In the energy insurance market, change is the only constant. This industry, including the middle market energy casualty segment, is currently going through a period of rapid evolution and uncertainty. From changing risks and rising premiums to emerging capacity limits and other underwriting constraints, it can be challenging to stay ahead of the curve. Factor in significant consolidation, and it’s clear that insurers need to evolve alongside the market to remain profitable.
“When it comes to change, you either don’t adapt, or you pivot to overcome,” explains Scott W. McDougall, Founder & President of Energy, Industrial & Utility Risk Solutions (EIURS), LLC, a DUAL North America, Inc. company “At EIURS, we’re choosing to adapt.”
Trending: Wholesale consolidation
Over the last 10 years, there has been a significant increase in wholesaler consolidation in the middle market casualty segment.
“While hosting a visit to some of our retail partners in Texas last spring, it became clear how significant the wholesale consolidation was to EIURS and how that impacts our future growth and success,” notes McDougall. “During our first four years at EIURS, 75% of our top 20 producers were independent wholesalers specializing in energy business. Their strong support and the desire to succeed made for a symbiotic relationship. And now, we’re seeing that with ongoing consolidation, the number of independent specialty wholesalers has been greatly reduced, and as a result, the model for how they interact with insurers and MGU’s has changed.”
“We’ve had to evolve our strategy with independent specialty wholesalers,” explains McDougall. “At EIURS, we’re pivoting to ensure we continue to offer our valued trading partners premium products and excellent service, so we remain the market leader in our segment.”
Relationships are still a key part of this, but now EIURS is also working to reach retailers directly to ensure they better understand their capabilities and how they can partner on ancillary lines of business.
Leaning into a new wholesale model
As the days of independent energy wholesalers dominating the scene are fading, a new wholesale model is emerging, along with new rules and a new game.
“This model requires us to look to other potential outlets since we can no longer depend solely on the wholesale market to help us achieve our goals,” McDougall says.
While the EIURS team will continue to give access to and write energy casualty business through its wholesale partners, it will also target boutique retailers.
McDougall’s approach: “We are happy to market to any retailer to communicate our capabilities and we then encourage the retailer to submit their business through their preferred wholesaler.” he says.
In addition, EIURS will also offer terms directly to retailers for a growing list of ancillary lines of business.
Growth opportunities ahead
With the right approach to the evolving energy insurance market, there are plenty of opportunities in the years to come. Savvy insurers will take advantage of growth in the energy sector and the possibilities this dynamic presents to meet emerging risks with the right solutions. This includes offering new products and services to accommodate evolving demands and entering new markets as the sector continues to grow around the globe.
Advances in technology, such as artificial intelligence, can also be used to identify and better manage risk, which can ultimately drive a healthier bottom line.
EIURS has added new programs and coverages, increased capacity, and expanded internationally, an approach that has helped it thrive as the energy insurance landscape shifts.
“We’ve been adapting to changing markets and looking ahead with innovation in mind,” sums up McDougall. “We’ve worked hard to continue growing and expanding our business so we can provide our partners with better solutions and more opportunities to succeed.”