Paragon 'excited' to grow footprint as opportunities abound in best property insurance market in a decade

We launched Paragon Specialty Property on March 15, 2021, underwriting on behalf of Nationwide E&S in the mid to large property segment. It was true then, and it’s true now: There’s no doubt this is an attractive part of the market, rife with potential, and both Paragon and Nationwide look forward to growing their respective footprints in the coming years.?

As we approach the anniversary of the program launch, our team is excited for the opportunities afforded to us in the current environment. Notably, submissions into the E&S channel are at an all-time high, while rates/terms in many classes are exceptional.

'We are here to provide solutions and alternatives, not to decline risks, no matter how difficult.'

Paragon Specialty Property, with up to $125 million of A+ XV capacity to offer on risks, underwrites exclusively through the E&S channel, allowing access through a limited number of appointed wholesalers. Our risk appetite spans both catastrophe and non-catastrophe.

Our book can be broken down into four segments:

Traditional Layered and Shared

• Typically “soft” occupancy business that would likely be written in the admitted marketplace but for some aspect of catastrophe exposure and/or poor loss history.
• This segment has historically been driven by hurricane and earthquake, but we now see all those historical classes/geographies, as well as tornado/hail business that is exiting the admitted marketplace in search of a layered and shared solution.
• We actively participate across all classes/geographies in this segment.

Food/Beverage/Agriculture

• Over the course of the last 24-30 months, the E&S channel has seen a huge uptick in submissions associated with “food” classes. A “keener” appreciation of the potential for vertical losses has resulted in many admitted markets cutting risk appetite in this space.
• This curtailment, has opened up significant opportunity for E&S markets that have a technical underwriting capability to respond with layered and shared solutions.
• We provide capacity across virtually all classes and geographies in the space.

Industrial and Process Hazard

• Similar to what has transpired in the food segment, industrial processing risks have also experienced a material retrenchment on behalf of the admitted marketplace.
• This, in turn, has produced plenty of opportunities for technical E&S shops to respond with layered and shared solutions.
• Risks entering the E&S space run the gamut from woodworkers and molten metal to recyclers and warehousing. Paragon Specialty Property has offered, and continues to offer, solutions across all of these classes of business.

Wildfire

• Climate change and a perception of catastrophe model output that is less than accurate, coupled with enormous actual paid losses over the last five years has led to what many describe as an “insurance crisis” for wildfire exposed risks. At Paragon, we continue to view this class of business as an opportunity for the E&S market to provide solutions.
• While taking a conservative approach to wildfire risk, Paragon continues to look to grow our portfolio of exposures in this segment.

As we look out into 2022, we are excited at the prospect to materially grow our book of business, while generating above market returns for our capital providers. At Paragon Specialty Property, our mantra has been and remains, “we are here to provide solutions and alternatives, not to decline risks, no matter how difficult."

- Mike Denton, President of Paragon Specialty Property