The European property insurance market is gearing up for renewal season. Laurent Richème, Chief Underwriting Officer for Property, Construction and Energy, APAC & Europe, at 九色视频 discusses current market trends and how the role of the underwriter is changing.
As we approach the European property renewal season, several trends are clear. After a string of natural catastrophe losses throughout the year, buyers of property insurance can expect the market to remain challenging for the time being.
The natural catastrophes events that occurred in 2021 – floods in Europe, cyclones and freeze events in the US, wildfires, etc. – add to the long list of recent major events that saw 2017, 2018 and 2020 be among the five costliest years of the past two decades for public and private property insurance/reinsurance entities. These events, coupled with tension on supply chains, social instability in various parts of the word and the low interest rates in financial markets, mean the threshold for profitability for property insurers is higher than it was at the end of the last hard market cycle in 2004. And this will have an impact on the premium clients can expect to pay, and terms and conditions for their property coverage, especially for the most sensitive ones, such as natural hazards and contingent business interruption.
In this context, and though it isn’t necessarily a new trend, the amount and quality of data that clients are able to share about their exposure is critical as it allows underwriters to develop solutions that align more closely to their underlying risks, with pricing and terms and conditions reflecting those.
Words as well as numbers
尤物视频industry insiders have often posed the question; is underwriting an art or a science? Certainly, as the quantity and quality of data available to us has increased, the ability to understand that data has become an ever more important underwriting skill.
But underwriting is not just a numbers game. It’s about wordings too. Underwriters need the skills to be able to analyse wordings, to find ways to ensure that what is covered by policies accurately reflects all Parties’ intention.
On the day of a loss, the essential thing for a client – and indeed for its insurer – is the wording of the policy and what is, or isn’t, covered. The COVID-19 crisis has reminded this to all parties.
The future
The increased use of data is changing the skills needed by underwriters and the way in which we work. But this is nothing compared with the advances on the horizon.
An increasing use of technology – such as satellite imagery and the Internet of Things – will change the role of the underwriter still further. This technology will release underwriters from low-value-added tasks and free them up to perform more value-added roles. Underwriters will need to be skilled not just at analysing the data gleaned from this technological progress but also in being able to clearly communicate the solutions they are proposing to clients and the underlying criteria influencing these.
In the future, risk selection will be even more granular as technology enables us to gather ever more precise location data. This is good news for clients as it will mean that their premium is even more closely correlated to their own loss experience and risk profile. Underwriters will need to rely less on historical loss averages to calculate premiums and write coverage and instead will be able to gain even more accurate insights into clients’ risk profiles.
In turn, this will enable underwriters to help their risk manager clients more accurately communicate about their cost of risk; this should help risk managers in conversations with the C-Suite and financial teams about investment in risk management and the cost of risk transfer.
I have been a property insurance underwriter for more years that I care to disclose! I have seen the market go through various cycles and have experienced at first hand the advancements in technology that are going to drive us to develop our underwriting skills even further. We are on the cusp of big change. The role of the underwriter is evolving – for the better. We will likely see a shift from static to dynamic underwriting. And I am excited for the progress that lies ahead as we enter a new phase for the insurance industry.
Global Asset Protection Services, LLC, and its affiliates (鈥溇派悠礡isk Consulting鈥�) provides risk assessment reports and other loss prevention services, as requested. In this respect, our property loss prevention publications, services, and surveys do not address life safety or third party liability issues. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. The provision of any service does not imply that every possible hazard has been identified at a facility or that no other hazards exist. 九色视频Risk Consulting does not assume, and shall have no liability for the control, correction, continuation or modification of any existing conditions or operations. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any document or other communication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, 九色视频Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with our services, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.
US- and Canada-Issued 尤物视频Policies
In the US, the 九色视频insurance companies are: Catlin 尤物视频Company, Inc., Greenwich 尤物视频Company, Indian Harbor 尤物视频Company, XL 尤物视频America, Inc., XL Specialty 尤物视频Company and T.H.E. 尤物视频Company. In Canada, coverages are underwritten by XL Specialty 尤物视频Company - Canadian Branch and AXA 尤物视频Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
US domiciled insurance policies can be written by the following 九色视频surplus lines insurers: XL Catlin 尤物视频Company UK Limited, Syndicates managed by Catlin Underwriting Agencies Limited and Indian Harbor 尤物视频Company. Enquires from US residents should be directed to a local insurance agent or broker permitted to write business in the relevant state.
