Q&A with XS Brokers’ Adam Devine

Wholesaler XS Brokers has been riding the wave of the E&S market’s expansion, with the Quincy, Massachusetts-based intermediary continuing to add talent and moving into new lines as it looks to broaden its reach.

In an interview with E&S Insurer, XS Brokers’ CEO Adam Devine shares his thoughts on the market’s prospects, how his firm is reacting to the opportunities it is being presented with, and what tools it is utilising to support its growth.

The E&S market continues to grow at a rapid pace, with record premium volume in 2023 and early indications that 2024 will be another year of major expansion. What are the key drivers behind this continued growth, and how long do you think it will last?

The E&S market often grows rapidly in response to several key factors, including emerging risks, a hardening of the wider market and regulatory changes.

Demand for E&S insurance can be driven by novel and complex risks, such as cyber threats, environmental concerns such as climate change and geopolitical instability, not to mention the disruption caused by technological advancements.

In times when traditional insurance markets harden, with higher premiums and stricter underwriting, consumers and businesses turn to the E&S market for coverage.

Adjustments in legislation and insurance regulations can create new opportunities or necessitate additional coverages that the E&S market is well-positioned to provide. The regulatory environment in the US continues to be more restrictive, forcing us to become more creative in underwriting profitably.

The duration of this growth can hinge on broader economic conditions, regulatory environments and the industry's ability to innovate and manage emerging risks. There are certain product lines like catastrophe-exposed property that have been in a hard market cycle for the past 36 months, based on attritional losses, insurance to value, reinsurance costs and social inflation, and we feel it may last for another 12 to 18 months.

How has XS Brokers tapped into the E&S market’s growth? Are there any specific market segments where you have expanded significantly?

The E&S industry is now north of $100bn in top-line premium and we’ve been fortunate to grow organically for 10-plus straight years in the high teens percentage-wise.

We have tapped into sustainable growth by focusing on specialisation, technology and partnerships.

We have focused on niche industries or emerging risks where we can provide deep expertise. As these factors contribute to the unpredictability of the E&S segment, our specialised expertise has become instrumental in bridging the gap between our retail and carrier partners.

Our innovative, tailored solutions address the nuanced risks of our business; and it's our ability to respond quickly and effectively that has been key to our growth.

With technology, not only do we provide the systems needed for our employees to perform their best, but we also invest in automation, data extraction and data analytics. We have leveraged technology to improve underwriting accuracy, client service and operational efficiency.

Forming strategic partnerships with both carriers and retail partners has always been a core driver of our success, allowing us to develop innovative solutions for our customers, grow our business, introduce innovations and increase expertise.

We have managed to grow across all product lines, but no doubt cyber and technology E&O are very large growth areas. In today's tech-driven world, it's crucial to focus on developing solutions that protect against breaches affecting the business and harmful errors.

Where does XS Brokers see new opportunities moving forward?

Regardless of which market cycle we’re in, two long-term trends that affect our market and individual positioning for growth are the restrictive regulatory environment and the acceleration of risk complexities.

We always seek new opportunities in underrepresented industries or by providing creative products tailored to emerging risks, but generally speaking we focus on three key areas – service excellence, innovative solutions and expertise.

We look to offer unparalleled customer service and tailored risk solutions, while also developing unique product offerings or employing cutting-edge technology, and building and showcasing deep industry expertise and understanding of complex risks through specialisation and market positioning.

Given the growth of the E&S market, the sector has seen greater carrier interest, while new wholesalers have also launched. How does XS Brokers ensure it stands out in an increasingly competitive market?

We have been in business for 45 years, but we have an ethos that our foot is always on the gas pedal, we never rest on our laurels and we continuously try and get deeper in our trading relationships. I was once told this business is spelled P-E-R-S-O-N-A-L and it's never been more true.

How are you attracting new business?

Attracting new business in a competitive market often requires a combination of marketing, networking and showcasing unique value propositions such as specialised knowledge or innovative solutions.

We have a very strong business development team along with aggressive, knowledgeable underwriters and brokers who are constantly on the hunt for new relationships and or finding pain points in other relationships that we hope to remove.

In addition, introducing new technologies, forming strategic partnerships and focusing on the latest industry trends allows us to focus on attracting new business and developing new solutions for our new and existing clients.

What technology and innovations has XS Brokers used to support its growth?

XS Brokers is committed to technological innovation as a core component of our strategy to enhance operations, improve client experiences and drive business growth.

Through the strategic use of data analytics and a robust CRM system, we have been able to stay ahead in the competitive E&S insurance market.

Technology plays a crucial role in supporting growth. Five years ago, we developed our own state-of-the-art CRM tool we call Pipeline, by partnering with OIP Robotics (OIPR) and engaging its technical staff on the project.

It has allowed us to get much more granular internally with our retail clients and tracking information, our marketing outreach and so on.

We also engaged OIPR to develop and build a comprehensive aggregate bordereaux tracking system for our property portfolio.

This system not only provides risk-level detail but also includes COPE information and aggregate writings by zip code, county and state. It gives us instant visibility into our aggregate position and helps us assess the potential impact of adjustments to our portfolio.

Based on the success we saw on these projects, we've also enlisted OIPR to build our own agency management system over the past few years, which we're on the verge of launching.

We are very much looking forward to the operational efficiency from having our own state-of-the-art cloud-based system.

Adding data extraction to the mix will help speed up and streamline our processes and minimise the manual rekeying of data, thus allowing us to reach a high degree of accuracy. All of this is allowing us to make informed decisions, increase production and make better business results overall.

Even while working with our partners, we have seen these technologies bring results – shorter turnaround time with easier and efficient data-driven decision-making. Taking all of this into account, the overall probusiness process tends to be more efficient as new technology solutions get implemented.

How has XS Brokers used those innovations in its operations, and how have they helped support the company’s progress?

We use data analytics and extraction to streamline operational processes and enhance decision-making. It allows for the processing of large volumes of data to assess risks more accurately, leading to more informed underwriting decisions.

Data analytics supports the customisation of insurance solutions for clients.

Our CRM tool is integral to managing and improving relationships with clients. Having a centralised system for tracking all client interactions, from initial contact through deeper relationships, ensures a seamless and personalised client experience.

It enables us to refine our sales strategies and marketing efforts. By analysing client data, we can identify cross-selling and up-selling opportunities, tailor marketing messages and efficiently allocate resources to the most promising leads.

Feedback captured through the CRM tool is analysed to continuously improve products and services. This ongoing loop of feedback and improvement helps us to remain responsive to client needs and industry changes.

The transformative impact of data analytics and CRM tools at XS Brokers continues to grow. These technologies have not only streamlined operations and enhanced client engagement but also positioned the company for sustained growth by enabling data-driven decision-making and fostering stronger client relationships.

Everything we are investing in is allowing us to analyse our data to greater lengths. It’s a never-ending cycle – being diligent with a continuous focus on reinvestment in technology.

What specifically made those technology platforms stand out from others?

As regards our CRM, yes there are other national brands for which you can pay monthly licensing fees, but we decided to build our own from a long-term perspective and are very pleased with the outcome and functionality of it.

We didn’t see any type of aggregate reporting system on the market, so again we made the decision to build our own. This also allows us a certain degree of flexibility as we have the option of enhancing our system to our business needs, while keeping up with the trends of the market.

Is there a specific issue you have at XS Brokers, or that you see in the industry overall, where you feel technological solutions could play a greater role?

The insurance industry, including XS Brokers, may benefit further from technological solutions in areas like blockchain for transparency and efficiency, more sophisticated AI for personalised insurance solutions, and Internet of Things devices for real-time risk assessment and mitigation.

You’ve now been at XS Brokers for almost 30 years – what have been the biggest changes at the company since you joined, and what does the future hold for the business?

While technological changes are occurring, it's still a relationship business and it takes creativity and the art of negotiation to win deals at the desk level. You have to find that balance between technology and bringing expertise to each deal.

The future still looks very bright with the amount of business that is moving into the E&S space given the flexibility and speed in which the market responds.