David Nelson (pictured), executive vice president of E&S Wholesale at Nationwide, is forthright about the surging relevance of the excess and surplus (E&S) lines property insurance sector. Once considered a niche for unusual risks, the market is now emerging as a critical release valve for an overburdened admitted market grappling with mounting catastrophes.
“We’re seeing this across the board – more frequent and severe natural disasters,” Nelson said in a recent interview, pointing to hurricanes and wildfires as key stressors. “Reinsurance costs and their impact on carrier balance sheets from some of these catastrophes have really pushed business back into the E&S space.”
As traditional carriers retrench, voids in coverage widen. For Nelson, this is where E&S proves its worth. “It’s about knowing exactly what we want to write – and, just as importantly, what we don’t,” he said. “Our aim is to protect our brand and our financial strength with clarity and discipline.”
The hallmark of the E&S market has long been its agility. For Nationwide, that agility is rooted in constrained distribution and targeted products. “It allows us to introduce specialized coverage for unique exposures – say, high-risk properties in disaster-prone regions,” Nelson said.
But speed must not come at the expense of prudence. “It’s not about writing everything,” he said. “We’re focused on growth that aligns with our brand and trusted partnerships.”
Affordability, especially in catastrophe-exposed states like Florida and California, remains a pressing concern. Nelson advocates for broader collaboration across stakeholders – from consumers to regulators to carriers. “We talk a lot internally about watching the affordability of insurance,” he said. “That includes risk mitigation, regulatory reform, and ensuring that pricing accurately reflects risk.”
Nelson emphasized that E&S growth must be underpinned by data intelligence and underwriting precision. “You need to use data and tools to ensure you’re pricing risk appropriately,” he said. “That’s critical to long-term sustainability.”
Technology, he stressed, is not a buzzword – it’s foundational. “We’re leveraging data to support our specialized talent. Underwriters need flexibility, yes – but they also need expertise.”
That expertise, in his view, is what distinguishes sustainable carriers from opportunistic ones. “Those who are empowered to underwrite need deep experience and insight,” Nelson said. “It’s not enough to be fast – you have to be smart.”
For Nelson, E&S is no longer a fallback; it’s an integral component of the insurance ecosystem. “There’s always going to be a need for E&S offerings,” he said. “It’s a vibrant, expanding market.” He likened the sector to a pressure-release valve – absorbing risks that standard carriers can no longer manage.
Regulatory developments, particularly in states like Florida and California, are being closely monitored. “I’m hopeful that reforms at the state level will ultimately help consumers and bring more clarity to the market,” Nelson noted.
Even beyond disasters and regulation, macroeconomic forces are reshaping underwriting assumptions. Tariffs and commodity price swings – especially in materials like steel and lumber – pose additional challenges for pricing accuracy.
“We’ve had internal discussions around how tariffs could impact overall costs,” Nelson said. “It’s something we need to watch closely and factor into the pricing environment.”
Ultimately, Nelson made it clear that Nationwide’s presence in the E&S space isn’t a pursuit of temporary gains. “This isn’t about chasing a hard market,” he said. “It’s about building a financially stable and viable business that matches risk with price.”
