The Rates They Have Been A Changin’.

While at RIMS 2019 and since, seems like every risk manager, broker, property placement specialist, and carrier I have spoken with has brought up the fact that the market is firming, in a strong way.  Some industries harder than others, but no one is going to be immune.  Simply, everyone is going to pay more for property coverage.  I have seen predictions and some actual increases of up to 7.5% non-cat, +10% cat, +20% cat with losses, depending on industry.  And Hurricane Dorian is upon us.

And to a tee each person has stated, ever so politely, “…what are you as a valuation consultant going to do as the need for your services dries up.  No one wants higher values, higher rates, and hence hire you…”

My response, whether we ever work again or not, it’s time for everyone to be even more proactive and disciplined in their approach to PD / SOV submissions with the goal of increasing confidence and setting up risk distinction.   More specifically:      

  1. Create the team of resources needed to produce a transparent and trusted view of property and a compelling reason why to take, or prefer (read better rate), your risk over someone else’s. 
  2. Scrutinize your particular property risk just as an underwriter would.
  3. Take the time collect and develop the (extra) facts and data related to the reported values, creating accurate detailed analytics and values.
  4. Take a deeper dive into sublimits, blanket coverage amounts, retained cash, to make sure they are grounded in fact, and nothing is left out. 

Values are almost as likely to go down as they are up (because the way you have determined them could be upgraded or is outdated or just bad data). Either way, you STILL want to know you are covered or you should be getting a lower premium.  Not to mention, if values do go up, you are likely mitigating the higher end of the rate increase and your broker will work with you to create a good plan to address. Also see your valuation consultant who can arm you with the data to help.