Specialty insurance is both exciting and challenging, according to John Vedder, the regional president of property and casualty at Bridge Specialty Group. In a recent conversation, he emphasized the dynamic nature of the industry, highlighting the many opportunities it presents for innovation and problem-solving.
Vedder shared insights on the importance of education and collaboration in overcoming industry challenges. He pointed out that misunderstandings often arise during the buying process, which can involve various parties such as insured individuals, retailers, wholesalers, and carriers. Clear communication is essential to ensure that everyone is on the same page. As a wholesaler, Vedder believes that part of his role is to help bridge these gaps and clarify the process.
Wholesale brokers are not just intermediaries; they are also strategic advisors. Vedder described the wholesale brokerage field as a vibrant space where new solutions are created daily. He believes that brokers play a crucial role in guiding clients to secure the right coverage, especially as the industry faces rising costs and evolving market conditions.
One significant concern is the increasing cost of claims. Vedder mentioned that some recent loss reports from the Los Angeles fires indicated costs nearing $800 per square foot, a figure that could nearly double the expected losses for some insurers. He sees this as a chance to raise awareness among agents and insureds about their coverage options and the risks they face.
The surplus lines market is experiencing growth, with a reported 12.1% increase in premiums and a 9.5% rise in transactions in 2024. States like Minnesota and Washington are seeing significant growth, indicating a shift in how specialty insurance is being utilized across the country. As more clients move from traditional insurance markets to surplus lines, brokers like Vedder are essential in helping them understand the new landscape and setting realistic expectations.
Vedder also highlighted the need for creativity in addressing the unique risks clients face. He mentioned strategies such as negotiating different deductible structures based on location and leveraging alternative capital markets to provide coverage for challenging accounts.
Looking to the future, Vedder believes that success in specialty insurance will depend on speed, knowledge, and adaptability. He argues that while the fundamentals of insurance placements may not change much, the ability to streamline processes and improve efficiency will be key. By being proactive and building strong relationships, brokers can lead the market and meet the evolving needs of their clients.
As the specialty insurance landscape continues to change, leaders like Vedder are paving the way for a confident and innovative future in the industry.