One of the most innovative companies in its industry, Arch Insurance has been recognized in Insurance Business’s 5-Star Professional Liability and D&O Awards. Two of the company’s top executives recently spoke with IB’s Bethan Moorcraft about trends in the professional liability (PL) and directors’ and officers’ (D&O) liability markets in the United States. Justin Psaki, executive vice president of the executive assurance and professional liability division, and Marilyn Marshall, executive vice president of professional liability programs, also shared their plans and expectations for Arch in 2022.
Regarding hard market trends, Psaki recalled that most companies involved in D&O experienced underwriting losses as a result of previous years’ conditions, such as periods of underpricing and an increase in securities class action suits. Therefore, carriers had to re-underwrite their books and reduce their exposure to certain classes. The COVID-19 pandemic also exacerbated market challenges. Marshall noted that another factor was the increase in the number of ransomware events, which led to greater losses under network security and privacy policies.
Psaki explained that although Arch was not immune to losses, the company focused its attention on the small accounts segment, specifically private D&O, asset managers’ transactional liability, and real estate investment trusts. “When the market turned in 2019, we chose to offer more D&O capacity on renewals, new business by being a solution provider to our trading partners, and from 2019 to [the end of] 2021, Arch’s management liability executive insurance will have doubled the size of the portfolio by premium,” he said.
Amid a low interest rate environment and tough economic conditions, Arch Insurance has been resilient due to its good policy programs, knowledgeable underwriting claims team, and a strong panel of loss control and breach response vendors.
“We really have all of the pieces and now can [provide] a solution in the marketplace and [add] capacity, writing new business and [being a] solution for brokers and policyholders during this time,” Marshall said.
In addition to assisting brokers’ trading partners and generating new business by offering unique coverages, another success factor is Arch’s culture of engagement and empowerment, which ensures teamwork and innovative thinking within the company.
Looking toward the new year, Psaki said that Arch’s priorities are to align with trading partners on difficult-to-place business and underserved industry segments.
“We have the size and scale now from growing the book, doubling the size of our portfolio in two years, where we now have the ability to offer more capacity than any point in the history of Arch,” he said.
Marshall is also optimistic as Arch aims to offer more capacity in PL and cyber liability. For example, the team is working with agents and brokers to raise awareness among current and prospective policyholders so that vulnerabilities in their networks can be addressed, helping them reduce risks in the long run. In addition to enhancing internal processes and efficiencies so that Arch can continue to offer good service, the company is collaborating with its MGA partners on improving its product offerings. She emphasized that the insurer is “fanatical about responsiveness, passionate about the voice of the customer and [about] continuing to be a solution for customers.”
