Imposing complex, out-of-the-box commercial risks can be difficult regardless of market conditions. As the insurance market experiences a confluence of trends that have occurred over the past two years, commercial insurance brokers will have to work hard to determine their go-to-market strategy. These depend on the size of the client and the complexity of the risks.
Small business accounts with simple risk profiles may be well suited for standard underwriting products that leverage artificial intelligence (AI) and machine learning to provide fast, inexpensive, low-touch insurance solutions. Larger and more complex risks, on the other hand, tend to require a more bespoke approach, requiring brokers and underwriters to work together to create unique insurance and risk management solutions.
Jeff Smith, director of commercial insurance at Intact Insurance, said: “There are many opportunities for brokers and underwriters to work together to add value to their clients.”
Automating simple transactional business has multiple benefits for commercial line brokers. This increases distribution efficiency, reduces administrative burden and costs, and eases the burden on the underwriting desk (which was piling up on the hard market). client.
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“Today’s customers expect a hassle-free experience enabled by technology,” Smith told Insurance Business. “Brokers and underwriters are on the same page, working together to meet client expectations. Brokers should always provide advice, whether it’s a small business account or a large corporate account.”
According to Tim Geddes (pictured), Chief Sales Officer (CSO) of HUB International, for larger and more complex commercial accounts, more collaboration between brokers and underwriters is required for a truly customized solution. It requires a lot of collaboration.
“This is a long-term strategy that requires brokers, carriers, risk managers and clients to coordinate and identify their overall risk planning and appetite for both insured and uninsured risks. Yes,” said Geddes. “As a typical risk, if the broker is not satisfied with the pricing and coverage, they will try to move the business. , will drive the market up and down because they understand that everyone is working together.”
Geddes, like many commercial insurance brokers, felt somewhat disappointed during the hard market’s heyday. This is because some (but not all) insurers have dramatically changed their risk appetite and reduced long-term customers at renewal instead of continuing to invest in long-term relationships. This is the exact opposite of what brokers want, which is ‘consistent underwriting’ regardless of market conditions.
Geddes would like more clarity on the risk appetite of commercial insurers. he said: Many companies fail to demonstrate a strong and detailed risk appetite, and in some cases that appetite is constantly changing.
“Brokers want the best possible chance to close a deal. We work hard to get the strongest coverage and pricing for our clients and to achieve that We need to work with our carrier partners on their risk appetite.”
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The HUB CSO said a good underwriter will be happy to entertain conversations about complex accounts, but that’s because the broker conducts proper due diligence on the client and provides adequate information and risk reporting. to ensure that your submission is as strong as possible. As market conditions improve, the quality of submissions continues to matter.
“Brokers and underwriters need to jointly plan for success,” says Smith. “When underwriters ask brokers questions, we are looking for important ‘must-know’ information. We ask relevant questions because we want to find the smartest underwriting approach that adds value to our clients. Commercial underwriting is all about being open-minded and looking for the right solution for your client. ”
Standardized vs. Tailored: There is room for both in commercial insurance
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