Wes Robinson entered the excess & surplus lines property insurance market at a pivotal moment in history. It was May 2002, just eight months after 9/11, and the United States was still trying to recover from the impact the attacks had on the capital markets.
“The timing was interesting because it was right after 9/11, and a lot of business was starting to surge toward the E&S market,” Robinson says. “I took what I saw as a very unique opportunity in a field that I was not overly familiar with.”
As an underwriter, prior to joining RPS, I had to say no a lot – and I don’t enjoy saying no,” he says. “I knew that in the E&S market, no was not an option; we had to find solutions. Everything we work on in the E&S market is difficult for any number of reasons. If it has landed on our desks, that means it’s complicated. Our job is to provide solutions for these risks. Every deal is like a puzzle that we need to solve – that’s what sounded really interesting to me back in 2002, and it’s still what captures my attention today.”
Fast-forward nearly 20 years, and Robinson is still with RPS, today serving as the national property brokerage president. In that time, he’s seen gross written premium in the E&S market increase from roughly $9 billion in 2002 to $41 billion in 2020.
The growth he first witnessed in 2002 following the 9/11 attacks is somewhat similar to what the E&S market is experiencing now due to another systemic event: the COVID-19 pandemic.
“It’s hard to analyze and draw lines from one event to the other, but I would say the market has responded in a similar way in that capacity has been impacted, lines are being cut down, rates are going up, and it’s being felt on all lines of insurance,” Robinson says. “But there are some differences – 9/11 was a localized event from a geographic perspective, but it caused significant reverb through the capital markets on the insurance side. Meanwhile, the COVID-19 pandemic has impacted every single business in the United States, from Main Street all the way up to corporate America, and that will have a trickle effect on the insurance industry.”
What remains to be seen is how the industry will respond to COVID-19 with product innovation and potential solutions for pandemic risk. In 2002, when Robinson entered the E&S space, terrorism insurance wasn’t mainstream. It wasn’t until the Terrorism Risk Insurance Act (TRIA) was passed in 2002 that the industry really had to start engaging with terrorism exposure. Within a few short years, the E&S market had taken things a step further, offering private, standalone terrorism insurance with broader coverage and more attractive premiums than TRIA.
“In the E&S industry, we’re always looking to innovate and make adaptations and changes where necessary,” Robinson says. “Since developing standalone terrorism insurance, the market has now created specific coverage for active shooter risk, [and] we also have riot, strike and civil commotion coverage. A lot of these things weren’t even part of the conversation back in 2002, but they’re examples of how the E&S industry reacts to problems and finds solutions.”
Post-COVID-19, the big question mark hovers around pandemic insurance, which isn’t actually a new product – but is one that has historically been unaffordable and unattractive.
“If we can figure out how to build a solution that is scalable, affordable and easily available to anyone who wants it, that will be a home run for the insurance industry,” Robinson says. “I do expect this to come out of the E&S space because that’s what we’re good at.”