Raj Brar, senior delegate and CPE underwriter at AXIS Capital, noted that previous sudden outflows of capacity in the market have left many clients and clients without carriers capable of completing their projects, and have encroached on bookbinders and bookbinders. covers that could not renewals. He believes this has highlighted the need for a sustainable and profitable market that can survive even the most tumultuous market cycles.
âProfitability is the key,â he said. âInsurers need to know what they charge and what coverages they offer that could result in loss costs, and be aware of changes in deductibles, changes in coverage and how that may affect their bottom line. “
Steve Cross, Head of Construction Unit at AXIS capital, recalled how a sustainable market is essential for end policyholders because, in the end, they are the people most inconvenienced by an unsustainable market. Customers can take advantage of a cheap deal when the market is at its lowest, he said, but it comes at a real cost. Inexpensive deals that have been taken out under very soft market conditions face challenges when it comes to extensions and finding coverage when multiple insurers have left the build space.
âThis is a very difficult message for the brokers to get to policyholders – for policyholders to find that money,â he said. âAnd for insurers like us, who are doing a part of this mid-term replacement, taking that risk at a time when there is a completely different risk profile, really has an impact on how we have to book and win. our bonus.
âThe other point concerns education, which is absolutely essential. I think a lot of underwriters are now learning to underwrite very well and there are some very good underwriters out there. But I think what has been lost is the understanding of how money flows in the business, and the implications of some of the decisions that are made at the start of a project and how they manifest themselves at the start of a project. during the life of the project and may have an impact on the results [years later]. “
Read more: AXIS Capital on building a sustainable future for the construction market
Cross highlighted the work being done by associations such as the London Engineering Group (LEG) around this piece of education, and how it is key to building a sustainable market in the future. The other way to create a sustainable account with an insurer is to have a broad and diverse income base, he said. AXIS has a very wide range of offerings and distribution channels, so it doesn’t just focus on projects over $ 500 million, or only deal with certain business niches. Nowadays, having a sustainable account means having a large account that does not focus on a particular construction niche.
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The broker’s role in building a sustainable future for the industry is “absolutely critical,” Cross said. An essential part of the tripartite relationship between the insured, the broker and the insurer, the broker designs the outline of the coverage and has many more interactions with the insured than the insurer usually does. As an extension of this, the broker has a much better knowledge of what the insured wants and needs to buy.
âBrokers have a great responsibility in transferring insurance requirements from the insured to the insurers,â he said. âAnd again, education is absolutely essential in this regard. Insurers and [associations such as LEG] all must collectively take responsibility for ensuring that, where we can, we educate brokers about coverage and how we as insurers [operate]. We, as insurers, therefore have to take some of the responsibility for training brokers, because brokers are absolutely essential. They are our sales force around the world.
On top of that, Anna Woolley, senior project underwriter at AXIS Capital, noted that brokers are the ones who are in direct contact with clients. They know exactly what kind of information is required, she said, and how to present it to underwriters in an effort to hopefully get the best deal for their client. Because the information that underwriters receive is essential in formulating the coverage and terms offered, the role of the broker in building a sustainable future for the market is clear and strong relationships with brokers must be developed and maintained.
âCommunication is essential between all parties,â said Woolley, âand it’s open dialogue and management of expectations. Brokers need to manage clients’ expectations of what we can offer and get involved early in the process. And I think it gives everyone the best result.