Commercial insurance pricing in many regions and across most major product lines has been increasing in recent months. So it's important for insurance buyers to differentiate their risks and start the renewal process early.
Despite pricing pressure and increased underwriting scrutiny, insurance capacity generally remains sufficient — particularly for organizations that differentiate their risks. Working with your broker on the following steps can help ensure renewals proceed as smoothly as possible:
- Start early
Begin to strategize and collate renewal submission information at least three months before renewal.
- Be transparent
Anticipate that insurers will require more detailed underwriting information, and establish the most effective way to present it. Where possible, identify and use marketing differentiators, such as videos profiling risk control, operations, supply chain management, and other salient features of your risk management program.
- Identify your risk appetite
Identify your organization’s appetite for retentions, coinsurance, or exclusionary language, and understand what will constitute an acceptable renewal program.
- Capitalise on the value of your insurance broker
Ensure the insurance broker and individuals working on your account have experience operating in a transitioning market as well as strong relationships with the decision makers to whom the risk may ultimately be referred.
- Market your program effectively
The strength and size of a corporate relationship may play a role in the underwriting process. Marketing multiple program areas to an insurer(s) can help secure visibility and senior management involvement.
- Involve the C-Suite
Involving senior management in a presentation to insurers demonstrates that your company takes the renewal process seriously, and enables underwriters to ask them questions directly. It also builds trust, which will be crucial later in the process when trying to get markets to release terms early enough for them to be carefully evaluated, and for the broker to obtain terms from alternative primary markets and/or excess layer markets.
- Don't just focus on cost
Although budgets may well be challenged by increasing premiums, it is important not to lose sight of the big picture: Saving a relatively modest amount now by reducing coverage may have a negative financial impact should a claim occur.
- Establish claims and service protocols
To reduce the risk of a claim becoming adversarial, establish "best-practice" protocols that articulate the responsibilities and expectations for both insured and insurer. Similarly, agreeing on service protocols provides clarity about the expectation levels for response times, which will help to reduce potential conflicts.
- Stick to agreed milestones
Allow time before renewal to put capacity in place and agree on policy wordings. If a strict timeline is not adhered to, placements can lose momentum while insurers concentrate on other issues.
Despite the transitioning market conditions, competition among insurers remains high, and capacity plentiful. Working closely with your broker well in advance of renewal will help you secure favorable renewal terms and conditions and forge a partnership built on trust.