Surplus Lines and All that Jazz

Happy times are here again for professionals who operate in the excess and surplus lines arena—at least as far as making money goes. Rates are up, bringing commissions up with them, and in many lines the pull back of standard markets has opened up opportunities for surplus lines carriers to step in and take up the slack.

The Surplus Line Association of California (SLA-Cal) reported that premium processed for the month of March 2003 increased to nearly $370 million compared with the $201-plus million processed in March 2002. And for the full year 2002, surplus line totals increased by 104 percent over the 2001 premium total. SLA-Cal attributed the over $3.5 billion in calendar year 2002 premium to the impact of the
hard market.

Texas, and presumably other states, have had similar experiences. Surplus Lines Stamping Office of Texas (SLSOT) figures show over $890 million in premium was processed as of April 30, 2003, a 21.1 percent increase over the $735 million in the same period the year before. For the calendar year 2002, SLSOT processed $2.5 billion in premium versus $1.5 billion processed in 2001. And some lines have been impacted more than others. For instance, in commercial multi-peril, 308.4 percent more premium was processed in April 2003 over April 2002; in the fidelity line, the increase was a whopping 372.6 percent, year over year.

Obviously there’s a lot of action going on there. That’s why the Directory of Excess, Surplus and Specialty Markets included in this issue is so important. Published twice yearly, in January and June, the directory is a comprehensive resource for locating markets
for hard to place risks. It’s also easy to use, with coverages
grouped in broad categories, and an alphabetical listing of carriers
and intermediaries at the end. (The directory is also available online at www.insurancejournal.com. Click on the “Directories” tab at the top of the homepage.)

There’s a lot of action going on out in the oil and gas fields across the country too—with surplus line carriers stepping in to provide coverages where standard markets fear to tread. As I found out in researching “Working With Blowouts, Knock-for-Knocks and Other Oil Patch Oddities,” there are certain kinds of insurance that your energy clients won’t want to go without.

This issue also keeps you up to date on key figures in the insurance business. Dave Thomas goes one on one with Alan Kaufman, chairman of Burns & Wilcox Ltd., who reflects not only on the decades since his late father, Herbert,
founded the company in 1969, but speaks to the future of his business, as well as the insurance industry in general.

In an interview with staff writer Kevin B. O’Reilly, former Louisiana
Commissioner Jim Brown expounds on his experiences during the six months he spent in jail after being found guilty of lying to an FBI agent. Brown also explains what he is doing to try and clear his name for the conviction he believes is unjust. Finally, Mark Sektnan of the American Insurance Association brings readers up to date on the latest insurance legislation in Nevada.

Stephanie K. Jones
Managing Editor
sjones@insurancejournal.com

Topics Excess Surplus