When brokers and carriers convened for the Wholesale and Specialty Insurance Association’s Annual Marketplace in San Diego on Nov. 16-19, AM Best senior editor John Weber caught up with past NAPSLO president Gil Hine for an AM Best TV interview. Currently, Hine is senior vice president for MHI, an Amwins Company.

Together the two examined the challenges facing the insurance industry in Texas, given the recent sequence of catastrophic property losses in the state.

“We could use a few years without events,” said Hine. “It has been a really, really tough four or five years.”

Last winter’s extended freeze that came with power grid failures was MHI’s biggest claim event in 2021, said Hine. Next toughest peril was hail, especially in North Texas. Large loss weather events, said Hine, have made it a real challenge to underwrite a profitable book of business over the past few years. The result is increased rates, increases in deductibles and a reduction in capacity, said Hine.

Asked by Weber how he handles such a challenge, Hine responded that it takes explaining to the agents so they can explain to customers. Without a reasonable return, insurers are unable to provide coverage, said Hine.

Getting adequate rate means being disciplined, Hine said. “If you can’t get the rate, then you shouldn’t write the risk.”

Hine described Texas as a hard market for property, but less so on the liability side. The booming Texas economy helps drive insurance premiums as part of that growth, said Hine.

For the foreseeable future, Hine sees property rates climbing. There is some ground to make up on the property side, given the steady stream of large claim events, he said. While he anticipates continued increases for now, Hine foresees rates hitting a plateau in six to 12 months. “But I don’t see any decrease coming any time soon.”

“The carriers that are providing property aggregate and property coverage in Texas need to get a return on their investment for the next couple of years to make up for what they have experienced these last five years,” said Hine.

Hine served as 2015-16 president of NAPSLO, with his term ending about a year ahead of the merger of AAMGA with NAPSLO to form WSIA. In 2001-02, Hine served as president of the Texas Surplus Lines Association. The AM Best TV interview was broadcast on Nov. 18.