Excess & Surplus: The Mount Everest of Insurance Coverage

Digitizing E&S to Power the Future of Small Business


Excess and Surplus (E&S) lines coverage has a well-earned reputation for being slow, clunky and extremely manual. It covers small businesses that can’t find coverage in the admitted, or standard, market usually due to risk level (think: roofing), and has historically required SMBs and agents to wade through a number of complexities including receiving several rejections from traditional carriers and complying with requirements that vary state-by-state. People often think of E&S coverage as a small segment of the insurance market earmarked for only the most unusual risks, but in reality close to 30% of businesses fall into this category -- that means nearly 1 in 3 of SMBs looking for insurance coverage have to endure this process! 

Why is this Happening?

Two primary factors have driven up the E&S percentage lately: a hardening of the market and the evolution of business models. In 2019, admitted carriers began taking on less risk and either not renewing or trimming their books, which created more E&S customers. Secondly, many SMBs are expanding or changing their services to meet the needs of the changing world around us and consumer expectations. This is especially true during COVID-19, which has forced many small businesses to pivot to new opportunities in order to stay afloat. For example, what had been a fairly straightforward restaurant to underwrite now needs to manage delivery risk and product liability during e-commerce orders. Many complex SMBs and related risks are no longer a fit for the admitted market, and E&S is critical to their survival. 

Bold Penguin Dives into Problem-Solving Mode

We saw these issues as an opportunity to be the first company to digitize the E&S space, and offer both E&S and standard commercial through one platform. We first assembled a dream team of engineers, IT professionals, and some of the most forward-thinking partners on the carrier, retail and wholesale fronts to pioneer through all of the complexity. Because E&S automation had never been done before, the team needed to outline and prioritize the entire process. We analyzed varying regulations and requirements for all 50 states, established underwriting and rating questions logic, and automated declinations and administrative tasks like signatures, taxes, and fees. 

The system was thoroughly tested by every party involved all throughout the development process to ensure the engineering complexity behind the scenes works seamlessly to deliver a user interface that is as simple as any other insurance product. The end result is an interface that makes you feel like you’re purchasing any ‘easy’ insurance product. 

New Solution Champions Existing Insurance Process and SMBs

With this launch, both standard commercial and E&S commercial options are available on a single platform – for the first time ever! What was once a clunky and frustrating journey is now fully digitally enabled for agents, carriers and customers. And processes like assessing declinations, which previously took agents about an hour of manual work, now take seconds. 

We also recently announced a partnership with Markel Specialty and its E&S products to expand commercial offerings on the Bold Penguin Exchange. Through this partnership, we now offer E&S alongside standard options to agents and brokers representing non-traditional SMBs three times faster than the traditional process. 

Our reward in all of this is delivering a clear benefit to the existing insurance process and SMBs. We are empowering the existing players by providing game-changing efficiency and distribution, and returning back to agents, carriers and customers something we all want more of: time. To SMBs, you are the backbone of the American economy. Some may reopen as is, and some may be forced to change and evolve to meet demand. But all deserve to be able to find an ideal commercial insurance solution through an empowered agent, broker or carrier – and Bold Penguin is now and will always be finding ways to improve that process so that they can get back to business. 

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