Insurers' efforts to innovate and be proactive about climate change will lead to growth in excess and surplus (E&S) insurance lines in the next five to ten years, according to specialty insurers.
Me-too insurers, that use rates and forms from other insurers that have already been approved by regulators, are an example of the industry not being proactive, according to Angela Grant, chief legal officer of Palomar, a specialty insurance company with hurricane and earthquake coverages. Grant spoke in a panel discussion at ClimateTech Connect in New York on September 25.
"There's not enough innovation and courage in the industry. It's not really just at the company level, it's at the industry level," she said.
Insurers have a lot of data to work with, but have not been able to use because of the me-too format, and regulation of rates, according to Michael Gulla, CEO and co-founder of Adaptive Insurance, a parametric insurance company, who spoke on the same panel.
"Now they actually are starting to invest and build out E&S programs that allow them to take new, innovative ideas to market, and then they use modern distribution and data and tech partners," he said.
Innovation and compliance must go hand-in-hand, according to Grant. "Even if they say, 'We're tech leading,' if you're selling insurance, you're also regulatory leading, even if you're in the E&S space," she said. "I love the E&S space, but I think that there's a need for partnership between both innovation and compliance."
