In The Public Eye: How Do You Control the Outcome of Your Renewal? With Data.
By Alliant Specialty
With so many uncontrollable forces driving this difficult market, Carleen Patterson and Courtney Ramirez, Alliant Public Entity, sit down and discuss what Public Entity risk managers CAN control. The data.
Welcome to the Alliant In The Public Eye Podcast, a show dedicated to exploring risk management topics and challenges faced by today's public sector leaders. Here are your hosts, Carleen Patterson, and Justin Swarbrick.
Carleen Patterson (00:18):
Welcome back, everyone, to another epic episode of In The Public Eye. Our focus on the last few podcasts has been on the difficult market. We've talked about the property market. We've talked about the liability market, the casualty market, and some of the uncontrollable forces that are impacting the insurance marketplace, whether we have nuclear verdicts, difficult class exposure, or even weathered driving marketing results. So, today what we want to do is focus on what our public entity risk managers can control, and that is data. An overall theme that we've had at the end of each of our podcasts is communication and data being king, and so today I've invited Courtney Ramirez, one of my colleagues in our Southern California office to join me, to discuss data and best in class submissions and what you as public entity risk managers can do to help control the results in the marketplace. So, before we get started Courtney, can you tell me a little bit about yourself and also your role here at Alliant?
Courtney Ramirez (01:19):
Thank you, Carleen, for having me. My name is Courtney Ramirez, as Carleen stated, and I work for Alliant. I've been with the company now for 15 years, been in the insurance industry for going on 20. I work with Public Entities across the nation. Anything from municipalities, medical, governments, states, school districts, higher education, transit, district, hospitals, and various other special districts. So, I really touch the gamut of public entity business across the country.
Carleen Patterson (01:49):
That's great because when you are working with your clients, you're working and taking experience that you have with some of your west coast clients to your east coast, and you know, every municipality's different and they have similar exposures, but none of them are the same. So, it's great to have you with us today. So, 2021, is the third year that we have been seeing a very difficult property market, liabilities started hardening last year, and this year the cyber market has just gone crazy. So how are your clients reacting to this marketplace?
Courtney Ramirez (02:24):
It's been a challenge. This year, in particular, our clients are still trying to recover from the pandemic and navigate this new world that we're in overall budgets are strained. So, employees are under so much pressure. And, you know, the people that we're typically working with are also struggling with how they deliver this bad news, especially in light of them being asked to reduce their overall budget, which is really tough. So, what a lot of our clients are doing now is they're evaluating risk and the different ways that we can work together to transfer it, including options to change what they may have been, the entity's sort of historical appetite, or buying philosophy. And when I talk about this, I'm really talking about changes to limit structures, increasing retentions or deductibles, maybe taking on a corridor, an aggregate deductible, and looking at other alternative risk financing options, like parametric type products and that sort of thing to help overcome some of these difficult budget constraints.
Carleen Patterson (03:24):
So, for you as a broker, when you're talking with your clients, how do you prepare for this hard market? You know, whether it's an existing client or whether it's a new client that you’ve just contracted with?
Courtney Ramirez (03:39):
Well, I think communication in this type of market is absolutely critical. So, communicating and communicating often is very important for most of my clients. We've had several discussions on the market, and we continue to update them as we get new information, whether that be, you know, a market changing their capacity or leaving a certain industry, or choosing not to cover an exposure or that sort of thing. And we're constantly looking at budgets with our clients, so trying to help them to adjust their projections so that ultimately, we can avoid any surprises. We don't want to put our clients in any situation where they're in the hot seat internally and they've exceeded a budget. So, that's been a big thing. Aside from the communication aspects, we look at options to help provide clients with ammo, for lack of a better term, to help them to make some of these difficult decisions. So, this is evaluating that risk tolerance and adjusting their overall program if necessary to help meet their needs.
Carleen Patterson (04:38):
Yeah, and I've done the same thing, really trying to get with our clients early and communicate and manage expectations. And that's the hardest part because without, you know, it's a great word, the ammunition to bring back to your management, to the finance folks, to the budget folks, you know, we don't want to have our clients standing on June 30th delivering a surprise to their board directors or their county supervisors. So that's really a great suggestion is to communicate and communicate early. So based on your experience, what do you think differentiates one potential insured from another in the marketplace?
Courtney Ramirez (05:20):
And this sort of market and really any kind of market for that matter data is going to be linked. So having that buttoned-up submission is really the difference between a client's file being put at the top of the stack or the bottom of the stack. And we certainly want our clients to be given that first-class consideration from all markets. When we're looking at a submission, we're looking to have our clients work together to ensure that the information provided is well, number one, accurate, and number two, and this is key done in the same methodology as prior years. So, what I mean by that is if you have always classified vehicles a certain way, and then you change it such as lumping, maybe fire department units into one item versus separating them out now into the vehicle weights that can skew things. And it just generates more questions. We see this a lot with municipalities that have water and wastewater, sometimes they'll lump the budget together, and then the next year they're separated, and it doesn't always add up. So really just going through that and making sure that it makes sense. And if it doesn't that there's a story to tell about why it's different, maybe someone new filled it out this year. And, just going through that extra couple of minutes, just to tell that story will go a long way.
Carleen Patterson (06:42):
That's a really good point because I always tell my clients as well, we are just telling your story to the underwriters in the insurance market. And I really encourage underwriter meetings because our clients are the best people to tell that story. And, you know, you talked a little bit about looking at creativity with regard to what the structure is going to look like and having that story in the background, whether it be, you know, maybe you changed TPAs. And so, their reserving philosophy changed. So being able to explain any differences in the data is really important, so that's a great point. So, one of the things you just mentioned was having a buttoned-up submission and that data is king. What kind of data are you talking about? Let's talk, you know, talk about property or even liability. What does that mean to have, you know, complete submission data?
Courtney Ramirez (07:35):
Well, from a property perspective, it's really going to come down to the cope information and the statement of values. And if your cope information has holes, meaning there are missing things like construction type. Then what the underwriters are going to do is they're going to rate you as worst-case scenario. So, we want to make sure that you are doing your diligence, that appraisals are being done on a regular, recurring basis. And that we're updating that SOV to include the most accurate information possible and really not leaving any room for them to model this, you know, the account it negatively because that will overall affect the premiums and the availability of coverage. For liability, I think the biggest thing from my perspective is making sure that the loss information is accurate. So, as you said, the reserving is huge because a carrier will really question the integrity of the data.
Courtney Ramirez (08:31):
If something doesn't look right, or if a claim was reserved at one amount one year and the next amount it's, let's say lower than it should be, then that will definitely generate questions and type of market. We don't want to have questions, especially on loss information. And speaking of loss information, something that I've found to be very helpful is if there is a history of a certain type of loss occurring, like an employment type loss, then creating that story. So, okay. We've had several losses involving employment practices or wrongful termination. Well, what's the common thread, and how have we overcome that to make sure that it's not going to happen again and communicate that in the submission.
Carleen Patterson (09:15):
You know what that is such a great example. And you know, that carries across DNL, EPL to the property as well. Maybe you have a large property claim, but you've done something to keep that type of claim from happening again. And that's the story that we need to tell the insurance market. You're absolutely right. And I think of the things to keep in mind when you are putting a submission together and when you're working with your broker to put that submission together, is that underwriters have a huge stack on their desk. They're seeing everything every single year because we have to market aggressively in this insurance market to make sure we're putting the most competitive program together. We're no longer living in a time where we could say, “Hey, we aggressively marketed last year. And so, this year you're getting a reasonable renewal from your incumbent. So, let's just go with that.” We're not getting that anymore. So, whatever we can do to make the submissions rise to the top of the pile you're right. That's exactly right. So, any other pieces of advice for our clients and prospects as they're in this insurance market, Courtney?
Courtney Ramirez (10:23):
Just be prepared. We know that it can be labor-some to complete some of these applications and really go that extra mile to make sure that everything is accurate. And the story is being told, but it really will go a long way if it's done and it's worth its weight in an investment and then communication. I mean, we are sharing information as soon as we get that, and communicating that to others internally will really help when we have to deliver that final renewal meeting message to you.
Carleen Patterson (10:57):
Thank you so much for joining us. I think your words of wisdom for our clients and prospects will be really helpful. We recognize this is a challenging time to be in public entity risk management, and we will continue to focus our podcasts on information and resources as we navigate 2020 and beyond.
Thank you for listening, and for more information, go to www.Alliant.com.
Alliant note and disclaimer: This document is designed to provide general information and guidance. Please note that prior to implementation your legal counsel should review all details or policy information. Alliant Insurance Services does not provide legal advice or legal opinions. If a legal opinion is needed, please seek the services of your own legal advisor or ask Alliant Insurance Services for a referral. This document is provided on an “as is” basis without any warranty of any kind. Alliant Insurance Services disclaims any liability for any loss or damage from reliance on this document.
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