Desolate Climate for Agency E&O

A s I made my way around the trade show floor at the Michigan Association of Insurance Agents annual convention last week, I happened into a conversation with an agent while she flipped through the Feb. 23 edition of Insurance Journal Midwest.

“Nightmare on E&O Street!” she exclaimed after glancing at the headline of that issue’s Editor’s Note. “I already know what that’s about without having to read it—getting that coverage is impossible!”

I pointed out to her that the Note referred to an agent’s allegedly fraudulent sales of errors and omissions coverage to producers. Nonetheless, the point she was making is more than valid, as West Managing Editor Cynthia Beisiegel makes clear in her story this issue, in which she describes agency E&O as being in a “desert climate.”

Employers professional liability also remains a mystery to many. Contributing writer Mike Kizlinski, a senior broker with a Pasadena, Calif.-based excess and surplus brokerage, takes an inside look at how insurers underwrite and price EPL. Meanwhile, contributing writer Steve Sprowls, president of a professional lines firm in Austin, Texas, writes in our Parting Shots that he remains dazed and confused about the exact state of the market cycle of the E&O, EPL and directors and officers coverages.

Join the club, Steve.

Elsewhere in this issue, John Wepler writes that stock incentives for producers may be the answer to the perpetual perpetuation problem faced by agencies run by principals looking to retire soon. David C. Comer points out that, when asked, most insurance consumers admit the need for long-term care coverage, either for themselves or for a parent. Yet, they are by-and-large underinsured. Comer argues that agents and brokers can’t let this sales opportunity pass them by.

Lastly, East Managing Editor Charles E. Boyle provides an overview of what the Benfield Group and Risk Insurance and Management Society’s new surveys have to tell us about the future of commercial lines and reinsurance rates. Boyle’s analysis is, as usual, incisive.

We hope you enjoy this issue of Insurance Journal Midwest. Of course, if you need your insurance fix on a more regular basis, subscribe to our daily headlines e-mail newsletter by visiting our spiffily redesigned Web site at www.insurancejournal.com.

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