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?
I studied economics, finance and business in college. Insurance was a natural fit, particularly related to D&O insurance for publicly traded companies. Internships gave me practical work experience which led to an insurance job right out of college.
What trends are you seeing in the insurance industry or markets?
IPO markets are robust and the future looks bright, which drives attention to and the need for D&O insurance. The litigation landscape is challenging with securities class action claims against public companies at a 10 year high. California-based IPOs are particularly at risk with litigation rates in state court well above the trend line outside of California.
What advice are you giving to clients looking to purchase or repurchase insurance?
Insurance is one leg of the risk management stool. Take a strategic and long-term view of your risk management strategy in order to determine the unique risk profile of your company and the best use of insurance given your unique risk profile.
What 2 – 3 questions do you wish your clients would ask you?
- How do insurance brokers get paid? Are there options or different compensation models available which I (the buyer) should be aware of?
- What can I do now to maximize the long term value of my risk management programs for my company, including the insurance.
How are insurance products in today’s markets changing?
There is a trend for the disintermediation of the commercial insurance market, similar to personal auto insurance. However, complex risks require sophisticated counseling and guidance to ensure the right insurance programs are in place and to get claims paid. Transactional brokers will eventually lose the battle while those who engage with clients in a consultative, strategic way will thrive. There is more to insurance than the transaction.
What is the key issue you are facing as it relates to insurance products / policies today?
It is challenging to get entrepreneurs and business leaders of high growth companies to engage in a strategic discussion/process related to risk management.
What risks should clients be using insurance products to mitigate that they may not know they can use insurance for?
Despite the expansion in the awareness of cyber risk and insurance options, there remains a large gap of understanding amongst buyers of cyber liability insurance. One particular hot topic with very little attention is “fraudulent funds transfer”.