Nationwide’s Nelson: Robust E&S market set to benefit amid migration to coastal cities

Despite recent hurricane impacts in the southeast US, Nationwide’s David Nelson is still positive on the E&S market, helped by a continuing migration to coastal cities.

“The projections will show you that it'll be another healthy year in ’24 and probably ’25 of solid premium growth,” Nationwide’s executive vice president of E&S told The Insurer TV.

“I think what's happened over the past couple of years with severe convective storms, we're seeing a lot of business flow in from the admitted markets into the non-admitted market.”

“And then I think as you see the populations migrate towards the coast – I think it's still the same thing,” he added, highlighting the opportunity coming into the E&S market.

The E&S market for some time enjoyed greater regulatory freedom but the sheer volume of inflows has attracted greater scrutiny. But that is no cause for panic, according to Nelson.

“I think we play a vital role, right?” Nelson said. “We're the safety valve for the overall industry. We see more requests for data that are needed from some of the regulators, but I think the regulators overall understand our role that we play.”

Insurers are “certainly seeing an uptick in requests for information but it's not something that I would call a trend”, he added. “It's something that we are monitoring.”

A plethora of factors point to how robust the industry is, Nelson continued, mentioning that “we've seen a number of years of rate and some re-underwriting of portfolios”.

“I think it says a lot about the solvency and the financial stability of our industry,” said Nelson. “I think there's only been one insolvency since 2003. There were none in the last year. So, it really gets back to how resilient this market is.”