With the nation's financial crisis taking new twists
and turns every day, and the country's biggest insurance
organization in distress, buyers are taking a more proactive
approach to renewals; assessing carriers with much greater care,
while their organization's officers and directors look over their
shoulders, demanding stricter due diligence.
Let's face it, even under the best of circumstances,
renewal time is no picnic. While some brokers may have
previously been able to get by with renewals mostly consisting
of carrier assessments primarily based
on ratings, the savvy insurance buyer will let them get
away with that no longer. Current renewals must go
beyond that - not just looking up ratings but reading everything
that's in publications, and looking at up to the minute
information on the Internet in regards to the companies, such as
stock prices and their investment income.
And even though carriers may meet the minimum
requirements of some brokers, just meeting minimum
requirements is not enough, because I don't know what's hiding
in the background and neither do they. So I try to be very
conservative in picking the markets I want to work with, and
go to on a clients behalf. Blanketing the insurance market
place for a quote has never been the way to go; even more
so now.
One element that will most
certainly drive renewals now and well into 2009 will be
the amount of reinsurance available to the various
carriers. Reinsurers will have to ask more difficult
questions to those underlying primary carriers and look a lot
harder at them. Conversely, the primary carriers will have
to take into consideration how much capacity the reinsurers
are going to be able to give them.
When I'm looking at insurers now, I have to risk-rate
them based on their ability to not only pay claims, but to be there
for my organization, and our clients, in the years to come. I
want to see who's in it for the long haul. There have been several
insurers over the past few weeks that have had to ask for
significant infusions of cash from various entities. I have
to really look at insurers, risk-rate them and ask: Are
they really a player in the industry for which I'm considering
them? In what ways? Are they going to be here for
the long haul?
In the past I may have favored working in
an exclusively domestic marketplace. But at this point a
broker isn't doing their job if they don't consider the
European, London, and Bermuda markets where it makes sense.
After all, if you're in charge of managing the
insurance for your organization you had better be prepared to
supply information to your CEO, Executive Committee,
and/or board members, who are more knowledgeable, or at the
very least more aware now than ever and accordingly will
be asking more questions than ever. That I can assure
you.
Best wishes to each of you in the coming month and from everyone at
Armor we wish you an enjoyable Thanksgiving holiday!
Sincerely,
Anne Cline
President & CEO
Armor Companies Inc.
