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Sponsored: Aspen Insurance

Rising to the Challenge

Aspen Insurance’s Onshore Construction team demonstrates how a dedicated specialty market can compete and continue to grow by attracting top talent, building relationships and maintaining sound underwriting principles and discipline.
By: | September 7, 2017 • 5 min read

The insurance market is constantly changing, creating challenges for insurers, brokers and clients. Margins are thin and competition remains aggressive in a number of sectors as companies seek to maintain market share and look at ways in which they can remain relevant.

Aspen Insurance’s Onshore Construction team — underwriting within a market segment that has also experienced its ups and downs — demonstrates how a dedicated specialty market can compete and continue to grow by attracting and developing top talent, building relationships based on unparalleled expertise and mutual understanding, and by maintaining sound underwriting principles and discipline.

“We have a great story to tell,” said Ryan Hucker, Vice President, Construction, Aspen Insurance. ”Our approach and focus as a specialty insurer allows Aspen Insurance to respond to our client’s needs while delivering exceptional service. We want the right clients and the right business where we are able to supply thought leadership and offer a value proposition, as opposed to just capacity.”

Leveraging Experience and Expertise

Ryan Hucker, Vice President, Construction

“Our team is by far our biggest asset,” added Hucker. “Brokers and clients recognize our deep industry expertise, from our global leaders to our production underwriters and risk engineers. I regularly hear people in the market talk about the talent we have on our team.”

Aspen Insurance operates as an integrated business with its highly-skilled underwriting and claims personnel working as “one team”. This approach creates a seamless end-to-end client experience, with knowledge transferring between underwriting and claims to the broker and client.

“We value long-standing relationships with our brokers and clients, and strive to provide tailor-made solutions to meet their needs. Our ability to evaluate their multiple exposures and commit capacity based on this understanding allows us to build meaningful, long-term partnerships within the construction segment. Our claims personnel possess the necessary skills to actively respond to complex claims scenarios and deliver on our contractual commitments. This approach, and successful execution of our commitments, creates demand for our involvement on future projects.”

The organizational structure at Aspen, characterized by a global footprint and culture of collaboration and sharing of expertise, allows the underwriting teams to appropriately evaluate construction opportunities, regardless of where or how a potential client approaches them. This teamwork is particularly visible when reviewing new construction projects as the Energy and Construction unit regularly works hand-in-hand with the Inland Marine and E&S Property teams. Each has a different area of construction segment focus suited to meet the needs of their client base. The teams review submissions on a case-by-case basis to determine which has the most suitable expertise, experience and resources to successfully underwrite the project. “We carefully consider the appropriate internal team so that we can provide the best experience for the client,” Hucker said.

Disciplined Underwriting

This culture of cross-team collaboration also allows Aspen Insurance to consider construction projects from new angles and offer additional coverage solutions from a multi-line perspective.

“We have recently expanded into civil infrastructure space, for example, and have a strong appetite to underwrite these complex risks,” Hucker said. Infrastructure projects – including transportation systems, roads, tunnels, bridges and railroads – are large endeavors that typically involve several stakeholders. “Civil projects represent unique underwriting challenges and often involve many different technical exposures. Our approach evaluates the technical aspects of the project work but also focuses heavily on the professionals performing the work and their risk control and mitigation strategies,” Hucker said.

Given their size and complexity, all civil projects are expected to encounter unexpected conditions, and the contractors overseeing the work have to be experienced enough to recognize the situation and develop appropriate solutions.

“We carefully evaluate the contractor’s history and experience as well as their key project management personnel. We determine the work activities they are self-performing, how much they are subcontracting to third parties, and what the selection criteria is for key subcontractors,” Hucker said. “We focus on obtaining a comprehensive understanding of the methods the contractor will deploy to monitor and control the project exposures which then permits an appropriate commitment of our capacity, coupled with meeting the client’s coverage needs.”

On energy-related projects, the technology involved and a demonstration of its acceptability is also a key factor in the underwriting equation. Whether it’s a simple cycle gas turbine, a combined cycle power plant, or a large renewable energy project, Hucker’s team examines whether the technology is tried and true, or more of a prototype.

“We have an appetite for prototypical technologies, but this exposure should be approached with caution. The research and development risks associated with newer technology should be mostly absorbed by the original equipment manufacturer (OEM) until they can demonstrate the technology is fit-for-purpose. Transparent communication between the OEM, contractor, owner, broker, underwriter, and risk engineers facilitates the evaluation and acceptability of technology risks. We then work closely with our brokers to tailor policy wording that appropriately apportions the technology risk.”

Looking Forward with Optimism

Looking ahead, Hucker is confident that Aspen Insurance’s Construction team is well positioned for the future. “Our brokers and clients want Aspen on their projects because they value our expertise and commitment to the construction segment. They recognize we are a long-term market and our intention is to be here over the long haul through prudent delivery of underwriting capacity coupled with a high level of innovation and service quality,” he said.

To learn more about Aspen’s Energy and Construction practice, visit https://www.aspen.co/Insurance/Insurance-lines/Marine-Aviation-Transportation/US-MEC/.

This article is provided for informational purposes only, does not necessarily represent Aspen’s views, and reflects the opinion of the authors in light of market, regulatory and other conditions which may change over time. Aspen does not undertake a duty to update the article.

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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 Aspen Insurance. The editorial staff of Risk & Insurance had no role in its preparation.




Aspen Insurance is a business segment of Aspen Insurance Holdings Limited.

2018 Most Dangerous Emerging Risks

Emerging Multipliers

It’s not that these risks are new; it’s that they’re coming at you at a volume and rate you never imagined before.
By: | April 9, 2018 • 3 min read

Underwriters have plenty to worry about, but there is one word that perhaps rattles them more than any other word. That word is aggregation.

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Aggregation, in the transferred or covered risk usage, represents the multiplying potential of a risk. For examples, we can look back to the asbestos claims that did so much damage to Lloyds’ of London names and syndicates in the mid-1990s.

More recently, underwriters expressed fears about the aggregation of risk from lawsuits by football players at various levels of the sport. Players, from Pee Wee on up to the NFL, claim to have suffered irreversible brain damage from hits to the head.

That risk scenario has yet to fully play out — it will be decades in doing so — but it is already producing claims in the billions.

This year’s edition of our national-award winning coverage of the Most Dangerous Emerging Risks focuses on risks that have always existed. The emergent — and more dangerous — piece to the puzzle is that these risks are now super-charged with risk multipliers.

Take reputational risk, for example. Businesses and individuals that were sharply managed have always protected their reputations fiercely. In days past, a lapse in ethics or morals could be extremely damaging to one’s reputation, but it might take days, weeks, even years of work by newspaper reporters, idle gossips or political enemies to dig it out and make it public.

Brand new technologies, brand new commercial covers. It all works well; until it doesn’t.

These days, the speed at which Internet connectedness and social media can spread information makes reputational risk an existential threat. Information that can stop a glittering career dead in its tracks can be shared by millions with a casual, thoughtless tap or swipe on their smartphones.

Aggregation of uninsured risk is another area of focus of our Most Dangerous Emerging Risks (MDER) coverage.

The beauty of the insurance model is that the business expands to cover personal and commercial risks as the world expands. The more cars on the planet, the more car insurance to sell.

The more people, the more life insurance. Brand new technologies, brand new commercial covers. It all works well; until it doesn’t.

As Risk & Insurance® associate editor Michelle Kerr and her sources point out, growing populations and rising property values, combined with an increase in high-severity catastrophes, threaten to push the insurance coverage gap to critical levels.

This aggregation of uninsured value got a recent proof in CAT-filled 2017. The global tally for natural disaster losses in 2017 was $330 billion; 60 percent of it was uninsured.

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This uninsured gap threatens to place unsustainable pressure on public resources and hamstring society’s ability to respond to natural disasters, which show no sign of slowing down or tempering.

A related threat, the combination of a failing infrastructure and increasing storm severity, marks our third MDER. This MDER looks at the largely uninsurable risk of business interruption that results not from damage to your property or your suppliers’ property, but to publicly maintained infrastructure that provides ingress and egress to your property. It’s a danger coming into shape more and more frequently.

As always, our goal in writing about these threats is not to engage in fear mongering. It’s to initiate and expand a dialogue that can hopefully result in better planning and mitigation, saving the lives and limbs of businesses here and around the world.

2018 Most Dangerous Emerging Risks

Critical Coverage Gap

Growing populations and rising property values, combined with an increase in high-severity catastrophes, are pushing the insurance protection gap to a critical level.

Climate Change as a Business Interruption Multiplier

Crumbling roads and bridges isolate companies and trigger business interruption losses.

 

Reputation’s Existential Threat

Social media — the very tool used to connect people in an instant — can threaten a business’s reputation just as quickly.

 

AI as a Risk Multiplier

AI has potential, but it comes with risks. Mitigating these risks helps insurers and insureds alike, enabling advances in almost every field.

 

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]