John Nixon, a former underwriter and an expert on property insurance, continues the discussion on how companies can better prepare for going through property insurance renewals. Part II focuses on how to improve the format of your company’s submission to insurance underwriters.
- Underwriters’ in-boxes are overflowing with new business submissions. Even if you’ve created the right conditions for competitive pressure, and you have the best data, if your submission can’t be efficiently processed, it will either be declined or go to the bottom of the pile.
- Underwriters don’t have any time to invest in manually re-keying data, and only limited time for massaging spreadsheet formatting to make it compliant for import into their systems. Import-ready spreadsheets are appreciated.
- Basic Property Schedule Spreadsheet Guidelines
- MS Excel, not a PDF. PDF files cannot be imported.
- One spreadsheet row per structure/building (sometimes per section).
- Aggregating values by site/campus is not in your best interest:
- fire accumulation, percent deductible application, and flood analysis
- all improve with more detailed reporting.
- Supplement street addresses with columns for latitude and longitude. Street addresses are “close-enough” for underwriting homeowners’ policies, but accurate coordinates are needed for high-value locations on large, multi-building parcels, especially for flood analysis.
- Year Built and Year Roof Update (not patched); both formatted YYYY.
- Roof Age is critical, let the computer calculate age from the year.
- Sprinklers and Alarm details. These easy credits are missing from many SOVs.
- Flood Zones: You want these agreed by underwriters before a loss.
Tip: If you can print all the columns of your spreadsheet one page wide (even legal sized paper), and the print is large enough to read, you’re probably missing critical data elements.
4. Use of CAT models is no longer limited to coastal wind and earthquake exposures. It’s becoming much more common for models to be used for underwriting Inland Wind/Hail, and Flood.
- CAT model results drive underwriters’ attachment, capacity, and pricing.
- CAT model results are extremely sensitive to missing or unknown data.
- In my experience, results can be impacted more than 20%.
- It’s in your best interest to add additional columns of data to your property schedule for both AIR and RMS CAT models.
a. Claims History
- You should supplement your claims history with narrative explanations of lessons learned, exposures no longer present, changes in terms (higher deductibles) that you want to be considered.
- Don’t try to hide claims by reducing the number of years reported. Underwriters will find out by demanding the missing years be reported, or by checking the files they maintain (even on accounts they don’t write).
- If you have a good story to tell, tell it. Whether it’s a favorable history of addressing loss control recommendations, investments in risk improvements (roof updates, sprinklers), or management programs to reduce or mitigate loss experience; these will help the underwriter advocate for your account with their senior management.