Construction Power Panel: How can brokers help their clients?

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Beck agreed with Creedon’s view, saying that in addition to dealing with supply chain slowdowns and disruptions, contractors have had to deal with the “availability of labor and materials to complete projects on time. Contractors had to find good workers based on the condition and location of their projects.

Gloriod, meanwhile, cited vaccination mandates by private employers as a work-related concern that affects unvaccinated construction workers. One question that employers need to understand is “how [to] certify whether people are vaccinated or not [or] unvaccinated, how [to] deal with this with the owners and how [to] avoid delays and have contractual protections,” he said.

In terms of how underwriters’ approach to risk has changed in light of the pandemic and market hardening, a major consideration is to differentiate account experience ratings and between primary and excess investments. .

Beck said this issue highlights the importance of not only telling a story to the market, but also “having the data behind the story that is going to determine whether or not [the risk is] perceived as above average, or average, or below average”.

Given the large remaining capacity to place business, underwriters must be able to differentiate themselves from the competition by being “detailed in all lines of business on this [they are] from an operational point of view. The difference, from my point of view, between the primary and the excess of old, you complete your primary placement first, then you enter the market of umbrellas and excesses to complete the tower according to the needs and the desires of your customers,” she said.

Gloriod agreed on the need to show underwriters why a certain company’s risk profile is better based on past and present performance and considering the need to mitigate or prevent future losses for clients. While he observed intense competition in primary programs, he said surplus markets require relationship building, especially given the size and profile of some accounts. He pointed out that at the upper end of the market, the biggest customers are “looking to buy [more than] $500 million in excess limits. There is still a shortage of capacity, and we need more capacity to enter the market at these higher excess levels. »

From Creedon’s perspective, in addition to separating the big risks from the good ones, claims control and claims management results are also important. Another market development is the tendency of underwriters to want more direct interaction with executives or risk managers in order to get to know their clients better.

In such a complex market, brokers need to offer best practices to help their clients. Creedon emphasized the importance of communication and data collection on jobsites, as well as ensuring that it is “properly communicated to underwriters so that they hear the real risk…and [looking at them] differently with all these technologies coming out of construction sites. He said that this factor is likely to change the market in the future.

Gloriod supported Creedon and Beck’s views on the importance of communication at the beginning of the relationship with customers. Due to the presence of a two-tiered market, another key consideration in this line of coverage is knowing which underwriters clients will encounter. Certain questions also arise in relation to data and risk profiles: “How do they take their data? How do they take their operations and how do they organize that so that their best possible story gets the best possible result? » Another effective practice, especially for accounts that have had construction defect claims in the past, is to ensure that quality control professionals work closely with underwriters during implementation. plans.

Apart from societal issues, such as cyber threats and natural disasters affecting construction insurance, another factor influencing the umbrella market is the presence of drivers who encounter road accidents while delivering materials, thereby increasing the cost of repairing vehicles, Beck said. Litigation, particularly the growing number of court cases and the awarding of very large settlements to injured parties, is also a factor related to insurance claims and the market.

Other issues that may impact construction insurance are an aging workforce and mental health exacerbated by the pandemic, Creedon said. Inflation and labor shortages, which lead to higher costs, are factors cited by Gloriod. Nonetheless, panelists agreed that the market is in a good competitive position but needs to stay ahead of project extensions. From a construction and insurance perspective, Beck stressed the importance of ensuring operational efficiency when managing project extensions as well as doing a “health and wellness check of a financial point of view” so that companies can adapt well to changes in the market.

Watch the full interview here

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