December 29, 2023

Pursuing Better Middle-Market Solutions with Clients and Brokers

Insights Canada

This article originally appeared in Insurance Business Canada.  

Arch Insurance has done well by going complex, tripling its middle-market property and casualty book of business in the process.

About two years ago, Arch was looking for different ways to grow in the Canadian P&C space.

“We didn’t necessarily have a standalone property product at that time,” said Dmitri Iankine, vice president, casualty and middle market, Arch Insurance Group Inc.

In keeping with their brand promise — “Pursuing Better Together” — Arch went out to key brokers in Canada and asked them what the market needed – what niches were looking to be addressed.

“We’re not trying to be everything to everybody,” explained Iankine. “We always try to find a niche. And that niche was determined to be accounts that are typically too complex for general markets.”

That said, Arch didn’t necessarily want to swim in the same waters as global corporate players. So it looked to areas that were far too complex for general markets, but were not necessarily being seen or sought by the global corporate carriers. They found that a lot of complex middle-market business was placed with MGAs or Lloyds of London, and that Canadian brokers were looking for a domestic solution through which they could really repatriate that business domestically. That way, they could deal with a local and empowered underwriter — someone with technical expertise and market knowledge.

By the Numbers

Total Assets
$53.9 billion

Total Gross Premiums Written
$17.3 billion

Total Capitalization
$17.4 billion

Total Net Reserves
$14.9 billion

Financial Strength Ratings

A+   Standard & Poor’s, A.M. Best Company
AA-   Fitch Ratings
A2   Moody’s

“We’re looking for solution-oriented underwriting”

Dmitri iankine, Arch insurance group inc.

But in order to write that type of complex business, two things needed to happen.

“Number one, you need a partner with brokers who have that business, and that is typically large, middle-market brokers who have bench strength in order to be able to attract business,” Iankine said. “Number two, you need a team technical enough to underwrite those types of accounts.”

Arch has a strong technical team in place, and “we’re looking for solution-oriented underwriting,” he said. As such, they are looking to partner with clients who need their technical expertise.

The program has been “extremely successful,” and only deals with between 25 and 30 broker partners, who have been strategically selected.

“In the past three years, we’ve more than tripled our book of business,” said Iankine.

Knowing its brief and its strengths, Arch tries to steer clear of industrialized underwriting.

“We’re not trying to compete with the companies who are conditioned to quote. Our underwriters are quoting to win for our clients,” he said.

Or, put another way, he sees Arch as a hunter, rather than a farmer, one with a selective but “elastic” appetite.

Usually we’re looking for accounts that have an element of complexity in the casualty space, but it also has a property that comes with it


Staying Flexible, Growing with Clients

A lot of insureds, for example, expand beyond their original borders into new territories and operations. This can lead to a non-renewal or a declination, but that’s where Arch’s “appetite elasticity” comes in.

“We allow the clients to grow with us,” said Iankine. “We allow them to expand their business. We don’t dictate what the client should or should not be doing. What a lot of brokers value about our solution is that ability for accounts to grow and not be concerned about non-renewal.”

Steve Jalkut, senior vice president and chief marketing officer for Arch, chalks the program’s success up to the competitive and thoughtful nature of the solution (product design), and the strength of the trusting relationship with the brokers.

“The team is looking to find the solutions,” said Iankine. “Ultimately, it comes out of the desire to construct a solution – to come to a yes as opposed to a no.”

Premiums, Written by Product Lines

Property, Energy,
Marine and Aviation
Casualty &
Professional Lines
29% 24%
Other Specialty Mortgage
18% 9%
Other (Including
Warranty and
Lenders Solutions)
7% 5%
Construction and
National Accounts
Travel, Accident,
and Health
4% 4%

Expanding Liability Limits Creates Room to Grow

Six months ago, team members sat down to look at the success of the program.

“The product itself was designed in the hard market cycle,” said Iankine. They looked to see whether the same hard market assumptions made at the beginning were still relevant.

“I’m happy to say that more than 95 percent of our assumptions were correct, and we continue [with] them,” he said. One of the changes that had to be made, however, was to expand primary liability limits. Arch had initially been offering lower limits, which was appropriate for that market cycle, but they listened to feedback from the market and made changes. Their property limit is $75 million and the combined casualty limit is $25 million. Arch is also able to offer fleet and garage auto in support of the P&C product.

The success continues with news that Arch has been added to the S&P 500 list.

They are “grateful” to be part of such an exclusive club, but are modest in that “you don’t see our name on the hockey boards” the way you would a more general, less-niche company. This new membership will allow them to attract new business and forge new, fruitful partnerships.