What should be the primary consideration when placing risks with surplus lines?

The primary consideration when placing risks with surplus lines is aligning the risk appetite of the insurer with client needs. This is crucial because surplus lines are often used to cover unique or higher-risk situations that standard insurers are unwilling or unable to underwrite. By ensuring that the insurer’s willingness to accept risk matches with the specific needs of the client, it creates a more effective and sustainable arrangement.

When the risk appetite is well-aligned, both the insurer and the insured can benefit. The insurer can tailor coverages to provide adequate protection for the client's specific risks while managing their overall portfolio effectively. Additionally, this ensures that clients receive appropriate coverage that adequately meets their exposure levels without being underinsured or overpaying for unnecessary coverage.

While maximizing premiums, focusing on insurer reputation, and minimizing paperwork are factors that may play a role in the broader context of surplus lines placements, they do not stand as the primary consideration. Ensuring the right fit between the risk appetite and client needs is essential for creating a successful and beneficial transaction.