Zurich NA E&S launches primary casualty offering

By David Bull

Jan 29 - (The Insurer) – Zurich North America’s E&S platform has launched a primary general liability product with limits up to $2mn per occurrence and up to $4mn in aggregate at a time of significant hardening in the segment, E&S Insurer can reveal.

The move comes at a challenging time for buyers and brokers, with a rehardening of the casualty market in both excess/umbrella and increasingly in primary liability.

This has been driven by increased loss frequency as businesses returned from Covid-19 lockdowns, while average claims severities were on the rise, in part due to changes in the behaviour of insureds as well as social inflation.

The environment of significantly increased casualty rates has coincided with heightened broker concerns about the long-term staying power of some carriers in the segment.

Chris Lewis, head of Zurich E&S, confirmed to this publication that the carrier recently launched a non-admitted primary casualty product for its wholesale partners.

Sources said that Zurich North America E&S’s move to launch a primary casualty product on Steadfast paper, starting with policies that have an effective date of 1 January 2025, is likely to have been welcomed by wholesale distribution partners.

The offering has deductibles of up to $100,000 and features both occurrence and claims-made options, with a broad appetite across a range of industries including hospitality and leisure; habitational; real estate and mercantile; manufacturing; wholesale and retail trade; discontinued products and operations; special events; and monoline specialised construction products such as wrap-ups and project-specific.

It is only available to wholesale brokers appointed with Zurich North America E&S. The product excludes New York construction, environmental and energy operations, and life sciences-related exposures.

Zurich North America E&S is led by Lewis, supported by a leadership team including Gabriel Fox as head of underwriting and Ron Beauregard as head of distribution.

The carrier provides a suite of E&S products spanning the commercial property, casualty, financial lines and construction segments.

Mounting primary casualty pressures

The rehardening of the umbrella/excess casualty market in the US has been widely documented, with rate increases accelerating through the mid-teens to 20 percent and beyond in recent months.

But, as previously reported by this publication, there is also a pick-up in pricing for primary casualty coverage.

In an interview in the November 2024 issues of E&S Insurer, CRC’s national casualty director Kristyn Smallcombe said that while last year primary rate increases were running in the mid-single-digits range on average for E&S casualty, they jumped to the high single digits last year.

Those increases are extending well into the teens and beyond for difficult accounts and classes.

Smallcombe said that carriers and claims practitioners are pointing to rising defence costs on the primary layer that is putting pressure on loss ratios.

With statistics pointing to more cases being litigated, carriers are having to prepare more costly defence strategies and will need to build that extra expense into their pricing.

“If you expect a claim has a higher chance to be litigated, both carriers and insureds may invest more in investigation and discovery to mount a strong defence, including hiring specialist counsel, expert witnesses, maybe forensics and accident reconstruction,” she observed.

“All these things cost money and contribute to driving up [the] overall total incurred, regardless of outcome,” she added.