A Little More Conversation

Daryl Angier

Among the wealth of information offered up at our second annual Top Broker Summit last November, delegates heard how climate change will necessarily alter building codes and engineering requirements for infrastructure to withstand the increasingly severe weather events that have become the norm in our times. It will do no good to keep building structures to withstand 100 km/h winds if storms with winds of 120 km/h become the new normal.

Corollaries to this new reality can be found throughout the insurance industry. For brokers advising their clients on property coverage, the steady increase in extreme weather events must necessarily lead to revised answers to the questions of “What do I need? What can I get? And how much coverage is enough?” While there may have been no change to a client’s assets since the last renewal, it is evident that brokers today must do more than simply ask for “same again” from insurers, without thought to how appropriate that program might be.

This truth was underlined a number of times in conversations with adjusters and restorers for this issue of the magazine. Over and over, frontline claims handlers told us that they repeatedly encounter insureds that don’t have adequate limits to deal with the full cleanup costs after a CAT, don’t understand what they are and are not covered for, or simply haven’t spoken to their broker since they first purchased the policy.

The last point is particularly key in that it suggests an easy solution to address these issues. Study after study of client satisfaction in the insurance industry shows that customers would prefer to have more contact with their broker than they enjoy currently; perhaps as many as three conversations per year.

The most obvious reason for making these efforts is client retention. If you’ve done everything you can to make sure a client is protected when a claim does come along, they’re far more likely to stay with you after the experience. But brokers also shouldn’t forget about the threat of an E&O exposure. As loss patterns continue to change and claims costs keep climbing, insureds that have been serviced in a “same-again” manner are more likely to find that their coverage will fall short of what is needed. And woe unto the broker that falls into their crosshairs.

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Copyright 2013 Rogers Publishing Ltd. This article first appeared in the January 2013 edition of Canadian Insurance Top Broker magazine.

This story was originally published by Canadian Insurance Top Broker.