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Personal lines market splits between scale and specialist underwriting
Stonybrook says insurers have cut personal lines exposure while redirecting capital toward commercial and specialist business.
Reinsurance News, citing a new report from insurance and reinsurance advisory firm Stonybrook Capital & Risk Management, says the personal lines market is increasingly dividing into two approaches, scale expansion and specialist underwriting.
Stonybrook argues that personal lines can still produce attractive returns, but insurers need either enough scale or a defined underwriting expertise to succeed.
The advisory firm notes that several large insurers have reduced their personal lines exposure, with more capital shifting toward commercial and specialist segments.
It adds that scale is most relevant for standardized products such as personal auto and homeowners, citing capabilities like large datasets, segmentation, automation, direct distribution, and broader geographic reach, with Progressive, GEICO, and State Farm listed as examples. It also points to specialist underwriting as a path for coastal and catastrophe-exposed property, non-standard motor, very-high-net-worth homes, and other difficult risks.