Despite Berkshire-Hathaway’s entrance into specialty insurance business, standard markets are still the players most capable of changing the dynamics of the surplus lines market, executives said Wednesday, with one identifying Travelers as a dominant competitor.
Executive SummarySpecialty insurance executives speaking at the Keefe, Bruyette & Woods insurance conference said there's room for Berkshire-Hathaway in the U.S. E&S market, with one saying that Travelers—not Berkshire—has replaced AIG as the elephant-sized competitor that can change market's dynamics.
During separate presentations at the Keefe, Bruyette & Woods Insurance conference in New York, which was simultaneously webcast, executives of Navigators Group, RLI Corp., and Validus Holdings were among those who responded to questions about Berkshire-Hathaway Specialty Insurance and Berkshire’s sidecar deal with Aon at Lloyd’s.
“It’s a big world of competition. There are plenty of competitors that we butt heads with,” said Stanley Galanski, chairman and chief executive officer of Navigators, noting that the names of the competitors change periodically over time. “What really drives the E&S market is poor underwriting performance by the standard lines carriers who get into classes of business that they don’t understand.”
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