The Chicago-based E&S division of XL Group has expanded its excess and surplus lines presence in the western part of the country with a regional office based in Scottsdale, Ariz., touting an underwriting team handpicked from local E&S provider Scottsdale Insurance Co.

The move represents XL’s desire for a dedicated West Coast presence in surplus lines, says John E. Goodloe, who was appointed president of XL Group’s E&S operation in June.

“The opening of the Scottsdale office is a gateway of getting closer to our customers,” he says. “We are trying to handle the business out of Chicago, but we didn’t have the presence we needed. This provides us with expertise out in the territory, and it goes back to our customer focus of being able to service and provide products.”

“We have a tremendous opportunity,” he adds.

Goodloe, who most recently served as senior vice president of brokerage for Scottsdale Insurance, tapped four former Scottsdale surplus lines underwriters for his new team: Kim Ramsey and Rick Yale as assistant vice presidents in XL Group’s E&S Excess Casualty product lines, and Scott Noffisinger and Katherine Schlueter as assistant vice presidents in XL Group’s E&S Primary Casualty product line.

Together they represent more than 60 years of underwriting experience, Goodloe says. XL also plans to hire a new property underwriter in first quarter 2015.

XL Group has been in the E&S sector about six years, and expects this Western expansion will help to grow its specialty product suite and distribution footprint in the sector in the coming year, Goodloe says.

“I’m very bullish on 2015,” he says.

The new Scottsdale facility will provide XL’s full line of specialty products, including its leading E&S products: primary casualty, excess casualty, property and transportation. The segment’s current breakdown is 60 percent property and 40 percent casualty.

Current XL customers include more than 1,200 individual brokers nationally, plus numerous brokerage houses. E&S competition in the west comes from RSUI Group Inc., W.R. Berkley Corp., AIG, Lexington Insurance Co. and Scottsdale.

XL’s biggest push for new surplus lines business will be California, which annually rates among the top states premium-wise for users of E&S coverage, along with New York, Florida, Texas and Illinois, Goodloe says. Additional western states that show E&S business opportunities include Arizona, Washington State and Colorado, he says.

Goodloe expects construction cover will be “big time” in both commercial and residential builds. On the property side, “earthquake cover is always big,” he says. Yet real growth may be hard to predict.

“The market is turning in a different direction; it’s getting a little bit softer. You can thank the lack of CAT activity over the last few years for that,” he says. “But it’s fairly steady. We’re feeling pressure, obviously, given that conditions are changing; we’re seeing some standard markets creeping back into the sandbox.”

However, XL has had “great success” on the property side, with “solid” customer relationships, Goodloe says. “We’re looking to continue that trend and work off of that. The future is very bright.”

Any future expansion will be based on customer demand, he says. That includes the possibly  growing XL’s E&S underwriting presence in Atlanta and Dallas. “It depends on demand and the needs of our customers. I think it’s important to be in front of them on a daily basis.”

“It’s more a thought for the future,” he adds. “It’s something that we have our eye on.”