Best's Review


Entrepreneurial Agent/Broker
Strength Through Specialization

Creating new markets and products to meet the challenge of emerging risks is at the heart of the excess and surplus lines market.
  • Meg Green
  • December 2020
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Steve DeCarlo, AmWINS Group (pictured)

Pat Ryan, Ryan Specialty Group

Matt Power, One80 Intermediaries


The most difficult risks in the insurance industry often end up in the excess and surplus lines space. The E&S market is booming, reaching a record level of $55.5 billion in premiums at year-end 2019, up 78% since its last retraction in 2011, according to AM Best.

Key to success in the E&S space are expertise and having the knowledge to write risks that the standard market shuns, said three leaders who've built their careers in the E&S market.

Those leaders—Steve DeCarlo, executive chairman, AmWINS Group; Pat Ryan, founder, chairman and chief executive officer, Ryan Specialty Group; and Matt Power, president, One80 Intermediaries—recently sat down with AMBestTV to discuss successes and challenges in the E&S market.

Their panel was part of a three-part series on entrepreneurial agents and brokers put together by Best's Review and AMBestTV.

We do a lot of different products. We want to serve the retail client at all their needs, not just certain products that other people see, but products that retailers demand.

Steve DeCarlo
AmWINS Group

Maintaining Focus

“Specialization is paramount when you talk about E&S,” DeCarlo said. “You can't go out to a retail client and fake it. You have to be great at what you do. Retailers demand that we're great at what we do, and so do the markets, frankly. We were highly focused on making sure that how we came to market was at a level that proved our expertise.”

Charlotte, N.C.-based AmWINS Group Inc., the largest independent wholesale distributor of specialty insurance products in the United States, operates through more than 115 offices globally and places $20 billion in annual premium. With $1.5 billion in revenue in 2019, AmWINS ranked as the 14th largest broker according to Best's Review.

DeCarlo served as chief executive officer of AmWINS for 17 years, leading the business through the merger of several specialty wholesalers, and has served on the AmWINS board of directors since he joined the company in December 2000.

“I think fundamentally, when we set out to build a foundation to the business and overall, when we thought about our strategy, what we'd set out to do was think about how to build a business that our retail clients and our market partners could look to, and how we could look to the next 150 years,” DeCarlo said. “Without that structure, we wouldn't be successful.”

One key to maintaining that focus was employee ownership, he said. More than 40% of AmWINS is owned by about 725 employee shareholders.

“Employee ownership was a critical thing that we focused on, and getting that aligned so that all our employees could feel that ownership meant a lot to us. We had to make sure that we'd focused on training and making sure that we were experts at what we did,” DeCarlo said.

DeCarlo said the company also focused on diversification. “We didn't want to be siloed as just great at Southeast wind, or just great at earthquake, or just great at casualty. We've gone into medical stop-loss, and U.S. life and health. We do a lot of different products. We want to serve the retail client at all their needs, not just certain products that other people see, but products that retailers demand.”

Industry icon Pat Ryan, the founder and former chairman of Aon, launched Ryan Specialty Group in 2010. “It's a very competitive business,” Ryan said. “It's a real value-add business; it's one that brings advice and advocacy to the retailer on behalf of their clients. When we're the MGA, a market needs to become a go-to market. We only do underwriting, hopefully, where we can differentiate ourselves.”

The strategy in building E&S business is specialization, Ryan said. He looks for the top intellectual capital in specialty lines, and focuses on attracting, retaining, empowering and supporting them.

“Then, we split it into verticals,” Ryan said. Practice groups are formed based on industry and product. This can include both distribution wholesale brokers or managing general underwriters, he said. Ryan Specialty, like many others, has both.

“We find that focusing with experts on an industry and a product really allows us to differentiate the talent,” Ryan said. “Critically, we believe it's important to align our talent with the retail broker's talent in that same specialty line, and then take it to a market that also has the specialty talent, so that we have alignment from the insured being represented by the retailer, to the wholesaler and to the capital provider.”

He emphasized the importance of innovation. “A broker always wants to be able to differentiate themselves from their competition, not on price but on form, on any kind of exclusive opportunity that they might have with the market,” Ryan said.

Matt Power served as executive vice president for Lexington Insurance Co. before becoming president of One80 Intermediaries, which was formally launched in December 2019.

During his tenure in the E&S market, Power watched the industry evolve.

“If you think about the E&S business 20 or 25 years ago, it was highly fragmented,” Power said. The E&S market had businesses based in individual cities, and they specialized in either property or casualty. During dramatic market cycles, business was feast or famine.

Which was why “this notion of building diversity, uncorrelated cash flows, has been critically important to me,” Power said.

“From Pat [Ryan], certainly, I learned the importance of segregating wholesale broking and underwriting. They're different businesses, they're different disciplines, and they have to be managed separately and then distinctly,” Power said.

He said the company focuses on developing a healthy flow of uncorrelated income streams. “It really provides us, as Steve [DeCarlo] points out, with the ability to counter some of the traditional market cyclically that would have challenged that old traditional wholesale or intermediary model.”

One80 has been growing through acquisitions, including the Maritime Program Group, a U.S.-based yacht MGA; Equinox, a global travel accident health business; and Strategic Underwriting Managers, the largest independent MGA in Canada.

“Over the next quarter, you'll see us move into areas like nonstandard impaired life and disability, warranty and some other specialty areas,” Power said.

As a young organization, One80 has much of its growth coming from acquisitions. “We'll likely add over $150 million in net revenue by year-end, purely from inorganic growth activities,” Power said.

Pat Ryan Ryan Specialty Group

A broker always wants to be able to differentiate themselves from their competition, not on price but on form, on any kind of exclusive opportunity that they might have with the market.

Pat Ryan
Ryan Specialty Group

Benchmarking Opportunities

When it comes to weighing a business's potential, “scale matters,” DeCarlo said.

“Will it matter to our retail clients? We don't want to be the smartest people that invent products that retailers don't need, or markets don't want to sell. We were guilty of doing that early in our history, that we would invent a product we thought was smart, but nobody wanted [it],” DeCarlo said.

Ryan Specialty, which has made 41 acquisitions, considers both organic and inorganic growth opportunities, Ryan said, but avoids any market that's oversaturated.

“If there are 40 or 50 competitors and it's a commodity, you're not differentiating. We don't go there. We look for underwriters who can differentiate and where we can become a go-to market,” Ryan said.

In September, Chicago-based Ryan Specialty Group closed on the acquisition of All Risks, with the combined entity now having roughly 3,300 employees and 70 offices across the United States, the United Kingdom and Europe, and projected to handle nearly $15 billion in premium during 2020.

All Risks “was a perfect fit for us because it expanded our scale and scope and our ability to serve clients. Frankly, with 35 discrete programs, they expanded our managing underwriting specialty capabilities,” Ryan said.

While One80 has focused on acquisitions, Power said, it doesn't take all offers. “We certainly walk away from a lot of deals because they really are not sufficiently differentiated, going back to this notion of niche. Or based on the culture. If the culture doesn't feel right, then you've got to end the conversation.

“To the credit of a lot of sellers, cultural synergy is just as important to them. To many on the sell side, it's a critical component of who they're going to choose to go with. It needs to be a right fit for both the seller and the buyer, and most importantly, for the employees as you move forward,” Power said.

Matt Power One80 Intermediaries

This is a dynamic market, and it’s really incumbent on all of us as leaders in the E&S space to be driving innovation in creating new markets.

Matt Power
One80 Intermediaries

Anticipating Change

The liability landscape is constantly shifting, Power said, and E&S writers need to not just respond to change but anticipate it.

“It's incumbent on the E&S industry to deliberately and consciously focus on the notion of change signals. Change signals are very faint in the earliest stages. It requires some level of amplification in order to advance them internally and build critical market solutions,” Power said.

Ryan said it's important to maintain good communication with retail clients—it's “all of our reason for existing.”

Retail brokers will often ask for more capacity, he said.

“We also pride ourselves on anticipating change, and as Matt [Power] said, getting out ahead of that change. I think that's a critical quality for any company that wants to be a leader in any industry or sector,” Ryan said.

DeCarlo said E&S brokers also listen to “the data.”

“When you get a million submissions a year—there are not many retail brokers, if any, that get a million submissions a year—you lead with this data, this information,” DeCarlo said. “The more data you have, the more you can now analyze your analytics. It tells you a lot of times where the industry is going and points you in directions ahead. The power of your data, no retail broker has the amount of data we have.”

AmWINS recently bought Stealth, which has helped it grow its medical stop-loss business. “Now we're doing over a billion dollars of premium in the medical stop-loss business, which is an exciting field and very dynamic, obviously not something I grew up with on the E&S side,” DeCarlo said.

While potential regulatory changes always remain a challenge, the E&S market continues to be ripe for growth. Ryan said there's a shortage of E&S capacity in many areas.“We're working diligently to bring additional capacity either through insurers or reinsurers,” he added.

Risks including COVID-19, cyber liability and geopolitical risks still need coverage, Power said.

“This is a dynamic market, and it's really incumbent on all of us as leaders in the E&S space to be driving innovation in creating new markets,” Power said.

E&S underwriters can lead the way to cover emerging risks, DeCarlo said.

“E&S underwriters in the U.S. need to be in the risk-taking business. My biggest concern there, is if they're run by standard line executives, and they see the type of risks that E&S underwriters should be taking, that they get in this fear mode,” DeCarlo said. “E&S underwriters have freedom of rates, freedom of form, attachment points and price as their weapons. We need them to be E&S underwriters, not governed by actuaries with fears, sitting in corporate offices. If the price can sell, we can sell it. We need them to be risk-takers and understand that.”

Meg Green is senior associate editor, AMBestTV. She can be reached at

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