With underwriting performance deteriorating across several critical lines of insurance and insurers focused on emerging risks, insurers and reinsurers are pushing for larger and continued rate increases. We've recently experienced several consecutive quarters of incremental rate increases. The usual accompaniment of a market rate increase is intensified underwriting scrutiny and pulling-back of terms, i.e. a hardening market.
This is of particular interest considering the inflection point as the insurance companies struggle with industry advancements, growing exposures, and evolving landscape of risk. Insurers pulling the reigns on broader and better insurance coverage at a time when more is needed does not bode well for the purchaser.
Utilizing professional representation can be crucial to a business's ability to secure adequate terms and control pricing. Specialized knowledge of an industry combined with in-depth understanding of the client's business and risk profile will make the difference when communicating to an underwriting department. The broker's ability to make a case for improved or continued preferential terms at competitive premiums rests solely in ability to secure accurate and relevant data, and properly present to an underwriting department.
Brokers and clients need to go beyond the simple completion of applications and basic underwriting data to illustrate the individual corporate risk profile. Appropriately fielding underwriting and loss control inquiries will exhibit a better overall quality in the account and aid in underwriting comfort to offer the requested terms, conditions, and pricing. Adopting a risk management focus into the operations and decision making process will aid in short and long term objectives.