6 Risks Driving Commercial Auto Losses
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In the space where large property brokers play, it’s important to use capital responsibly.
For instance, consider all of the components of a state operation. This can include buildings, agencies, officials and boards along with universities, parks, airports, and in some cases, sports arenas, as part of the package. Another example is a multi-media organization. Risks involve network and distribution, and also entertainment and film/video production exposures. A major retail chain, with tens of thousands of locations from coast to coast and all of the stock and cash flow exposures that are critical business assets, is a third type of a complex operation.
And all of these require coverage.
“Brokers need a stable partner with the ability to offer larger property lines. As part of Nationwide, we have a competitive edge to offer significantly more in-house limit capacity than many other carriers,” said Tom Jurgens, senior vice president, Brokerage at Nationwide.
Though Nationwide has the capital to handle high limits, it is very strategic in its approach to writing these risks. For John Brunette, senior director, Brokerage Property, this means thinking outside a very big box to come up with solutions that provide the perfect balance of protection and profitability.
“The key is leveraging capacity deployment throughout the risk,” he said. “When we deploy capacity in lower layers, we’re also looking to deploy additional capacity in the excess layers. Understanding the concentration and knowing where you can add more –that’s what thoughtful deployment of capacity is really about.”
Brunette also emphasized the importance of taking a mindful, measured approach to risk, especially in today’s insurance and financial landscape.
“The economy has improved, and there is capital coming off the sidelines,” he said. “There are lots of deals being made, but many of these investors are not insurance people, and as such, often don’t fully understand the exposure involved.”
For Brunette, this starts with adequately accounting for the catastrophe footprint of the risk and also looking at the design of a building.
“When you look at building design, you want to make sure developers are not skimping on materials and know the building will survive if a catastrophe event should occur,” he said. “You also want to look at ongoing site maintenance.”
But building design and structure are just the beginning of a good risk. Other factors Brunette takes into consideration include behind-the-scenes operations, such as electronic surveillance and other protection like sprinklers and alarms. Also, understanding the exposure and matching that with layer structure is critical.
“If I’m insuring a risk in Missouri, I don’t want to be in a position where the totality of the exposure is tornado driven,” he said. “The key to that is spread of risk and attachment point.”
Brunette, who employs a philosophy that includes “managing, measuring and monitoring” when it comes to effective catastrophe underwriting, believes in constantly staying on top of trends and patterns to make sure the solutions he provides are appropriate.
“Insurance is never a ‘one and done’ kind of thing,” he said. “If you’re going to responsibly write a risk, you need to make sure you are not just on top of the game, but ahead of it.”
An expert in large, complex property accounts, Nationwide writes primary and excess layers for business conglomerates with a multitude of components and diverse requirements though its excess and surplus Brokerage Property division.
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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Nationwide. The editorial staff of Risk & Insurance had no role in its preparation.