Leadership In Action
E&S Property: The Building Blocks of a New Vertical
In the insurance world, launching a new line of business is no easy feat. So, when it came time to build out our brand-new E&S Property vertical, ProSight turned to the Best of the Best: Bill Steinberg and Stephen Nadeau, our new SVPs of Property.
Well-known and respected throughout the industry, Steve and Bill are the right duo to lead ProSight’s E&S Property vertical, having worked together in the Property space since 2005. Together they built out the Commercial Property vertical at Validus and stayed through its acquisition by AIG before moving on to The Hartford. They’ve now landed at ProSight, joining a leadership team built from extensive talent throughout the insurance industry.
Here Bill and Steve discuss how, in just three months, they built out ProSight’s E&S Property vertical for a September 2021 launch. They talk about where they began, the elements of their underwriting approach, and some key things they’ve learned along the way.
Q. Where did you even begin in building out ProSight’s E&S Property vertical?
Steve: There were a couple of major areas we looked at right away. Number One was forms. We needed to make sure we had all the necessary ISO forms for brokerage property programmed into our forms library. That way when we wrote a policy, we could just go through and select the forms we wanted to attach. Outside of ISO, we’ve been working on our own proprietary forms to write some single peril coverage—like flood only, earthquake only, or wind/hail only policies.
I’d say Number Two was technology, which goes hand and hand with the forms piece. ProSight’s system wasn’t designed for open brokerage property, so our IT team was basically starting from scratch. They built a system that enables us to bind, quote, and attach the forms we want to use.
Bill: Hiring our team was another key area, and one we approached in a slow and measured way. That’s what we did well at Validus. We didn’t go out and hire a team of ten people with no premium. As we grew, we hired more—and that’s exactly what we’re going to do here. We have four underwriters now, and we’re slated to have a fifth for 2022.
Steve: When it comes to hiring, we look for people who are aligned with how we view risk, especially in terms of our approach to risk selection, capacity development, pricing, etc. If not, the consequences could be severe.
Bill: The last component would certainly be distribution. We wouldn’t have anything to write if we didn’t have distribution partners. So, we reached out to brokers we’ve worked with in the past, people we still have relationships with, to get them appropriately contracted with ProSight.
Q. What are the hallmarks of your underwriting approach?
Steve: Technical expertise tops the list. You have to know what you’re selling. As a team, we know our forms and products and how we can serve our brokers. If you’re a company that just lives on price, you’re dead if your prices go up. Will we be the cheapest? No, but we will be competitive and offer a quality product. We want brokers to say, “Hey, ProSight really knows their stuff, so I’ll call them and get a prompt reply and a quality quote.”
Bill: Another part of our approach is our ability to problem solve, to give solutions to wholesale brokers. Ultimately, the insured is the final client, but the people we work with, the people we’re doing business with, are the wholesale brokers. And they’re usually coming to us with a challenge, so we need to find solutions for them.
In the E&S world, we see things that are difficult or out of the ordinary. And because there’s more flexibility when it comes to rates and forms, we can be more nimble and more creative with some of the things we do.
“Whether it’s coverage, expansion, or reduction, whether it’s pricing or deductibles, whether it’s excluding something, we have a myriad of arrows we could use to offer solutions. That’s what makes us different, but also how the E&S space in general is different from the admitted space.”
Steve: Another element to our approach is service. And, honestly, I think distribution and technology are part of that service piece, too. It’s like in any facet of life, people expect immediate replies. “I sent you an email this morning. You didn’t reply back to me yet.” Or you might have a friend send you a text and expect a reply in two minutes. It’s no different in the business world. People want immediate replies to their emails and inquiries. So, the better we are at technology, the better we’ll be at service.
Our goal on the service piece is to get to every submission that comes in. It might not be a yes, it might be a maybe, but they’ll get an answer, which then leads into the distribution piece. We only select a certain number of brokers that we, as a team, can handle. That’s probably one of the big things we learned from doing a startup vertical in the past is we know what is manageable. We know the brokers who have the business we want to see. And by selecting a limited number of brokers, we’re creating an air of exclusivity. We’re basically creating franchise value where the broker is the franchise representing ProSight. So, I think all three—service, technology, and distribution—are interrelated.
Q: You anticipated my next question. What have you learned from previous Property builds?
Steve: I would say the biggest thing is that it’s a lot of work! We are starting from zero: zero policies, zero premium, etc. One of the things we learned at Validus is not to put too much pressure on ourselves—although we’re both Type A in that regard.
Bill: Because we’ve done this before, we knew what to expect going in. We were chomping at the bit to get out and write business, but you’ve got to build out your systems. You need to have the forms and the broker appointments. It takes work, and it takes time.
Q: Does such a long-term partnership help in your approach to writing Property business?
Bill: Because we’ve worked together for so long, we’ve been exposed to similar approaches and appetites—so we’ve kind of developed together as far as having similar viewpoints. We’ve also made the same mistakes or were part of the same mistakes, so we’ve learned together, too. We’re largely aligned in how we think, but we’re not always in lockstep. Sometimes we disagree because we’ll each see different angles or nuances. But we’re always respectful and communicate our reasons.
Steve: You know, we’ll do the pros and cons, and obviously we’ll present what we think is the best idea. But, as Bill said, by no means do we always agree. I might say, “Have you thought of it this way?” and vice versa. But once we’ve made a decision, we both get behind it.
Q: What is your measure of success for the E&S Property vertical?
Bill: Of course, we’ve set some premium goals, but there are some things that are hard to monetize or put a number to. What we see as success is if we become a meaningful name in the E&S commercial property space. Most of our brokers didn’t even know how to pronounce the name Validus when we came out; five years later, we were a well-known name in our arena and part of a top E&S company. So, our goal is to definitely become a meaningful E&S provider that writes consistently and profitably in all phases of the market. Adding to that, we also want to be an integral part of the ProSight story going forward. We don’t want to be a fly on the wall. We want to look over at the other verticals and have them look at us and say, “Yeah, these guys were a big part of our success.”
—Written by the ProSight Team