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A Global Conversation
Broker Viewpoints

Insurance industry experts share their observations with AMBestTV on the many challenges brokers are facing.
  • July 2019
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Ed Hochberg

“Underwriters, and even brokers to some degree, love the idea of a hard market and prices going up, but in the end that's really bad for business because what happens is when prices go up it's only natural, from an economic standpoint, that the buyers, they learn to do without. They learn other mechanisms. They learn substitutes. We saw the same thing happen throughout time. In the mid '80s we had the liability crisis. We saw companies learn to self-insure and have captives. Those risks never made it back to the insurance market.

We saw the same thing happen in the crisis of the late '90s, early 2000s when reinsurance prices skyrocketed. A lot of working layer reinsurances never came back to the market.

We saw what happened after Katrina, Rita and Wilma, when property cat prices went through the roof. We then saw alternative capital compiling in and traditional reinsurance being substituted with catastrophe bonds and collateralized reinsurance, and that risk never came back.

That's what tends to happen, is that that exposure never returns to the original market, as the buyers look at substitutes and doing without.”

Ed Hochberg
CEO, North America

Cynthia Beveridge

“It's an education. [Brokers] need to be continually educated as to what's available, and we need to have people who are expert in those industries, so that we can understand who the clients are and what they're dealing with.

We like to take people from those client industries and not just be insurance professionals. We have buyers right now that want technical purchases made, and people need to understand their business, their industry.”

Cynthia Beveridge
Aon Broking, Aon Risk Solutions

Lance Ewing

“One of the things I make mandatory is that our underwriters have to come visit us. Because you can't underwrite behind a desk, right?

I know my broker has to come visit me, although they're not happy about that.

The fact is, they spend time with us and the more my underwriter understands my business, the much better off that they are, overall.

Hopefully, they can rate it based on the relationship not on some spreadsheet that's spit out of a computer.”

Lance Ewing
EVP, Global Risk Management & Client Services
Cotton Holdings

Robert Fellows

“If you look at [Canada's] marketplace right now, we're probably seeing the same issues that are seen in the U.S. marketplace. There's a shortage of capacity in some key areas and that's been driving prices up.

It's also had an impact on the fact that as companies cut back capacity, brokers and clients are finding it more difficult to find the capacity to fill in the coverage needs that they have. That's really having a big impact on our market and it's creating a lot of anxiety among clients and brokers.

Certainly, for the last number of years, it's been fairly easy to get your programs placed and pricing has always been fairly favorable, but that's all changing now in our marketplace, and that's creating opportunities for everyone.”

Robert Fellows
Head of Marketing Management Canada

Peter Garvey

“Pricing's starting to turn up. Not wildly, fortunately, but there does seem to be a fairly widespread, what underwriters, at least, are calling a correction. Especially in property rates, auto rates, in some states workers' compensation, and excess casualty.

It does seem to be, after what seems like decades of price reduction, a bit of an upturn. We'll see how people are challenged, particularly the big brokers who seem to force their will on the underwriters over the last couple decades. We'll see if they're up to the challenge that some of these younger folks who have not really seen a hard market.”

Peter Garvey
Epic Insurance Brokers and Consultants

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