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By KATIE KUEHNER-HEBERT, a freelance writer based in San Diego with more than two decades of journalism experience and expertise in financial writing

Liberty International Underwriters U.S., the specialty-lines division of Liberty Mutual Group, is expanding its excess-and-surplus insurance business by adding a property product beyond its existing E&S casualty lineup.

"Although we've always written energy-oriented property business, wholesale brokers have been asking us with greater frequency about whether we would get into the E&S property, and we believe we have gotten the best possible people to do that for us," said Dan Vaughn, LIU's chief operating officer in an interview with Risk & Insurance®.

"The wholesale brokers who have been asking us to do this are the same brokers who do a lot of casualty business with us, so we are a known quantity to them and they are a known quantity to us," he added.

While some carriers venture into the E&S property line to eek out more revenues during a soft market, LIU is merely capitalizing on a stated need from its existing broker E&S customers, Vaughn contended.

"We're always looking for niches and opportunities that give us the rate of return we are looking for, and we believe we can do this within this market," he said. "Our forte is very difficult, specialized risks and the way we go about underwriting them is hiring great people who have extensive experience."

Carr has 18 years of E&S property experience and has relationships with many of LIU's existing wholesale broker customers.

KNOWING WHAT YOU'RE WRITING

Unlike some underwriters that try to protect their top line by writing exposures that they don't know much about, the E&S property product is natural fit for LIU, according to Mike Ardis, director of communications for the National Association of Professional Surplus Lines Offices Ltd. (NAPSLO).

"Property is always an area for people looking for additional opportunities," Ardis said. "As we move from a soft market to a hard market (generally speaking), there might be more carriers looking to move into E&S, but right now LIU's brokers might be looking for another property market and LIU is wanting to fill that niche."

Many E&S property carriers focus on specific market segments, but LIU's offering is broader, Vaughn said. LIU's E&S property product includes coverage for all-risk, named windstorm, difference in condition, flood and earthquake in catastrophe-exposed areas. In addition, LIU will write habitational risks, office buildings, warehouses, vacant property, public entities, heathcare facilities, casinos, shopping centers and REITs.

"We're not just trying to zero in on any one thing--we're trying to write a really balanced portfolio," Vaughn said.

December 20, 2010

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