Pricing discipline has eroded in the face of fierce competition, shifting exposures, and fresh capital entering the excess and surplus (E&S) market. After years of aggressive rate hikes, prices began falling in 2021, pressuring underwriters to reassess their approach.
“Those price increases were quickly mitigated, starting in 2021 with premium dropping due to heavy competition,” said Mike Levins (pictured above left), chief underwriting officer for management liability at Vivere. “Certainly, pricing discipline continues to be a challenge for the marketplace.”
That pressure wasn’t universal, though. Some carriers exited altogether, particularly in management liability, creating capacity gaps. “Several markets have actually left this space…leaving gaps to be filled by other market participants,” said Levins. With fewer players, discipline has returned in some segments, especially among mid- to upper-tier public programs where new entrants are unwilling to write business at lower rates.
Still, cracks are showing – particularly where markets are chasing growth.
Levins flagged growing inconsistency in underwriting behavior, with some markets returning to “high-risk sectors, back into high-risk geographies.” That renewed aggression is forcing brokers to navigate fractured capacity across the board.
“You’ll have some accounts that are in heavy demand, and it’s easy to fill out the programs, and other companies where they’re struggling to find adequate capacity, with the right terms,” he said.
According to Christopher McKechnie (pictured above right), CEO of Vivere, that inconsistency reflects a deeper volatility in the market itself – and presents an opening.
“We're looking to be a stabilizing factor where we can come in and address the insured's ultimate need and still produce a sound, profitable result for our carrier partner,” said McKechnie. “We're not looking to pick cycles. We're looking to come in… grow a book in a prudent manner.”
The shifting exposure landscape – particularly around ESG, cyber, and AI – has introduced new variables. But Levins argued the marketplace has so far held up.
“Any gaps that have been out there… have somewhat been quickly mitigated by the competitiveness of the marketplace,” he said. Still, larger public programs have seen some tightening. “New markets [are] coming in saying they’re not going to write at those pricing levels and they need a higher premium.”
On the private side, gaps are appearing where carriers exclude privacy risks unless a dedicated cyber policy is in place. More broadly, the industry has shown a willingness to course correct. Levins pointed to early attempts to impose broad AI exclusions on D&O policies: “The market quickly responded and didn’t allow those policies to move forward… markets that had those AI exclusions had to quickly retreat.”
McKechnie echoed the importance of clear communication and flexibility. “We have to listen to the market and then we have to be able to communicate to the market what is in the art of the possible,” he said.
Despite concerns about commoditization in management, Levins doesn’t see it playing out that way. Instead, he believes new capital entering the E&S space is driving smarter underwriting – especially with the help of technology.
“You might have two restaurants down the street from each other that might get two completely different quotes for EPL because of the use of technology,” he said. Automated systems now allow for underwriting differentiation at a hyper-granular level – by geography, application data, or even HR practices.
New entrants are mostly targeting smaller accounts, where Levins sees ample growth opportunity. “Most of the businesses in the US still don’t buy a management liability policy,” he said. “There is still room to continue to grow in this market.”
McKechnie agreed that tech is enabling specialization, not commoditization. “I see a more timely specialization of the product,” he said. Vivere’s strategy involves “augmented intelligence” – pairing underwriters with smart systems that optimize quoting, pricing, and portfolio analysis. “We’ve brought in a technology officer partner that is very strong in this area,” he added.
Clients are demanding tailored policies delivered quickly, especially in a climate of rising defense and settlement costs. “There is increased litigation, a very creative plaintiff’s bar, social inflation, settlement costs escalating, defense costs escalating,” said Levins.
In that environment, carriers can’t afford a one-size-fits-all model. “Business clients work to differentiate themselves in their own industry and can get frustrated when an insurance carrier treats them just like everyone else,” he said. “They deserve a product that is tailor-made for them and their unique exposures.”
That expectation is reshaping underwriting processes and service models. “Brokers require accurate products, quickly delivered,” Levins said. He pointed to the growing role of analytics in portfolio management, from tracking retention trends to adjusting sublimits and pricing levels to match emerging exposures.
McKechnie sees the current moment as a chance for underwriters to reset and realign. “The approach that we’re taking with the balance between Mike’s underwriting expertise and fully utilizing technology is going to continue to differentiate Vivere in the marketplace,” he said.
