How to pick an E&S carrier: Four characteristics to look for

As published in Insurance Journal

The excess and surplus market is growing rapidly. Business is being driven from the admitted market due to actions taken in response to significant weather events, rising casualty loss severity driven and other emerging issues related to, or exasperated by, the COVID-19 pandemic.

As a result, retail agents increasingly must procure both admitted and non-admitted products for their customers in order to create the necessary comprehensive coverage solutions. At the same time, carriers are expanding and enhancing their E&S offerings to better serve accounts and maximize their relationships with direct access, creating more strategic opportunities to place their E&S business.

How can independent agents maximize the benefits of placing business directly with a carrier with E&S capabilities? By partnering with a carrier with the following characteristics.

Four things to look for in a carrier partner

  1. Appetite alignment: When a carrier’s surplus lines appetite is a natural extension of its standard lines appetite, it can provide coverage for a broad range of exposures with a single carrier. Pairing standard lines and E&S product offerings in tandem enables agents to deliver a more holistic, account-driven solution and provide a more seamless client experience, while improving the efficiency of the placement process.
  2. Diversified portfolio: Experienced carriers understand the value of a well-diversified and balanced portfolio that seeks to mitigate loss severity and produce consistent results over time. This allows a carrier to provide consistent support without having to make radical shifts in underwriting practices, offered capacity, terms or pricing. Carriers that are over weighted in a certain line or class of business may experience much greater loss volatility, which may impact their ability to offer the same level of support year-over-year if that specific line or class of business sees results significantly deteriorate.
  3. Customer service center support: Carriers with customer service centers capable of handling both standard and E&S small business policies can help agencies effectively service these thinner margin policies and improve their economics. This saves agencies valuable staff time, creating capacity to generate critical growth. It also eliminates the need to choose between the unfavorable options of either splitting the servicing of small business accounts or retaining servicing responsibilities for the full account.
  4. Value added solutions: When coverage is bound directly with an E&S carrier, an in-house broker can administer the collection and filing of surplus lines taxes and fees. This offers retail agents without surplus lines licenses the compliance that is required. Additionally, expanded billing options, such as direct bill, online bill payment and installment plans are often available. Combined billing also may be an option when coverage includes both standard lines and E&S products.

The Hanover difference

The Hanover is a carrier partner that offers retail agents non-admitted solutions for accounts with moderate to challenging exposures that are in, or are headed to, the E&S market, through Hanover Specialty Insurance Brokers (HSIB), our in-house E&S brokerage. When coupled with our standard lines offering, agents can provide admitted and surplus lines solutions on a single account, eliminating the need to piece together a comprehensive solution. Beyond a simplified placement process, this integrated approach means a more streamlined claims process, coordinated loss control services and combined bills with multiple billing options, and more.

The E&S market will only continue to grow and evolve, and the right carrier partnerships can help agencies effectively navigate changing tides, while making it easier for agents to service accounts and maximize their relationships.


Steven Mills headshot


About the author

Steven M. Mills currently serves as The Hanover’s president of excess and surplus (E&S) business. In this role, Steve leverages the company’s broad and innovative capabilities to deliver E&S solutions for businesses, making it easier for The Hanover’s agent partners to serve the needs of their clients.