How to find coverage for your clients in underserved markets

Full disclosure of a client’s claims history (even if it’s elevated), as well as building trust in a collaboration between insurers, brokers and clients, can help move the needle on what would otherwise be characterized as tough or underserved classes of business, speakers said Thursday during a Canadian Underwriter webinar.

“Sometimes clients have to drink the Buckley’s,” said Philomena Comerford, president and CEO of Baird MacGregor Insurance Brokers LP and Hargraft Schofield LP. The reference is to a cough medicine that comes with the slogan, “It tastes awful, but it works.”

Similarly, a broker’s commercial client may balk at the cost or effort required to reduce the risk on their account, but that’s what it takes to find coverage in an underserved market.

“They don’t like it much sometimes, but it’s the only way that you know,” Comerford said. “You don’t take care of the client by just trying to hide or conceal the work on the business that you are placing…”

The same goes for relationships with industry partners, Comerford said during the CU webinar, Navigating the Rapids, which outlined best practices for historically challenging lines of business. Honesty is the best policy when brokers deal with underwriters in assessing the client’s risk.

“You have to show that you have a proven track record,” she advised brokers when talking to underwriters about risk in an underserved class of business. “And even if there’s something bad in that [business class’s risk] history, you have to say, ‘This happened, but this is what we’ve done to make sure that doesn’t happen again.’

“You have to get in front of that and discuss it,” she said. “You may have come off a really problematic risk, but you’ve got to show what the numbers look like at the end, and here’s maybe what it looks like with that surgery done.”

Comerford used the example of a taxi risk proposal her brokerage presented to Echelon Insurance — right in the middle of the pandemic. Among other features, the proposal included simulator training as well as inward and outward-facing cameras that are telematic-enabled in every single vehicle of a very large portfolio.

“We were so dedicated to making sure that every single driver is vetted using the exact same drill every single time,” she said.

Echelon Insurance president Robin Joshua admitted when the taxi portfolio first came through the doors, he wasn’t sure if it would be a good fit. “My first thought was, ‘Wait a minute. I’m not ready to get into the taxi business,’” he shared during the webinar. “It’s never performed well in our world, and how are you going to manage that risk?”

But after a detailed presentation, the insurer’s fears were assuaged. “They checked all the boxes — risk mitigation through data submission that we can analyze,” Joshua said. “That track history was superb and even the smallest risk mitigation, like having a rearview mirror between the passenger and the front, that’s so, so minor but it’s such a great prevention tool.

“All those things were there.”

This kind of honest and straightforward collaboration between carriers and brokers can really move the needle significantly on challenging lines of business, said Marc Lipman, president of Lloyd’s Americas. “Telematics is another way that brokers and carriers are collaborating to try and help improve the risk profile and behaviours of some of our shared clients.”