November 30, 2020 by Adam Malik
Brokers who take a broad, scattershot approach to getting submissions approved by underwriters are only setting themselves — and their clients — up for failure and disappointment, an insurance executive warned during a recent webinar.
For a better chance at success, try a smaller scope and a more targeted approach, recommended Andrew Steen, president of Berkley Canada.
Some brokers are taking a throw-it-against-the-wall-and-see-what-sticks tactic, Steen observed during the Insurance Institute of Ontario’s latest At the Forefront webinar series entitled Finding Your Success in Today’s Hard Commercial Market. “What I would encourage you to avoid in this market is broad-based, shot-gunning out [of] your submission activity on [behalf of] any individual customer.”
He gave an example of this happening a week before his talk. His team received a submission from a broker that was copied out to 16 other property underwriters in the market.
“Now, you may think, ‘Okay, this is awesome, I’m getting to all the players at once,'” Steen said. “But invert the situation for a minute and ask yourself: If you were an underwriter getting that email, how much attention would you want to dedicate to that, given that you have definitely sent it to people who are not in their appetite? The more targeted you can be with your submission activity, I think the more rewarding that that will go for you.”
Steen shared other advice to help brokers navigate today’s difficult times.
For example, he encouraged all brokers to gain a better understanding of their insurer partners’ financial position.
“The reason why I say that is because those insurers that are wrestling with high combined ratios — so let’s say over 100 — are more likely to have to take dramatic action to improve their portfolios. And that will be a focal point for your customers that are with those markets. Therefore, you may see some more drastic actions coming your way on renewals.”
On the flip side, insurers performing at a higher level — he used the example of a combined ratio below 95% — “are more likely to be focused on the opportunities for you…to help solve customer problems, fill in capacity positions that are being evacuated, and so forth,” Steen said.
He also stressed the importance of relationships with markets. “And by relationships, I mean a deep understanding of which insurers are successful in which classes of business risk,” Steen said. “Because what that’s going to do, it’s going to help you point a customer to that solution providers in a really targeted way.”
His final piece of advice to brokers was to keep communication at the top of their mind. It’s already been discussed as important, but he emphasized that clients will need guidance not just for the rest of 2020, but well into 2021.
“What is the market going to look like [next year]?” he asked. “What can they expect? How can we help them set budgets and deal with this rising cost environment effectively?”
Feature image by iStock.com/annebaek