US insurance giant Nationwide is planning to build out its broker-placed excess and surplus lines (E&S) and specialty business and has a target of generating some $1bn of premium from the sector by 2023.
The company’s existing E&S brokerage business currently generates around $250mn of premium, but Nationwide is seeking to increase that fourfold by 2023.
Nationwide E&S/Specialty currently operates three pillars – contract binding, programs and brokerage underwriting. The contract binding business produces $1.5bn of premium, while programs accounts for circa $1.3bn.
As Tom Jurgens, senior vice president for Nationwide E&S/Specialty’s brokerage underwriting arm, told The Insurance Insider during the Wholesale and Specialty Insurance Association’s annual conference in San Diego, California, the company wants to balance out its portfolio. That will see the company focus on expanding its presence in the brokerage-placed segment.
“We’ve thought about how we can be a bigger brand in the brokerage space,” he said. “We’ve thought about what products we want to write and what do we have to do differently to be a bigger player in the space.”
Key to the planned growth is talent, Jurgens explained. Nationwide E&S/Specialty is in the process of building a team of market specialists to help achieve its goal.
To that end, the company has already started to bring in experienced individuals to support the buildout, with Mike Denton appointed chief underwriting officer for property brokerage earlier this month.
Denton was previously executive managing director for US property at IFG Companies.
As Jurgens explained following Denton’s arrival, the appointment has been made as Nationwide E&S/Specialty targets “aggressive” growth across the division.
Nationwide is now searching for individuals to lead its primary casualty and excess casualty offerings.
The property division can provide capacity in excess of $100mn, while excess casualty limits can go up to $25mn.
Whereas in the past, Nationwide E&S/Specialty had sought to work with multiple wholesalers, Jurgens said the company has cut back on the number of relationships it has is in the sector. Now, the carrier will look to work with a more select group of wholesalers and individuals who have repeatedly provided it with strong and well performing submissions.
“What makes us different is the longevity in the marketplace and the brand reputation," Jurgens told The Insurance Insider.
“We are attracting talent because they want to work for a company that’s committed to the market, and has the capacity and strength we can offer,” he added.
“Nationwide is in such a strong position right now, and it has made a commitment to growing in the E&S space. The feedback from brokers has been very positive.”
Nationwide has been writing E&S business for more than 35 years under the brand of Scottsdale Insurance Company. In 2016, Nationwide amended the names of all its sub-brands to reflect the parent company’s ownership. Nationwide E&S writes its E&S protection on Scottsdale Insurance Company paper.
According to the latest figures from S&P Global Market Intelligence, Nationwide was the fifth largest player in the E&S segment come the end of 2019’s second quarter with $512mn of direct premium written (DPW).
AIG and its E&S-focussed platform Lexington lead the market with $991.5mn of DPW during the second quarter of 2019.