Year-End Business Update from TDCSU
By Paul Romano, TDCSU President
2020 was in many ways a remarkable year. There is no doubt you are chock-full of insight into the sadness and exhaustion of the COVID-19 pandemic, so we have chosen to acknowledge but not elaborate on this aspect of what you have lived through with us and our respective communities over the course of the year.
The insurance business has rambled on, once again, adjusting to changing circumstances, endeavoring to provide solutions where sensible, and certainly adapting to a level of virtual interaction that only necessity could compel. As decades-long insurance professionals, we take a great deal of pride in being there for the organizations, businesses, and individuals who must finance certain risks in order to protect their livelihood. Our singular emphasis on the healthcare industry provided us ample opportunity to help.
As you know, TDC Specialty Underwriters, Inc., commenced operations as a member of the TDC Group in January 2016. The timing of our inception positioned us well as then-current market and environmental factors began a slow and then more rapid exodus of capacity from healthcare-related risks. These factors along with increasingly responsible underwriting actions have begun to drive accident year results to what we see as sustainable levels. Accordingly, we have grown from less than $10 million of gross written premium in 2016 to more than $200 million at the close of 2020. That is a lot of customers and policies when you consider our average annual policy premium is around $50,000. It may also be of interest to you that we have now written in excess of $500 million in gross premiums since TDCSU’s inception.
From a segment perspective, we have seen significant growth in our Long Term Care, Medical Facilities, Hospitals, Managed Care, Management Liability, and Life Sciences businesses, particularly over the second half of 2020. The critical mass we were seeking across these segments has materialized as we had envisioned. Conversely, our E&S Physicians and Cyber Insurance segments have not experienced these same improved market conditions and, as a result, continue to reflect more of a monitoring position as we enter 2021. Our E&S Physicians and Cyber Insurance products continue to be market competitive. However, our prices and terms and conditions for these two products continue to be less competitive than needed to achieve the kind of profitable growth we are seeking. So, we have elected to keep our “powder dry” and continue to monitor these segments. When we feel the market has moved to a point where we can write these two segments with pricing and terms that meet our needs, I can assure you—we will.
New and renewal account pricing continued to rise in the second half of the year. At this point, we expect these increases to continue as we proceed through 2021. The introduction of the global pandemic brought forward coverage-related issues in addition to the normal cycle tightening of terms and conditions. Although capital remains abundant and we are seeing new operations forming, it may be some time before any noteworthy impact to current trends occurs. We continue to challenge our underwriters to be creative in their decision making, initiating renewal discussions as early as possible, seeking a greater depth of information to support our underwriting process and to enable greater transparency in our decision making. We have long viewed seeing to the bottom of the risk as a critical premise in putting our best underwriting foot forward.
We like where we are and, more importantly, how we have gotten to this stage in the evolution of TDCSU. The reference points we focus on provide us confidence that we are operating on solid technical ground, making good choices, and creating an appropriate balance across our portfolio of business. Frontline and management personnel are talented and experienced professionals with a shared appreciation for what we are trying to accomplish. We are doing our best to get them the tools they need to reach informed underwriting and claims decisions efficiently and thoroughly. We want every experience our brokers and insureds have with us to be consistent and extraordinary.
Lastly, I came across a recorded interview with a highly recognized media mogul. When asked specifically about success, he indicated that it is often said that success breeds success. He questioned this and posited that success may actually be built on what leaders do in response to failure, frustration, and catastrophe. This perspective gave me pause, particularly given the “remarkableness” of 2020.
Thank you for all of your support and best wishes for safe, healthy, and prosperous 2021!