WIN Magazine - Summer 2014 - (Page 19)

FEATURE ARTAND SCIENCE OF MANAGING CASUALTY THE F RISKS INANCIAL RESULTS FOR 2013 showed the underwriting year was a pretty good one for the Property and Casualty insurance industry. While there is some apprehension that loss reserves are not as redundant as they have been in the past, overall there is a sense of optimism about the prospects for a profitable 2014 and beyond. Of course, with all of these positive numbers, the ingredients are there for the beginning of another competitive market...oh, great! Future success in our business will be dictated to a large degree by embracing next generation technology as well as educating agents and underwriters on the nuances of underwriting and pricing risks to generate a bottom-line profit. Since its inception in 1987, AAMGA University has been in leader in developing and delivering quality education programs for Association members. Not only do these programs discuss what is covered by the various coverage forms but how to apply sound insurance judgment in the decision making process. Using information from electronic resources and a healthy dose of underwriting common sense can help insurers and agents find the story and deliver a product that will meet the needs of the insured. For casualty E&S risks, there are three categories or industry groups that comprise a good portion of what we see on a daily basis; habitational, restaurants/ bars, and contractors. Different factors drive these classes to surplus lines but a consistent theme is that the loss experience has deteriorated due to low rates, higher than expected losses, or a combination thereof. Managing these books of business is not easy given the winds of change that constantly batter our business but it can be done. In regards to these classes, here are some tools and techniques used by company underwriters in the evaluation process. It is crucial for agents to understand the reasoning behind this process as well to assure a prompt decision. BY CHRIS BEHYMER, CPCU, ASLI, CIW apartment complex, a high-rise urban hotel, and beachfront condos and patio homes. While on the outside these may look like fairly innocuous exposures, there are some challenges associated with these classifications: * Student, subsidized, and senior housing risks are not inherently bad. However, without the proper safeguards and/or pricing considerations, losses can develop far faster than the premium can be earned. Too often these somewhat specialty accounts get misclassified as garden apartments so inspections should be considered for all habitational risks. * Swimming pools, spas, volleyball courts, and other amenities can attract people to an apartment or hotel but they can also cause some pretty significant liability claims. Some of these property attractions, most notably pools, are very good at creating slip and fall claims and the cost to defend  and indemnify these HOME SWEET HOME Habitational risks come in all shapes, sizes and flavors. They include the sprawling suburban W I N | S u m m e r 2 0 14 | 19

Table of Contents for the Digital Edition of WIN Magazine - Summer 2014

Cover Story: High Risks on the High Seas
The Rising Importance of Property Catastrophe Risk in the “New Normal” of the Nonadmitted Market
Claims Leakage: Plugging the Hole with Predictive Modeling
Managing Casualty Risks
Understanding the Data Viability and Uses for Underwriting Commercial Auto
2014 AAMGA Wholesale Insurance White Paper Winner: Pandemic Insurance in the Excess and Surplus Lines Insurance Industry
2014 AAMGA Wholesale Insurance White Paper Winner: Catastrophe Bonds: Looking Forward
Organizing Emerging Risks: AAMGA Formalizes a Collaborative Approach
In the WIN-ner’s Circle
Index to Advertisers

WIN Magazine - Summer 2014

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