sitting at some place in the chain. That’s opened up.”
So how is NAS responding to those changes?
“We’re working with our production sources to develop in-house facilities for them,” Robin says. “For example, in our reinsurance division, we have reinsurance intermediaries who produce a substantial amount of ceded reinsurance into NAS, so we’ve worked with their London counterparts to place the business into Lloyd’s. So now, they’re involved in two steps in the chain rather than one, and I think by having these in-house facilities, it gets us greater attention on the corporate level. And so far, they’ve proven successful.
“On top of that, we’re investing in our systems and people to make sure that we continue to be nimble enough to pursue the best opportunities going forward.”
2016 and beyond
Robin says his focus over the next year will be on helping to make NAS the best insurance employer by institutionalizing the success the company has seen in recent years and scaling for the future. Additionally, he says NAS will continue its pursuit of a nationwide presence. “
A year and a half ago, we had one office. We now have four offices,” Robin says. “That nationwide presence started with our cyber division, but now we’re expanding it into our specialty division so that we really are closer to the business than we have been. We’re also strongly committed to our online product, NAS Online, which is a distribution model for all of our products that makes it very efficient.”
NAS will also continue looking at new products.
“We’re spending a substantial amount of time looking at enterprise risks,” Robin says. “Right now, cyber liability is the key exposure being underwritten by enterprise risk departments or being produced by those same brokers. “But there are other products involved such as product recall or IP products [and] reputation harm, and we’re spending a lot of time looking at those because we think that there’s a future there. There’s got to be some supply chain products that will be developed over the next decade that are responsive to just-in-time inventories. We’ve seen some claims in the marketplace that would legitimize products that would prevent some of those claims, or at least alleviate some of them.”