ASIC CEO Barder: Covid, PE and MGA momentum behind E&S growth

AM Specialty Insurance Company (ASIC) CEO Shevawn Barder has cited Covid-19, private equity capital and the thriving MGA space as key drivers behind the “incredible growth” the E&S market has experienced, which she anticipates will continue.

Commenting specifically on the pandemic, Barder explained that because the E&S space doesn’t face the same regulatory burdens as the admitted market, it was able to fill a demand gap that emerged.

Speaking on The Insurer TV’s Close Quarter programme, she said: “I believe Covid was a major contribution to the expansion of the E&S space. As Covid spread and people were forced to work remotely, segments of the market slowed down from an administrative standpoint, but the demand continued to be strong.

“As E&S insurance risk is less regulated than the admitted market, it filled that demand gap,” she added.

And with private equity also providing capital to the E&S market, Barder said: “It’s really influencing this space – it's manifested change that will continue to develop.”

But it’s the role of MGAs that has moved things forward “rapidly and quite significantly” in the E&S market.

“There are now more sophisticated MGAs writing quality business in diverse segments of the market and this plays to the strengths of the E&S market as it allows it to absorb more business and further expand,” she said.

“As MGAs become more sophisticated, they absorb more classes of business from the broader market, and they take this in and control it,” she said, citing cyber as a great example of this.

“I also think now inflation is going to pick up that baton and carry it forward. At a time when capacity is extremely tight, I believe the overspill will tip into the E&S market, and it will be more innovative and respond to this demand,” added Barder.

Behind the launch

AM Holding Company announced the launch of ASIC, an Arizona-authorised domestic E&S lines carrier and accredited reinsurer, in October last year.

The new entity sits alongside the group’s other insurance subsidiaries, AM RE Syndicate and AM Star Claims, under the AM Holding Company umbrella and can write business using its own capacity as well as on behalf of other reinsurers.

Talking about the launch of ASIC, Barder said: “The E&S space is in our DNA. We've worked in the E&S market now for many years serving different segments of the market and we’ve had significant first-hand experience of the fronting space.

“With the launch of ASIC, and as a result of our many years of experience in the market, we feel that we can bring value to the program market with a hybrid fronter that provides paper, but also has the ability and confidence to retain risk.”

She added: “With our Lloyd's technical underwriting expertise, we look at fronting as more than a credit risk. It's very important to have technical underwriting capability to ensure that programs are run with discipline, and according to the underwriting guidelines.”

Watch the 8-minute interview with ASIC’s Shevawn Barder to hear her thoughts on: