Three Key Insights from Advisen’s 2014 Property Insights Conference
Experts from Marsh and elsewhere offered perspectives on property risks and insurance ranging from terrorism risks and claims to alternative capital and market trends at Advisen’s annual property insurance conference.
The conference, held recently in New York, was chaired by Duncan Ellis, Marsh’s Property Practice leader, who also moderated and participated as a panelist during the sessions.
The following were among the principal takeaways from the conference:
- There is strong support in government and across the insurance industry for the extension of the federal backstop for terrorism insurance. Rep. Peter King, a member of the House’s Homeland Security Committee and chairman of the Subcommittee on Countertintelligence & Terrorism, said during a keynote address that the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) works and costs taxpayers nothing. While legislation continuing the backstop is expected to pass and extend it for five years, Mr. King is pushing for a seven-year extension.
- Preparation, planning, and a clearer understanding of policy terms and conditions would make for a more effective claims process. Claims scenarios, or “dry runs,” could help organizations understand how their insurance policies would respond to a potential claim. Also, understanding the definitions of perils could help insureds clarify what and how a particular risk is covered.
- Innovation is alive and well in the property insurance business. Although the property insurance market is well-capitalized and insurance buyers are experiencing favorable pricing, industry innovation remains critical for risk professionals, panelists said during several sessions. Alternative capital, including insurance-linked securities such as catastrophe (CAT) bonds, is a significant driver in the property insurance market. Innovative CAT bond structures may increase insurer competition by offering organizations another way to insure specific CAT risks.