Navigating Volatility in the Insurance Business (a Q&A with Eric Amadori)

For Eric Amadori, the insurance business is all about relationships. As a Managing Director at Markel, with over 20 years’ experience underwriting and managing professional lines, Amadori has built connections throughout the insurance industry. In a recent interview, Amadori discussed the insurance market volatility seen in recent years and reflected on the relationships that strengthen the partnership between Ullico Casualty Group and Markel.

Thanks for taking the time to talk. What are some trends you are seeing in terms of Professional Liability claims?

I would say the top trend is inflation. It is simply costing more to defend these claims. Rates have risen substantially if you compare today to five years ago—and especially ten years ago. The size of the settlement value has increased as well.

The court system in Delaware also spurred significant changes by limiting the exclusionary language carriers can enforce in their policies. In practical terms, it is now more likely that a carrier will have to pay the same claim across two policies—something that rarely happened in the past. This is a big deal, given most insurance companies are incorporated in Delaware. These developments pose more challenges to underwriters in mitigating exposure when entering into one of these contracts.

It sounds like there have been some notable changes in the insurance landscape lately. What is one of the biggest shifts you have seen in your twenty years in the professional lines insurance business?

The biggest change would be the period and severity of the transitions from hard to soft markets, and vice-versa. In the past, the changes were more moderate and happened over a longer period of time. For example, in the early 2000s, you would see a 3-4% percent rate increase, or possibly a 10-15% increase over a 4-year period. Then, the market would flatten out for maybe 6 or 7 years. Eventually, you would see percentages drop a few points over the course of perhaps 5 years.

Now, the shifts are far more extreme. During this last cycle we saw 50-60% rate increases over the course of 2 years and then, within a matter of 1 year, the pendulum swung the other way with 50% decreases. The market is far more dynamic these days.

So we’ve been talking about professional lines insurance as a whole up to this point. Is the union marketplace following these broader trends?

The union marketplace has been a little different; there seems to be less volatility with accounts. You generally see more moderate gains and losses without the massive spikes.

The Ullico affinity brand commands a significant amount of weight in this space and provides more consistency year-in and year-out. Among insureds, there is a real sense of loyalty to the Ullico and Markel partnership. Our insureds value Ullico and what the company stands for as well as Markel’s reputation and the capital backing we provide.

Markel’s partnership with Ullico Casualty Group is now long tenured. To what do you equate the program’s success?

The mutual respect we have for the partnership. Our relationship is cultivated based upon trust and respect. We share a vision for success. Our shared vision is why we have such a great relationship. We have a true partnership and mutually respect, with open dialogue and the desire to grow and achieve together—even beyond the products we currently have in place.

You’ve been in this business for a long time. What is one of the most important lessons you’ve learned in your professional career?

Relationships are at the heart of this business. Insurance is obviously a very big industry, but it can also feel very small—colleagues from previous jobs or clients from years past tend to pop back into your life in some way or another. You never know who you will end up working with, so the effort you put into cultivating partnerships and friendships pays dividends and yields results.

I’ve built some great relationships over the years, whether it’s with a colleague, broker, a client, or even a competing carrier. If you are good to people, it opens doors and makes the work more enjoyable. You are only as good as the people you surround yourself with, so being surrounded with great connections can be a real benefit.

You also can’t lose sight of giving coworkers and staff opportunities for professional growth. You want to be able to utilize and foster the strengths and talents of all the different personalities on your team. Everyone has strengths and weaknesses, but when you come together as a team you can achieve some remarkable things. So, in the end, I always try to maintain a level of respect for everyone—staff, trading partners, and competitors.

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This conversation has been edited and condensed for clarity.

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