Photo: Trailers of the East Coast from Mocksville, USA .This file is licensed under the Creative Commons Attribution 2.0 Generic license.
Nationwide is set to expand its footprint in the excess and surplus (E&S) market with the launch of a dedicated Brokerage Property unit, expected to be operational in the second half of the year. The unit will be led by industry veteran Tonya Courtney, who brings more than three decades of experience managing commercial property portfolios and fostering relationships in the wholesale market.
Courtney, who joined Nationwide in December, will report to David Nelson, executive vice president of E&S wholesale. Courtney joined Nationwide from Arch, where she served four years as RVP - Southeast Region E&S Property. Prior to that, she spent 11 years at Chubb.
The new unit aims to provide coverage for hard-to-place property risks, filling a gap left by traditional insurers who have scaled back in certain high-risk areas. “Tonya’s vision and proven track record make her the ideal leader to launch this important endeavor,” Nelson said.
The move comes at a time when surplus lines insurance has become increasingly critical for property owners, particularly in states where major insurers have withdrawn due to mounting catastrophe risks. Traditional insurers have exited markets in states like California, Florida, and Louisiana, citing the increasing frequency of hurricanes, wildfires, and other natural disasters that have made coverage unsustainable.
With many admitted insurers limiting their exposure, surplus lines carriers have stepped in to offer alternatives. According to S&P Global Market Intelligence, the share of US property premiums held by surplus lines insurers has grown from 5% in 2018 to 9% in 2023, with even higher concentrations in disaster-prone states.
The launch of Nationwide’s Brokerage Property unit signals a strategic effort to navigate this shifting landscape. The unit will focus on non-admitted wholesale products tailored to high-risk properties that do not fit within standard underwriting guidelines. This includes coverage for commercial properties facing exposure to extreme weather events or other unique risks.
While Nationwide’s expansion reflects confidence in the surplus lines market, it also underscores the broader industry challenges. State-imposed rate regulations in places like California and Florida have made it difficult for admitted insurers to price risk accurately, forcing many to withdraw. In turn, this has increased demand for surplus lines policies, which are not subject to the same regulatory constraints.
Despite their growing role, surplus lines carriers face their own pressures. Some rely heavily on reinsurance, and there are concerns about whether smaller surplus lines insurers have sufficient capital reserves to withstand major catastrophe losses. “We’re dealing with a whole new crop of players that aren’t backed by the guaranty fund or a multi-hundred-billion-dollar corporation,” said Doug Heller of the Consumer Federation of America. “It’s really concerning.”
State regulators are beginning to acknowledge the unsustainable trajectory of the property insurance market. California has introduced new rules allowing insurers to use forward-looking risk models and pass along reinsurance costs to policyholders, but these changes come with obligations for insurers to provide coverage in high-risk areas. In Florida, policymakers have attempted to stabilize Citizens Property Insurance Corp., the state’s insurer of last resort, but it still holds nearly 1 million policies.
As Nationwide moves forward with its E&S Brokerage Property expansion, the company enters a rapidly evolving market where demand for surplus lines coverage is surging. While surplus lines insurers are providing much-needed solutions, questions remain about their long-term ability to balance affordability and financial sustainability in an era of escalating climate risks.
