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24C — September 28 - October 11, 2018 — Fall Preview — M id A tlantic
Real Estate Journal
I nsurance
he good news is that, for most insureds and lines of Coverage, it remains By Brian Ruane, JGS Insurance Current insurance market conditions and what you can do to achieve an optimal insurance program T or series of events significantly depletes Industry Surplus. Regardless of market condi- tions there are steps you can take to obtain the optimal Insurance Program:
development in areas susceptible to windstorm, flood and earth- quake perils, an aging workforce, distracted driving and an erosion of common law defenses in many jurisdictions. As respects natural and man- made catastrophes we know they will occur we cannot, however, predict how many and how large they will be. The 10 year average, Globally, for insured losses from all Catastrophes is $58 billion. In 2017 the total was a record setting $144 billion in insured Catastrophe losses. Hurricanes Harvey, Irma and Maria com- bined with wildfires were respon- sible for $106 billion of this total. Many predicted that because
of the worst year on record for insured losses Rates would rise precipitously for most Buyers. However, while last year's results suppressed industry income it failed to erode its substantial and growing Capital Base. The Capital Base is Industry Surplus and that figure rose to a record setting $752 billion at year end 2017. This is essentially the Sup- ply of Insurance. Industry Surplus combined with alternative capital sources like Catastrophe Bonds provides ample financial resources for insurance companies to meet the needs of its customers and, to this point, offer competitive pricing for most Insurance Buyers.
Attritional losses, which are defined as losses other than ma- jor losses, are getting easier to forecast and therefore improves Insurers ability to accurately price their Coverage. However, Black Swan Events, man-made and natural catastrophes and emerging issues, some heretofore unanticipated, render accurate pricing a somewhat elusive goal. Examples of new and emerging issues include cyber-attacks, acts of terrorism, escalating medical cost inflation and more comorbidity cases, an increase in the frequency and severity of severe storms, increased property
a buyers mar- ke t desp i t e the number of particularly de s t ruc t i ve Hurricanes in 2017. The ex- ception is Au- tomobile In- surance where
1. Select an Insurance Broker and Carrier who understand the unique needs and challenges of the real estate industry. 2. Meet with Underwriters with your Broker. Personalize the process and help tell your story and openly discuss claim activ- ity particularly what steps may have been undertaken to prevent a reoccurrence. 3. Start the renewal process early and request Quotes at least 30 days prior to the renewal date. 4. Request options at various deductibles and limits. 5. Review all open claims and make sure the Reserves are ac- curate and fair. 6. Provide status on any Sub- rogation efforts. 7. Use Catastrophe Modeling for Windstorm and Earthquake exposures, where applicable, and make sure all data used by Insurers to calculate their expo- sure and develop their Premium on your account is updated and thorough. 8. Make sure you understand Ex- clusions and consider purchasing coverage to expand your Program. Examples include Environmental Insurance, Cyber Risk, Employ- ment Practices Liability and the coverage limitations that are part of Federal Flood Insurance. Many may not be aware that Federal Flood Insurance is ACV not Replacement Cost , that there is no coverage for time element exposure such as rents loss and the maximum limit offered may not be adequate for your needs. 9. Insurance Contract Lan- guage can be confusing for most Buyers. Make sure you under- stand the exact definitions of what constitutes a “Named Storm”, how is a “Named Storm” different from a Hurricane, what is The Exact definition of “Flood” and how is it different from Wa- ter Damage, storm surge, wind driven water and rain. People often conflate the policy defini- tions of wind, flood and water damage. They are, generally, much different. 10. Request a periodic update on market conditions so you can more accurately prepare for up- coming renewals and provide an accurate forecast. Communication, understand- ing and anticipation are all part of achieving the best Program with no surprises at renewal time or at the time of claim. Brian Ruane, JGS Insur- ance.
Brian Ruane
Insurers have lost money for 5 straight years. As a result, many are experiencing increasing Pre- miums for Automobile Coverage. The bad news is that this generally favorable condition can quickly change if one event
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