As the management liability segment appears poised for rate increases, it would not be a surprise to see some carriers begin to make a push to get into this business before rates harden.
Companies typically like to try to time market cycles and jump into writing business just before rates firm. One carrier that looks ready to take advantage of coming favorable market conditions for management liability is Aspen US Insurance, especially after making a big hire in 2010 to start building it capabilities in this segment.
While it would be wrong to call Aspen US the new kid on the block, it’s safe to say that the company will definitely be making its presence felt more this year in that segment. At the end of last year the company was approved to start writing excess management liability in California, one of the last big states for the carrier to receive authorization to write in.
“Essentially this product is designed to sit over any underlying management liability product, D&O, EPL, fiduciary liability, crime and fidelity, as well as professional liability coverage that we would offer to some financial institutions,” said Fred Cooper, chief underwriter, director and officers insurance.
Cooper is the man in charge of building Aspen US’s management liability platform. He came to Aspen US from Axis in April 2010 and has been steadily working toward building out the company’s management liability offerings. The carrier now has the capability to write excess management liability in 47 states on an admitted basis.
Eventually, Aspen US will start ramping up primary coverages, too. The company has plans to introduce forms for primary public company D&O, side A D&O and private equity funds in the future.
“Our product pipeline is full of opportunities at the moment,” Cooper said.
For now, the focus in on the excess coverage. In particular the company is targeting large companies, including Fortune 500 and Fortune 1000 organizations, as well as other publicly owned companies.
“Public companies are attractive in that there is a lot of information available in SEC filings and most are very well run,” Cooper said. “In addition, the filings contain a lot of disclosure about how they do business. As an underwriter, that provides you with the ability to gain a greater degree of certainty and differentiate between risks.”
Aspen US knows that even with this disclosure these types of policies can be tricky to write.
“Each of the accounts that we underwrite are written on an individual basis,” Cooper said. “You start out with a base policy and then the policy is tailored to address the needs of a particular company. This is where an experienced team adds value for brokers and clients.”
The excess coverage that was recently approved in California, like the rest of the carrier’s products, is a traditional follow-form product. Aspen US will consider writing everything from the first layer of excess to the top layer.
The company’s maximum capacity for a layer is $25 million. It has exercised its full capacity at times, but it uses that sparingly. It most often writes limits of between $10 million and $15 million.
Look for Aspen US to start making more of an impact in the market this year and into the next. The company really started writing this business halfway through last year and anticipates using the experience of its team and the relationships they have built to make its mark in the segment. Every member of the management liability team has at least 15 years of experience in the industry.
“We’ve done this before,” Cooper said.
Another focus for the organization will be in the claims department. Cooper said the company purposely put the underwriting and claims teams in the same building. They are both based out of Jersey City, N.J.
“Our product is our promise to pay,” Cooper said. “We want underwriting to be co-located with our claims department so our message is consistent.”
The claims department is used in the creation of new products, too. After the initial products are conceived, the claims group will vet them to make sure they seem feasible.
As Aspen US continues to build out its product line, the company will be looking add distribution means. Brokers must be appointed, but the carrier is not limiting the brokers they will appoint as long as they meet certain criteria.
Aspen US is marketing its brand across the United States, as well as the Bermuda market.