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Property Casualty

Cutting the Line: Tips for Moving Your Property Submission to the Top of the Stack

Mike Curtis
Mike Curtis
Complex Property Practice Leader, Property Casualty

By now, you’ve undoubtedly heard rumblings of, and probably experienced first-hand, the challenges that have been happening in the current property insurance market. But let’s recap some key underlying themes that are contributing to today’s environment:

  • Insurers are rightsizing historically under-valued risks, raising the ratable exposure basis and inflating premiums.
  • Increased catastrophe and non-catastrophe weather-related losses are increasing, putting strains on insurer profitability.
  • The appetite for single-carrier 100 percent solutions on tougher classes of business like habitational, hospitality, and food/ingredients has shrunk dramatically causing massive premium increases when accounts migrate to multicarrier shared and layered programs.
  • Reinsurers are pulling back on capacity, requiring more participants offering smaller layers at higher prices, and carriers are passing these costs onto customers.
  • The greater emphasis by insurers on completing engineering recommendations is forcing those insured to spend the capital to comply or face adverse renewals.

All of the above have contributed to this sustained hard market cycle where many insured companies are facing their fourth or fifth year in a row of significant premium increases — often accompanied by higher deductibles and less coverage. Not surprisingly, clients are tired of the trend and are looking for a better deal.

But what happens when EVERYONE is looking for a better deal?

Challenging Dynamics for Underwriters

With more property accounts being pushed to market than ever before, underwriters are absolutely inundated with an abundance of submissions. This presents a few challenging dynamics:

Little Incentive to Grow

With record volumes of potential new business available to them, many underwriters are hitting their quotas early in the year and have little to gain by taking chances on accounts with potential risk quality deficiencies.

Overloaded Staff

When pressed for time, underwriters will take the path of least resistance and focus on the accounts that require the least amount of work.

Flight to Quality

Under heavy scrutiny on profitability, underwriters are losing authority at the desk level with greater involvement from leadership on day-to-day deals putting underwriters’ decisions under a microscope.

The Importance of Brokers and Clients Working Together

With the heightened emphasis on risk quality by carriers combined with the need to compete for underwriters’ attention, brokers and insured companies together must work harder than ever to differentiate. By differentiating, we can “cut the line.”

You may be asking “how?” Below are some thoughts.

Think about Your Submission

Have a complete, thorough, organized submission that is easy to follow for the underwriter and their managers. This means paying greater attention to the information request and gathering as much necessary underwriting detail as possible early in the process.

Have a Story to Tell on Values

Meaning, how did you arrive at your estimated replacement costs? What resources did you use? Do you have appraisals? Have you just been rolling your values forward year over year or have you been applying industry-accepted trend factors? If underwriters can’t get comfortable with valuation, they’ll just move onto another deal.

Validate, Validate, Validate

Validate your business income exposure using a Business Income and Extra Expense worksheet. Ideally, a separate worksheet should be completed by location.

Capture ALL the “Good”

Identify any and all risk improvements by building. Did you install sprinklers? Did you replace a roof? Did you install hail guards? Include this information within or as an addendum to the Statement of Values.

Answer Questions Ahead of Time

If there is an exposure that you KNOW will raise questions? Answer the questions before they’re asked. What loss control measures do you have in place for your key exposures to loss? If you have welding or torch cutting, do you have a hot works program? If you have spray drying, what explosion mitigation measures do you have in place?

Have a Story for Any Significant Claims

Explain what happened, why it happened, and what you have done since to prevent it from happening again. Establish comfort with the loss experience where possible.

Own Your Information

Consider investing in third-party engineering on key locations that you can own and control.  Many carriers will accept this in lieu of their own loss control reports, and some will only quote when third-party reports are made available.

Collaborate with Holmes Murphy Experts

Lastly, let’s not forget this is a relationship business. Our submissions can get lost in a big old sea of submissions, no matter how good the account or how well we all follow the principles above. A broker picking up the phone and calling the underwriter creates a dialogue. Introducing the client and underwriter in person, or even virtually, gives both parties an opportunity to tell their story. It’s easy to say no to a faceless email. It’s a lot harder to say no to a person.

So, what do you say…let’s work together and get you where you need to be! Reach out, and we can get started ASAP.

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