The Specialty
Lines Market -What is It?
The specialty
lines insurance market is the segment of the insurance industry where
the more difficult or unusual risks are written. Because specialty lines
insureds tend to be more unusual or higher risk, much of the specialty
lines market is characterized by a high degree of specialization.
Insurers participating in this market have specialized expertise and
experience in underwriting and rating insurance for a wide range of
risks. These insurers usually work with brokers who are
experienced in specialty lines insurance. Much of the product
development comes from the broker community in their quest to protect
the insureds.
The specialty lines insurance market focuses on two types of products:
unusual or difficult insurance and higher risk accounts. An example of
an unusual or difficult product is professional liability, and an
example of a higher risk account would be a manufacturer of explosives.
The professional liability line is included in the specialty lines
market because the underwriting, rating and claims functions require a
high degree of expertise and experience. The explosives manufacturer
would be included because of the unique products liability exposures
presented.
Insurance in the specialty lines market is provided on an admitted
(licensed) basis or a surplus lines
(non-admitted) basis. |
