• Maintaining favorable terms and conditions. A thorough review of exposures can help determine the optimal carrier(s) for the insured’s portfolio while developing and driving coverage terms and conditions. Leveraging market influence and knowledge, insureds can create a competitive situation, resulting in coverage that is capital-efficient and comprehensive. With improved terms and conditions, USI Insurance Services helped a client fill coverage gaps for uncovered loss exposures over $1,000,000.
• CAT modeling. This is critical for driving capital efficiency in structuring property coverage. For example, flood losses that exceed the flood limits purchased will result in significant underinsured claims. Insureds must maintain adequate protection for their unique exposures.

Premium Strategies

• Leveraging COPE data. A deep dive into COPE data can provide more accuracy in underwriting and create a premium impact. Because carriers use third-party data sources and modeling tools to capture and evaluate property exposures, insureds can receive negative results unnecessarily. By verifying source data and output results, USI has helped insureds reduce premium costs by 5% to 20%.
• Running CAT models to impact premium. USI modeled a client’s property location schedule for earthquake and determined that five locations were driving 80% of the loss estimate. After requesting and receiving additional information about the earthquake design of these five buildings, we ran the model again. The additional building characteristics reduced the loss estimate and corresponding premium by 40%. After negotiating with carriers, the client’s earthquake premium was reduced by $80,000.
• Leveraging the market. Insureds can overpay for property insurance due to lack of market access and influence. Many brokers rely heavily on intermediaries to place property programs, whereas USI can secure improved terms, lower deductibles and improved pricing by accessing the market directly. USI can identify markets that have not been approached in previous marketing efforts and select the best access points (including London and Bermuda). By placing much of a program direct instead of accessing the market through intermediaries, USI recently reduced a client’s total program cost by $300,000 (18%).

Deductible Strategies

• Clarifying catastrophe deductible wording. Policy wording is crucial to determine the potential financial impact of high deductibles. It should not be assumed that all parties involved interpret wording the same way. Lack of clarity over how the deductible applies and poorly worded deductible language can create unexpected losses. To prevent this, insureds should confirm that only the values affected by the loss will be included in the deductible calculation, and that the percentage deductible applies to values declared to underwriters at the inception of the policy, not at the time of loss.
• Improving terms and conditions. An effective deductible analysis report provides insureds with the decision-making power to select the right deductible based on their loss history and risk appetite, which can then be incorporated into the terms and conditions. In the event of a catastrophe, commercial property owners often face extremely high deductibles. A stand-alone deductible buydown policy enables an insured to make up the difference between the lender’s requirements and the most cost-effective deductible.

Contact your USI representative or email pcinquiries@usi.com to learn more.