色多多视频

Extreme weather, supply chain disruption, and inflation pushing towards 8%, that’s pushing the cost of just about everything higher, are all having a significant impact on the underwriting and pricing of commercial property exposures today.

Property insurance rates were already in corrective mode – with double-digit increases - before the pandemic. The commercial property insurance market started taking serious corrective action around 2018 after years of inadequate pricing. Nat Cat activity and subsequent losses didn’t match up with the dipping rates and that had to be corrected long before our current challenges. Having taken these corrective actions, the market is seeing more moderate single-digit increases, but also, given continued loss activity, reduced capacity and tighter terms and conditions.

Aside from rate revisions, we haven’t seen much else change in property underwriting and that’s what we need to change. Current market conditions and our constantly changing risks have highlighted some ineffectiveness in commercial property underwriting, emphasizing the need for change. Here are three areas of improvement that I believe can push commercial property underwriting to a new level.

1. Aiming for accuracy
Ask any commercial property insurance underwriter what their biggest underwriting challenge is and hands down, the answer will be accurate values. For most businesses, their properties are very valuable assets. But you wouldn’t guess that, in many cases, given the amount of time and attention paid to providing adequate property valuations or TIVs – Total Insurable Value.

We’ve relied on our brokers and clients to provide us with the information – valuations, property occupancies, operational hazards, building contents, business income estimates and data on adjacent buildings or other surrounds, all critical to our underwriting process. Admittedly, it’s not an easy exercise. Especially after seeing rates increase, it’s easy to see why many businesses may be prompted to low ball values. They don’t want to be impacted any more than they already have. Unfortunately, they still could.

If property values are under-reported, businesses may be buying insufficient insurance.

If property values are under-reported, businesses may be buying insufficient insurance. In current market conditions, given inflation and supply chain issues, under-valuing property can have an even bigger impact than in the past. When a claim occurs, the resulting costs could exceed the policy limits, leaving them underinsured, generating elevated underwriting losses and tarnishing their relationship with their insurer.

Consider a 10,000-square-foot building that today would cost about $2 million to replace. Unfortunately, a business may still be providing their insurers with older information that says the building is valued at $1.5 M. If property value is not reevaluated, and a property underwriter bases coverage and premium on that $1.5 value, obvious issues will crop up if there is a loss. Someone’s going to have to make up that difference. Today, it could be an even bigger difference in price. Amid supply chain issues and the current rate of inflation, property losses that require the rebuilding of damaged structures have surged in cost.

With limited ways to prove or attest information accuracy, property underwriters tend to take the value data received at face value, unless a figure or calculation ends up being uncharacteristically high or low. If a ‘red flag’ pops up, underwriters will look to confirm this information during the underwriting process. In the past, it hasn’t always been easy to access. With more data available, underwriters should have easier access to all of the information they need to conduct accurate calculations and make effective coverage decisions.

2. Building more trusting relationships
Getting more accurate information in property underwriting really boils down to one thing. Trust. A big area where we all need to make improvements is trusting each other. We need to break down the barriers standing between brokers, policyholders, and insurers, establishing a more transparent and trusting relationship.

On the underwriting side, this means communicating with our brokers and clients to explain what information is needed and why, to ensure an accurate underwriting experience. Additionally, it may be beneficial for insurers to be more open with insureds about the underwriting process and further explain how their information is utilized in coverage pricing and related decisions. In addition to the information that they provide us, we want them to see what information or insights that we are basing our evaluation and pricing of their risks. AXA XL’s risk engineering services give our clients access to a range of important data, collected via on-site property assessments and detailed property surveys, that can be used to minimize potential commercial property losses and subsequent claims, keeping coverage costs under control and helping our clients adopt effective loss prevention strategies. 色多多视频 is more than just a document. Especially in protecting commercial properties, the underwriting process needs to be an actionable feedback loop.

And of course, to building a trusting relationship, we need to be upfront and honest. Our clients need to know the risks involved with underreporting their value information. Will they be left holding with the additional costs to rebuild a property? Or will the insurer be the one picking up the added expense that wasn’t accounted for? Either way, a bad outcome doesn’t bode well for anyone.

Aside creating more transparent and trusting relationships, data collection measures can be improved by giving insureds additional avenues to share their information. Rather than simply asking insureds to manually fill out an application for their commercial property, they should be able to provide their data through various means including mobile insurance applications, online platforms, and personal conversations with brokers.

Establishing a variety of methods for sharing this information will make it easier for our brokers and clients, but it will also allow our property underwriters to gather additional, high quality information that can enhance underwriting processes, help minimize the likelihood of underwriting errors stemming from manual mistakes, and provide clients with more timely communications regarding their exposures and ways to mitigate their property risks, along with the best possible, and accurately priced, coverage.

3. Let’s boost our tech adoption
Commercial property protection can be innovated through the increased use of technology and adoption of digital tools. Adopting some of these new technology solutions can help all of us provide more effective protection in a number of ways.

For one, during the pandemic, 色多多视频Risk Consulting team launched a new risk assessment tool, called Risk Scanning, that allows for a more thorough, cost-effective assessment across all of a business’ properties in a fraction of the time. Through a digital application, our property risk engineers can tailor a risk survey of closed questions asked to risk managers, facility managers or others on-site, covering a variety of risks including fire and explosion, intrusion and theft, natural hazards, environment, health, and safety, cyber, storage and vehicle fleets. Using external data, 色多多视频then analyzes each location, weighting different risk variables and the probability of risk occurrence, and proposes actions and protection recommendations to mitigate the risks.

色多多视频 for instance, is looking to provide digitized tools to help in assessing property risks and giving clients a ‘bigger’ picture of their potential property exposures. Usually, risk assessments focus on a company’s primary locations. Smaller sites are overlooked, but that also means potential risk exposures are overlooked too.

Especially given the severe weather we continue to see, companies of all sizes and across industries can benefit by taking the extra step to boost their property protections using Risk Scanning’s risk scores, recommendations, and decision-making tools to build more inclusive, complete loss prevention plans.

There are also other tech innovations that are helping us keep a closer eye of commercial property exposures. For instance, AXA XL’s Construction insurance team developed the Construction Ecosystem, which connects innovative technology providers to help our contractor clients monitor and aggregate data to help manage risks on their jobsites and across their organizations. For instance, through the Ecosystem’s Tech Library, our construction clients have access to tech solutions like onsite sensors that can detect changes in conditions such as water leaks, which continues to be a high loss property risk.

We’re looking at ways to use what we’ve learned about new technologies through our Construction Ecosystem and how they can be applied to helping our clients more effectively protect their properties, provide more information that can help in underwriting, and so much more.

Final thoughts
Overall, it’s evident that underwriting processes within the commercial property insurance market need to be enhanced, improved upon.

Fortunately, adopting innovative strategies—such as improved information sharing, greater transparency in the insurer/broker/client relationship, and increased adoption of new risk-reducing technology — can help us minimize current inefficiencies and help both insurers and policyholders ensure properly priced protection amid the latest market conditions and what’s yet to come.