Canadian property and casualty insurance brokers are increasingly moving into commercial specialty lines to show their value by offering clients advocacy, advice and tailor-made insurance options.
In doing so, they’re tapping into the existence of a similarly entrepreneurial, flexible, solution-oriented breed of P&C insurance professionals — commercial specialty lines underwriters.
“When it comes to specialty coverage, you’re either looking to the experts or becoming the experts,” Kev Barty, manager of commercial lines at Echelon Insurance, tells Canadian Underwriter, when asked about successful methods for underwriting commercial specialty business.
“We’ve got a highly experienced national underwriting team, we have our in-house loss control team, and we partner with brokers who share our expertise in specialty…That’s a big part of it.”
There may be an occasion when an insurer has a ‘Eureka!’ moment of discovery. Perhaps they create a new product idea that fits a hitherto unknown niche commercial product, thus taking the market by storm.
But more commonly, commercial specialty underwriters lean into the creativity and expertise of their consumer-facing brokers to come up with unique insurance solutions for their business clients, says Barty.
For savvy underwriters, it’s about pivoting conversations with brokers away from the day-to-day, traditional risks in standard lines, and onto the broker’s challenging business accounts that have yet to find capacity because of a gap in the market. For the successful specialty lines underwriter, these conversations with brokers may be where the true nuggets of gold lie.
“We’ve had a couple of scenarios where there’s a hungry new producer who brings a lot of experience in X or Y industry, and that’s what they want to focus on,” Barty says. “It’s always interesting to learn how they landed in insurance, potentially landing in a brokerage that doesn’t have that kind of market capitalized. And so, Echelon might say, ‘What can we look to build?’
“Rarely is it a matter of setting up a new coverage that doesn’t exist. It’s more about shaping that appetite and the existing product offerings to fit the broker’s target market.”
Success is not about just talking to specialty brokers. Underwriters also ask many questions of the brokers’ commercial clients to gain a thorough understanding of their businesses and risks. Insurers’ loss control teams are an important focal point where these types of discussions occur.
“One of our core tactics is the assessment that our dedicated loss control team conducts for technical risks,” Barty says. “So, we’re really committed to getting on the site, getting a really good understanding of what this risk is.”
Underwriters can then cross-reference the specific knowledge they gained from the loss-control team’s site visit to their prior experiences with analogous special risks.
“I say it fairly often that there’s no real, truly unique risk for which there is nothing comparable out there in the market,” Barty says. “There are always things you can leverage in your prior expertise.
“So, while you may not be familiar with the specifics of that individual risk, you can look at trends in similar risks that you or your team are familiar with or have seen in the past. It’s really about sharing that knowledge, both within underwriting and with our specialty brokers.”
Of course, just because specialty insurers are willing to have a conversation with brokers and clients, that doesn’t automatically translate into coverage, Barty says. He notes a lot of new capacity is entering the specialty insurance market in Canada right now, but specialty insurers still have their eyes turned to underwriting discipline and profitable business.
This article is excerpted from one appearing in the October-November 2024 print edition of Canadian Underwriter. Feature image courtesy of iStock.com/Tymofii Riabets
