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When it comes to observations of the excess and surplus lines market, there is a difference between the momentum of liability and property lines, said W.R. Berkley CEO W. Robert Berkley, Jr.

Addressing some talk that has painted a picture of an E&S market that is, in general, losing momentum, the chief executive suggests using “somewhat of a finer brush.”

“As far as we can see, the momentum for the liability lines continues to be as strong as ever,” Berkley told analysts on a conference call to discuss first quarter earnings. “To the extent you’re seeing any slowing in the momentum of E&S, it’s likely to be property related.”

Related: W.R. Berkley Reports 50.4% Increase in Q1 Net Income

There remains opportunity within the property line, but momentum is not what it was last year, Berkley added.

“We’re still seeing rates moving up and we expect that they will continue to move up for the immediate future,” he said, adding that the insurance market has caught up to what the reinsurance market had done to correct costs of capacity. “I expect that we’ll try and make some more hay on property before we call it a day,” Berkley added.

Speaking more on reinsurance, Berkley said property catastrophe “has run a bit of its course” barring significant future weather events. Property catastrophe has “perhaps seen the peak…we’ll see with time.” However, good margins can still be had. In looking at the company’s property reinsurance business, Berkley said, “We view it as still a healthy line.”

“Right now we think that opportunity, generally speaking, still exists in property,” Berkley said. “How quickly that will dissipate—I don’t know. But we play close attention to it and we will not have an issue shutting off the spigot if we don’t think it is a good use of capital.”

Meanwhile, general liability “remains very robust” in the admitted and nonadmitted markets, driven by social inflation, Berkley said. Auto, in particular, he added, “continues to be in the crosshairs of social inflation,” which will cause “considerable additional firming”—especially for commercial auto.

Berkley said W.R. Berkley in the first quarter continued to see “very robust activity on the E&S front, particularly on casualty or liability.” He said there is “nothing that leads me to believe the momentum is going to be subsiding anytime soon.” Reinsurance is becoming more aware of the impact social inflation is having, and will likely put pressure on the casualty and liability insurance marketplace but the insurer’s role as a small-limits player ($2 million or less) curbs its exposure to potential reinsurance increases. Berkley said the insurer looks forward to reinsurers “embracing greater discipline on the casualty lines.”

Topics Trends Excess Surplus Property