Speed to market has become a structural risk in specialty insurance, reshaping loss patterns faster than programs can adjust and turning once-stable portfolios into moving targets. That tension, according to Veracity Insurance Solutions program manager JoAnne Hammer (pictured), sits in the gap between how quickly clients can change their business models and how slowly many carriers change their underwriting assumptions.
Hammer sees that gap play out in the way insureds build and rebuild their revenue streams. Product lines and services launch or disappear in compressed cycles that outpace any static view of exposure. “I think the thing that we're seeing the most is speed to market with products and services. It’s taking much less time for businesses to add products and add services,” she said. Those same companies embrace “quickly evolving business models” and tell brokers and underwriters, “We started as this type of company, we found this other niche, and so we're moving to that,” she said.
In that kind of market, technology and new resources let businesses reconfigure themselves almost in real time. Hammer argued that the old rhythm of annual reviews and occasional midterm endorsements no longer keeps a program honest. “Unless you're really watching your customers and staying very connected with them, it's going to be difficult to monitor the scope of risk within your book of business, because of how quickly things are evolving with technology and different resources,” she said. The same tools that make operations more efficient also mean “it's so much easier to get things done, and to get them done quickly, now,” she said.
Rather than respond with blunt withdrawals from entire sectors, Veracity tries to narrow that gap through sharper program design. The team uses exclusions and class selection as its main levers and anchors those decisions in live claims intelligence. “I think the number one thing that we're doing is tailoring exclusions. We're really monitoring claims activity to look for new things we weren't expecting to come through on our programs,” Hammer said. As patterns emerge, they move decisively because “As we see those, or start to see trends, we can tailor exclusions: ‘We didn’t expect that; we don’t want that within the program’,” she said.
For brokers and program managers, Hammer’s central message is that portfolios now accumulate unpriced risk in the space between business-speed change and underwriting-speed change – and that closing that gap demands more than an annual renewal conversation.
That need for speed, Hammer said, shows up not only in insureds’ business models but also in how competitors adjust their appetite. Internal data has to sit alongside a continuous read of what rivals are doing, because competitor moves often reveal where stress or opportunity is building before it shows up on one carrier’s own loss runs.
Hammer explained that Veracity is “always doing competitor analysis, looking at what classes of business they're getting in and out of and coverage changes within those classes,” a discipline that has already “led, in a lot of cases, to some class expansions in some of our programs” while also driving “some reduction in classes or changes to our premiums,” she said, as the team follows the economics rather than clinging to legacy appetite.
The cost of falling behind those signals becomes stark in lines where speed and automation make it easy for fraud to scale. Hammer illustrated that risk through Veracity’s photography program, where “we were finding a lot of claims under the inland marine side of our business on that program,” she said. What initially looked like a simple uptick in frequency ultimately traced back to “a fraud ring where customers were buying the inland marine coverage and then submitting fake claims,” with perpetrators using AI to create “purchase receipts and police reports” and then filing for losses “for property they never owned, or for much higher-ticket items than what they actually owned,” she said.
Once that pattern surfaced, Veracity took rate to plug the hole on the inland marine book and also rewired how those claims were reviewed and how the program was framed. The episode “helped our claims adjusters become aware of these situations, and again tailor exclusions to help us underwrite that business and keep those fraudulent situations out of our book,” Hammer said, turning a technology-enabled attack into a forcing mechanism for tighter underwriting discipline.
For Hammer, the photography example underlined a broader point: in a market where bad actors can spin up AI-assisted fraud just as quickly as legitimate clients can launch new products, programs have to evolve at the same pace as the threats they face.
If AI-driven fraud shows how quickly a program can be undermined from the bottom up, litigation around abuse and molestation claims shows Hammer how external systems - particularly courts and venues - can blow through what looks like ironclad policy language.
She pointed to a long-standing health and wellness program where a sexual abuse claim that was “very clearly excluded on the policy” still generated a massive loss. “There had been a multi-million-dollar award against an insurance carrier for a bad faith claim on something that was excluded,” she said, and in that legal climate “The carrier felt that paying the claim was the most appropriate way to handle this,” she said.
The decision to put full limits on the loss across multiple policies meant “we ended up with nearly $10 million in abuse and molestation claims under this one insured, based on the number of policies we had,” Hammer said. As the book “blew up a bit,” the carrier’s tolerance for the structure evaporated. Veracity then had to move the portfolio at speed, finding a new home between February and July with a partner that Hammer described as “really focused on technology and data” and able to provide what the program needed “very quickly” while becoming “one of our core partners,” she said.
That shock also pushed the team to redraw the line between core offerings and volatile exposures by carving sexual abuse and molestation into a distinct bolt-on. Hammer explained that they “created a new sexual abuse and molestation (SAM) program that we could bolt on with a different carrier to protect our core business, but still give those kinds of claims a place to be settled for much less,” which not only ring-fenced severity but also sharpened the arguments available when courts or plaintiffs tried to drag excluded losses back inside the primary layers of coverage. “We also have the opportunity to say, ‘This is excluded. We offered you this coverage; you didn’t buy it,’” she said, and that structure offered “a better way to deny these claims and stand up in jurisdictions where we see what I would call ridiculous claims being paid on excluded exposures,” she said.
In effect, the abuse and molestation experience reinforced for Hammer that speed to market is not just a client-side phenomenon. Court trends and venue risk can force carriers to re-architect programs just as quickly as changing business models can, and the only sustainable response is a program structure that can flex without putting the core portfolio at existential risk.
Across fast-changing insureds, AI-enabled fraud and volatile court environments, Hammer sees a common thread: specialty programs can no longer rely on static views of risk.
Staying viable now, she argued, means watching clients, competitors, claims and courts in near real time – and being willing to redraw the boundaries of a program as quickly as exposures evolve.
