The wholesale insurance sector has been boosted in recent years by investment from pension funds and other sources. These new investors have been attracted by the relatively high yields available and it means that the wholesale sector has capital reserves.
How is the sector faring generally, though, and what are the current and emerging challenges?
Curtis Anderson is President of MGA/Binding with
Risk Placement Services and says there’s a firming of the market for the transportation industry as more truckers are back on the roads following the downturn but it is severity rather than frequency of claims that is increasing. He also notes a lot of business surrounding the coastal areas:
“There are a lot of people concerned that we will see more hurricanes. The two storms that were aimed at Hawaii did cause damage, it mainly hit one side of the big island but there have been claims.”
Although this year has not brought a high level of hurricane activity, Anderson says that the wholesale sector is well placed to cope in the event of that changing due to the increased capital reserves.
While the transportation and property lines have always been big business, there are two areas that have not been high on the list for most businesses until more recently. The environment poses a growing natural threat, while the other is manmade:
“Anything to do with cyber and technology, from social media to your system failing or being hacked. There are some very professional people who are selling in that growing market place.” Anderson says.
Asked if the wholesale sector feels any pressure from brokers and agents to lower prices, he says that the pressure comes from consumers looking for the best deal but it can’t always be about cost: “you can’t always give the best coverage and the cheapest price,” he says “it should be about being competitive.”
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