Is the ATE market finally about to come into its own?
Yes, according to an article in Insurance Age. “If the ATE market is one that feeds on litigation, then the coming months and years should be a boom time,” it says.
This is a view supported by Harbour Underwriting MD Sharon Brown, who is quoted as saying:
“You only have to look at the high street to see that insolvencies are going to increase. The insolvency practitioner channel will be strong for us and brokers need to be involved in the conversation as they are missing out on a large income source. If you are a true risk manager to a commercial business, you need to start recommending this product.”
But that doesn’t mean underwriters will accept every case that crosses their desk. They will remain picky, a point confirmed in the article by Rocco Pirozzolo, underwriting director at Harbour Underwriting.
ATE and D&O insurance
Although standards won’t be comprised, the article says the product’s flexibility may give rise to other opportunities. One of these is in relation to directors’ and officers’ insurance (D&O), which has suffered over the past few years due to coverage restrictions and huge premium hikes.
ATE may have a role to play here by acting as a top up to existing D&O policies. This would give directors comfort that should the worst happen, their depleted D&O policy isn’t their only defence. “ATE couldn’t replace D&O wholesale, but it could enable a director to sleep at night,” says Sharon.
A message for brokers
The article closes with a final message for brokers:
“If you are not trading in ATE at the moment is it too late to take advantage of the looming litigation boom? That cream will undoubtedly be powerfully defended by existing brokers in this space.
But, as we’ve learned, that shouldn’t act as a deterrent to entering ATE – it could, in fact, act as an indicator, a guide, to what is possible in a niche but growing market.”
You can read the full article here.