With Valentines Day upon us, we usually think about what we value about that special person and how they enrich our lives. So, let’s look at this from an insurer viewpoint and think about things we value and how it improves our company. While the list can be long and worthwhile to contemplate, this article is about commercial lines and a list of why it’s easy to love more of this type of business.
Higher rates can now be charged - while home and auto are limited in how much we can charge due to regulation and competition, commercial lines can be offered at higher premiums due to a hard market that is likely to last for several years.
Less worry about the competition – some insurers are now getting larger premiums for commercial risks including farm business while competition based on cutting pricing, is less than before. Time to take rate increases but just enough to be a little less than those large commercial carriers, so you get the business but still enjoy more profitable premiums.
Coverage improvements can be made – with more premium available in commercial lines accounts, better coverage can be provided without higher loss ratios. Insurers can review what additional coverages can be provided but were reluctant to add before. If not familiar with what additional covers are attractive, some research into what is being provided is helpful, in order to update your wordings.
Risk management enhancements are more valuable – with the higher premium volumes on lower risk commercial business improving profit, improvements on risk management can reduce claims further leaving more profit on risk managed accounts. It can also provide more money for risk inspections and risk audits to ensure effective underwriting is being done.
Attraction and selection of risks can be increased - the opportunity exists for better risk selection due to the attractive rates now being charged. Underwriter training and commercial underwriting manual improvements can be done to improve quality of risk selection, so that more of the profitable risks can be written. With more commercial abilities, larger commercial risk can be written with the confidence of stronger risk selection, correct coverages and better risk pricing.
Brokers will “love” your company more - as you show your commercial expertise more, brokers will see this and be attracted to your company to place more commercial business. Brokers are always on the lookout for additional commercial players who demonstrate good commercial insurance knowledge, risk selection and adequate pricing in a hard market.
Board Directors will appreciate the changes - with a growing profitable commercial lines business, larger premium volume, lower loss ratios, happier brokers/agents and enhanced business community support – what’s not to love?
Competitors will “love” you less – with your improved commercial attractiveness combined with the community values, that only mutuals provide, you will be seen as stronger competition to those larger commercial stock insurers. They may be jealous of your growing commercial lines abilities and favour within the broker community, as you might capture the “hearts” of their commercial customers.
If you want to improve your commercial “attractiveness”, CIMP has the experience and knowledge to assist you in this worthwhile endeavour. Now may be a good time to do some work behind the scenes, to get ready for post Covid opportunities.