Get smart: brokers urged to sharpen their act in hard market
Some brokers are risking failure by neglecting underwriters’ needs as the market hardens and capacity tightens, an underwriting agency principal has warned. Underwriting Agencies Council Deputy Chairman and Lion Underwriting MD Kurt Nilsen has published an online message on his company’s website outlining a robust “personal view” on current market conditions and how brokers need to adapt to them. What do you think? Leave a comment at the bottom of this article. He says underwriters are fed up with seeing a “scattergun approach” whereby potential insureds engage multiple brokers or multiple underwriting agencies to “cover all bases”. “The issue from this approach is that most roads generally tend to lead into the same Lloyd’s markets,” he said. “So the potential underwriter is seeing the same risk from multiple producers, sometimes with different information to make matters worse. “We have seen examples where underwriters have withdrawn from quoting altogether due to this approach, as they feel they are just getting used or price-checked.” This approach is a particular problem for hard to place property risks and Directors’ and Officers’ cover, he says. Mr Nilsen believes brokers would benefit from working with fewer “preferred partners”. “I feel that brokers need to work closer with preferred partners, gain their trust and communicate more in general in order to meet their expectations. “This might mean Lion Underwriting misses out on new opportunities, but … it might also mean we get to work closer with our supporting brokers to achieve more favourable outcomes. “At the same time we keep our underwriters onside by avoiding the ‘scattergun’ approach.” Mr Nilsen says brokers need to take more care over applications, with “an incredible amount” of “very average” quote submissions coming in with basic information missing. “We do of course also see some excellent and very thorough submissions, [and] these brokers are going to get a much better result. Underwriters will put out their capacity to these risks before considering the ‘average’ submissions.” Mr Nilsen told insuranceNEWS.com.au today that he considered the matter carefully before publishing the note, but decided honesty is the best policy. “Lloyd’s syndicates have restrictions on premium they can write,” he said. “They can be picky and choosy. “I wouldn’t say there is no capacity around, but it is tough and you have to manage the process properly. “Brokers have to understand we are in a hard market and they have to work smarter.” Click here to read Mr Nilsen’s full message.