Difficult habitational and real estate market conditions may threaten to slow your business down, but following best practices for navigating emerging challenges and relationships can help ensure they don’t hold you back.

DON’T LET THE HARD COMMERCIAL REAL ESTATE MARKET SLOW YOUR BUSINESS DOWN

Ideas to help agents better serve client needs during challenging times

By Joe Mossbrook

With stricter underwriting standards and extensive restrictions across classes and geographies, it’s no secret that carriers have been pulling back from the commercial and habitational real estate market. Now, as many agents face renewal rates that are 20% or 30% higher than previous premiums, producers are left to reevaluate how to bind their accounts—and meet the needs of apartment, condominium and multi-dwelling building owners.

As capacity shrinks, it can be tempting to bind accounts with any program or carrier that will actually write the business. However, taking anything that’s available is often a short-term solution.

While these difficult market conditions may threaten to slow your business down, following a few best practices for navigating emerging challenges and building strong relationships can help ensure they don’t hold you back.

Think beyond standard markets

As carriers cut back on capacity or exit the space altogether, new markets are pushing to capitalize on market share, all the while being more conservative with the use of exclusionary wording, sub-limits and much higher wind and hail deductibles where needed. Water damage deductibles are even double or triple all other perils (AOP) deductibles in some areas.

Amid a challenging landscape, creativity is the name of the game. That’s where non-admitted markets come into play given their array of flexibility compared to standard markets for binding both traditional and non-traditional risks. For example, our team at HabPro Insurance —a best-in-class commercial real estate insurance provider specializing in package and monoline property for apartments and condominiums—has exclusive forms that help us meet the needs of all types of habitational risks at competitive rates. It all boils down to having the leeway and expertise to find creative ways to bind a policy.

Delivering value like this, especially in a hard market, is one of the reasons more and more agents are proactively seeking out well-credentialed non-admitted programs, not only viewing them as an option of last resort.

 Carefully consider carrier strength

As capacity shrinks, it can be tempting to bind accounts with any program or carrier that will actually write the business. However, taking anything that’s available is often a short-term solution. Binding accounts with a less-than-stellar carrier not only creates risk for your insured should a large claim need to be paid out and, in turn, risk for you in keeping the account long term. It also usually means you’ll be doing more work down the road to remarket the account as conditions continue to change.

Carrier strength is particularly important when it comes to excess and surplus (E&S) markets. Working with these markets may be a necessity for accounts that are difficult to place, but doing so doesn’t mean you have to sacrifice your standards. Accessing a program that features a proprietary partnership with an A+ rated national carrier can offer agents and insureds alike added peace of mind.

Look for opportunities to streamline service and claims handling

There’s no doubt placing accounts in a hard market can be a time-intensive process. This is another reason to find an insurance partner that’s equipped to handle any risk you bring to the table. To offset the need for more work upfront, look for opportunities to streamline other aspects of your day-to-day activities.

This can take many forms, whether it’s working with one dedicated underwriter or seeking out a partner with an in-house claims handling and management team to ensure fast, clear communication. Finding smarter ways to manage other elements of your workload means more time for prospecting and binding new accounts.

With renewals and future business on the line, doing more of the same will only get you so far. Whether it’s discovering an out-of-the-box approach or joining forces with an insurance partner that is fully invested in your success, making strategic moves today can keep your business moving forward at full tilt.

The author

Joe Mossbrook is the program director at HabPro Insurance, a real estate insurance provider specializing in package and monoline property for non-coastal apartments and condominiums. Built by NSM Insurance Group, a provider of specialty insurance programs, HabPro is available on a non-admitted basis and is focused on providing competitive coverage to the small to middle-market arena. To learn more, visit nsminc.com/habpro or contact Joe at jmossbrook@nsminc.com.

Additional Resource: Commercial real estate insurance provider