Following a quiet loss year in 2009 and strong profits from most property insurance markets, 2010 presents a different property market from 2009. The trend toward higher property rates has largely disappeared and the immediate future is much brighter for most buyers of property insurance. Some insurers are looking to employ more capital and resources in the property sector over other lines of business that have been mired in a soft cycle for years. The limited hard property market of 2009 is largely behind most insurance buyers for the foreseeable future.
“People need to recognize what’s going on in the property insurance market and identify early a strategy to take advantage of the current competitive market for property insurance,” says Brian Andrews, senior property broker of the National Property Brokerage Group, Aon Risk Services Central, Inc.
Smart Business spoke with Andrews about how to mitigate the potential for increased cost, the steps to effectively negotiate a property insurance renewal and how to leverage your options.
How can CEOs mitigate the potential for increased insurance costs when it comes time to renew their policies?
Negotiating property insurance is similar to negotiating a loan or line of credit. The better the information, the more confidence an underwriter has in your operations.
This means understanding your risk profile so that you can effectively represent your risk in the most positive light. Are your facilities constructed and protected appropriately for your particular operations? If they are, this is a tremendous negotiating point. If not, what other steps do you take to protect your property/business income? Interest in loss prevention is the No. 1 quality insurance companies look for in underwriting property insurance.