Farella’s Insurance Recovery Group lawyers regularly collaborate with and learn from different players and functions within the insurance industry. To provide more value to our readers, we have reached out to a series of insurance brokers to create the Insurance Broker Series Q&A.
How long have you been in the insurance industry?
How did you get into the insurance industry?
On campus recruiting at my Alma Mater at the Haas School of Business, U.C. Berkeley
What trends are you seeing in the insurance industry or markets?
In my role at Marsh, I oversee the Communications, Media & Technology Practice (CMT) for the Western Region. I see several trends impacting the market for CMT clients today. Among them:
- Clients continue to inquire about cyber breach coverage as Cyber risk continues to be a concern for clients and insurers.
- E&O policies are evolving in terms of the exposures they address and coverage they provide for businesses.
- Insurance continues to be challenging for Shared Economy/Gig companies that are needing to scale. This is especially apparent with respects to workers’ compensation. There are solutions available but shared companies need to be open-minded and willing to take unconventional approaches.
- Soft insurance markets and lack of investment income coupled with loss experience deterioration in liability and catastrophic lines are leading insurers to poor combined ratios and reduced profitability. Large scale acquisitions are likely to continue as a result.
- Market capacity is at an all-time high (supply) while demand is lower given the unprecedented M&A activity among CMT companies, leading to capacity chasing less premium dollars.
What advice are you giving to clients looking to purchase or repurchase insurance?
- The main advice I tell my clients is to tailor their insurance coverage to their specific business operations. Often times, insurance buyers think they can only buy off the shelf products when in fact insurance coverage is highly customizable.
- Another piece of advice is to work with a broker or risk management advisor that has experienced claims professionals who can help address ambiguous claims prevalent in E&O policies. Good claims people can help create endorsements to refine and address these evolving claim uncertainties.
- And lastly, I would advise clients to consider using insurance as a “selling tool” and come up with creative solutions. Insurance markets are very receptive to unconventional program structures given their need to innovate and desire to write more business.
What 2 – 3 questions do you wish your clients would ask you?
- What is your experience with clients in my industry?
- How can I purchase my insurance more efficient and effectively?
- How do risk analytics and data help drive better business decision for us?
How are insurance products in today’s markets changing?
Insurance products are evolving and becoming increasingly complex to fulfill the needs of CMT clients whose businesses are facing unprecedented change. Insurers are responding to new emerging risk areas with exclusions and attempting to create separate “silo” products outside of current insurance policies. That being said, coverages are not keeping up with the blistering market change in the economy.
What risks should clients be using insurance products to mitigate that they may not know they can use insurance for?
- Intellectual property, political violence, expropriation, trade disruption, warranty, reliance on digital supply chain