Smarter Renewals in a Hardening Property/Casualty Insurance Market

For buyers in the casualty and property insurance market, there is no better summary of where things stand at the midway point of what feels like the longest year on record than one delivered in the Risk Management magazine article Hard Times, Hard Market.

“At the start of 2020, the biggest challenge for many risk professionals when it came to purchasing or renewing their insurance policies was navigating an increasingly hardening insurance market in which rates were increasing for almost all lines,” writes Lori Widmer. “And then the coronavirus pandemic hit.”

According to the industry analysts with whom Widmer spoke for the article, the impact of COVID-19 on the property/casualty insurance market will certainly be felt. However, the answer to the question of what the longer-term effects of the coronavirus pandemic will be on what was already a hardening market, is more difficult to pin down. Yet the painful reality is that rate hikes and capacity constriction can be expected to continue for the foreseeable future across many lines of coverage—including commercial property insurance, which was already in a hardening market cycle as the year began.

Risk professionals looking to purchase or renew property/casualty insurance in coming years face the grim prospect of higher premiums, added scrutiny from underwriters, and new coverage restrictions or exclusions. It’s essential that those responsible for making purchasing decisions understand what to expect and how to respond effectively. This means taking a smarter approach when putting together an insurance program.

But what exactly does a smarter approach look like? While the specifics vary from organization to organization, generally speaking, a smarter approach to renewals begins with data that informs and drives decisions made throughout the renewals process. Having the right risk management technology solution can help.

A Smarter Approach to Renewals Begins with Data

A smarter approach to renewals requires an overall assessment—the “big picture”—of the risk a business faces. “Taking a holistic view of risk can help identify ways to treat risk beyond just buying insurance,” writes Risk Strategies CEO John Mina in the Insurance Journal article How to Manage Risk in a Hardening Market.

Access to risk, safety, and claims data that tells the entire story is essential to forming a complete and accurate understanding. With such data available, Mina explains, “analytical tools like risk maps, 360 reviews, gap analyses and a focus on total cost of risk can help companies take a broader approach to managing and financing their overall business risks.”

A Smarter Approach to Renewals is Informed and Proactive

For risk professionals who determine the best path forward is insuring against certain risks, Hard Times, Hard Market provides tips for making the insurance-buying process “easier and more fruitful.” A common theme runs throughout the suggestions—a smarter approach to renewals is one that is both informed and proactive.

For example, buyers are encouraged to take actions that make risks more appealing to underwriters. “Active risk management demonstrates an awareness of exposures and willingness to proactively manage those risks,” writes Widmer. “Making insurers comfortable means identifying the problem areas that are probably increasing underwriter angst and finding ways around them,” writes Widmer.

To illustrate this point, Aite Group senior analyst Jay Sarzen, who was interviewed for the article, uses the example of a potential solution related to a business’s flat roof that might help make that risk more palatable to an insurer. “‘We have it inspected for leaks and damage every four years. But if we did that every two years, would that make you feel better? Would that lower my premium in any way?’”

Another suggestion focuses on the emphasis of an active safety and quality control program that can help to reduce rates and serve as a draw to insurers. Widmer cites Dan Conway, executive vice president and chief underwriting officer at Starr Insurance Companies, to explain. “‘You need to show the insurer you understand the insurance industry, that you are an active, engaged participant, and not just a premium payer. Be an informed buyer.’”

A Smarter Approach to Renewals is More Efficient

In Hard Times, Hard Market, the industry experts with whom Widmer spoke also call attention to the importance of being organized going into the renewal process. A well-organized, complete, and accurate submission can play a role in attracting the attention of overworked underwriters.

“Even before COVID-19, underwriters were already inundated with submissions because many companies are looking to ensure their pricing and coverage are competitive or they are looking for other options,” she writes. “That means tightening up every aspect of the submission. Red flags may include inadequate property values or loss control recommendations that have not been implemented. These could lead underwriters to set prices much higher or pass on the submission entirely.”

This suggestion may sound like a “heavy lift” to risk professionals already weighed down by cumbersome processes such as collection and reporting of exposure values. But that doesn’t have to be the case. In a recent webinar, Smarter Renewals in a Hardening Market: Strategies for Reaching Beyond the Status Quo, Gina Rothweiler and Neil Scotcher highlighted some of the ways in which Origami clients are using the system to address specific challenges related to the renewals process. Also demonstrated were ways in which the system can be used to streamline and better organize values collection and renewal submissions. For example,

  • Automating collection workflows and use of email templates eliminates the repetitive, time-consuming back-and-forth associated with values collection.
  • Improving ease of access and usability contributes to higher completion rates, as well as more accurate and timely data. Origami Risk makes it easier to complete forms, even when the values need to be entered by someone who is not a user of the system.
  • Simplifying status monitoring and tracking gives risk professionals the ability to quickly assess the progress of collection assignments, drives accountability, and ensures that collection campaigns stay on track.

A Smarter Approach Brings It All Together

Even in a hardening market like the one that is with us for the foreseeable future, a smarter approach to renewals begins with data, is informed and proactive, and relies on efficiencies to optimize the time available for putting together better submissions. Download the on-demand webinar, Smarter Renewals in a Hardening Market: Strategies for Reaching Beyond the Status Quo, to learn more about the ways in which Origami Risk can be used to support a smarter approach to renewals.