ATLANTA — The excess and surplus lines insurance market remains highly competitive, particularly in property lines, and there’s no sign that market conditions will change any time in 2017.

While underwriters are seeking out pockets of the liability market where rate declines are moderating or where increases are being eked out, for the most part insurance buyers are seeing premium savings.

Meanwhile there is a normal ebb and flow between the standard and excess and surplus lines markets.

The market remains competitive and “the important thing is to look at each risk individually” and price it individually, said Drew Johnson, Hartford, Connecticut-based managing director at Northfield Solutions, a unit of Travelers Cos. Inc.

“I don’t consider it a soft market,” said Maureen C. Caviston, Stamford, Connecticut-based president and chief operating officer of Partners Specialty Group L.L.C. “I just consider it competitive. It’s honestly risk by risk.”
However, Timothy W. Turner, president and CEO of R-T Specialty L.L.C. in Chicago, said the property market “is just really, really soft.”

“All lines of property just seem to be hitting the bottom, putting a lot of strain on the E&S market,” he said.
The executives were speaking in meetings at the National Association of Professional Surplus Lines Offices Ltd. conference held Sept. 25-28 in Atlanta. The conference attracts most of the key surplus lines market players, who hold dozens of private meetings to discuss business and market trends.

Rates are a mixed bag, said David J. Bresnahan, Boston-based executive vice president of Berkshire Hathaway Specialty Insurance Co.

The property catastrophe market is extremely soft, “with rates probably down 15 points from a year ago. Casualty is a firmer market, with a spectrum running from higher excess liability rates probably down 10%, while many umbrella accounts are flat to plus 5% on renewal,” Mr. Bresnahan said.

“We look at it by different industry segments and classes, so the change in the marketplace is choppy. Everything is not moving in the same direction,” said John Edack, San Francisco-based senior executive vice president of E&S casualty for Arch Insurance Group.

For instance, habitational risk is a challenge for E&S brokers to place, while manufacturing risks “are much more competitive as far as pricing goes,” he said.

In terms of risk size, “it’s more competitive with larger accounts than smaller risk-sized accounts,” said Mr. Edack.

“Rates for the smaller and midsized accounts are holding much better than the larger jumbo accounts” that generate more than $250,000 in premium, he said.

Pockets of hardness remain, including transportation — particularly commercial trucking — and New York City construction, say observers.

Marcel Ricciardelli, Philadelphia-based senior vice president of the casualty-environmental and engineering division at Allied World Assurance Co. (U.S.) Inc., said the surplus lines environmental liability market remains “fairly stable.”

The commoditized business, which includes very small combined general liability pollution coverages, “is coming under more competition,” he said.

It is unclear when the market will harden, executives say.

This year is “almost in the bucket,” and 2017 “will be more of the same,” said Mr. Edack. “There are no signs on the horizon that things will change much.”

“I think we will have a continually competitive casualty market in these spaces, but to what degree rates and risk selection and terms and conditions will change is a big unknown. I don’t expect too much of a radical change,” he said.

Referring to property, Mr. Turner said, “A number of carriers are starting to pull in their reins and stop writing below a certain rate … so they’re walking away from renewals.”

But this will not lead to a hardening market, he said.

“I think it’ll take much more than that to firm those prices up,” he said. It will take a “severe depletion of surplus to change the course of the softness, and a combination of changes in the global economy and catastrophes to have the capital leave that space.”

The market will remain soft through 2017, said Alan J. Kaufman, Farmington Hills, Michigan-based chairman, president and CEO of H.W. Kaufman Financial Group and Burns & Wilcox Brokerage.

Rates will stay flat or erode more in certain pockets, including property catastrophe. “The environment for 2017 looks the same as it has been for 2016,” Mr. Kaufman said.

“I think the smart businessperson isn’t hoping for a sudden disaster that causes a change in the market but is setting their business plans around what do we grow, how do we thrive in a changing, softening market?” said David W. Schraeder, Houston-based senior vice president of the custom accounts division at Hartford Steam Boiler Inspection & Insurance Co., a unit of Munich Reinsurance Co.