3 Ways to Get the Most Out of Your Next Insurance Renewal
Many organizations renewed their property, casualty, and financial and professional liability insurance programs with rate decreases in the second quarter of 2016. Though favorable insurance buying conditions are expected to continue into the upcoming January 1 renewals (barring unforeseen changes), it’s important not to get complacent. How your insurance program is structured and priced depends on several factors — many of which are under your control.
Here are three ways that you can make a difference in your organization’s next insurance renewal.
1. Prepare Early. Oftentimes, the difference between a successful renewal process and a challenging one is the legwork risk managers do. We recommend a few essential steps that can position you for success, including:
- Starting the renewal process early.
- Meeting face-to-face with underwriters.
- Carefully reviewing coverage terms, conditions, and sublimits ahead of underwriter meetings.
It’s also important to maintain an open dialogue with your insurers throughout the year. This can help them be aware of any changes to your risk profile that would affect your coverage. And it can help you stay better informed about legal, regulatory, and industry developments that might be critical to your renewal.
2. Use Analytics. Data and analytics play an important role in underwriters’ decisions. Supplying high quality data to your brokers can help them develop insights to share with your insurers, which can help:
- Differentiate your risk. For example, catastrophe models are a key part of every property placement. Providing high quality information can help insurers better understand your risk, which can result in premium savings. Meanwhile, in workers’ compensation, analytical models can help demonstrate the success of your safety and loss-prevention programs.
- Better structure your insurance programs. Analytical models can also help you quantify your risk and potential losses, helping you to optimize your use of capital. For example, analytics can help you choose efficient program limits and retentions.
3. Explore New Coverage Options. With the insurance market generally favorable for buyers, now might be the time to consider new or alternative coverage options. For example, many insurers are open to considering more favorable terms and conditions. And in some cases, insurers are offering multi-year coverage — for which you can lock in favorable rates to protect your business for the next several years.
You may also want to consider marketing your insurance programs. As insurers aggressively compete for business, a competitive underwriting process may help you secure more favorable terms and pricing. Now may also be a good time to consider non-traditional or third-party capital that is increasingly entering the marketplace.
In any economic environment, it makes sense to uncover savings wherever you can. Today’s insurance market can provide opportunities to those that carefully plan their renewals.
For more on the latest trends in commercial insurance markets, listen to a replay of Marsh’s recent New Reality of Risk webcast.