Traditional Risks Require Specialist Approach
The recent upheaval in the commercial property market has thrown an important industry question into sharp relief: how can it stay relevant and continue protecting customers in the face of such a challenging, complex risk landscape?
Nationwide’s Russ Johnston discusses how E&S can help meet insureds’ needs and why the industry should apply the specialization common in the E&S market to standard commercial to adapt to the unique risks emerging today.
The risk landscape continues to evolve and change with greater speed. Today it’s weather and economic trends, tomorrow it could be something else. Regulators in today’s world face a serious challenge: how to make sure that the carriers they regulate stay solvent while also providing for a fair and fully functioning market for consumers. With the risk landscape changing at such a rapid pace over the last 5-10 years, it is clearly driving more business into the E&S market. Some of that business will likely never leave the E&S market. No matter what, our agents, brokers and customers will have unique risks that require specialized solutions.
As a carrier, we are expanding our specialized approach to our standard commercial lines across product, underwriting and claims. Focusing on industry specialization will allow us to meet and serve the market in a very targeted way.
As we’ve learned, widespread catastrophic damage related to climate change is now the norm. It’s not a matter of if a severe weather event will happen–it’s a matter of when and where. This makes weather-related insurance needs more complex. E&S carriers understand and are designed to solve complex risks, so they’ve provided more capacity and more customers have moved in that direction.
Along with groups like the Insurance Institute for Business and Home Safety (IBHS), Nationwide has been an advocate for building codes that require construction companies to erect buildings that can withstand stronger weather events. It’s smart, sensible public policy that may allow standard personal and commercial lines carriers to return to these markets.
Depending on where you are in the distribution universe, specialization shows up differently. In small commercial, specialization is about understanding how your agents deliver solutions to customers and respond to them consistently and quickly. For our distribution partners who focus on middle market and specialty, it’s about having industry expertise throughout your journey: selecting the right products and coverages tailored to your specific needs, improving safety and prevention with loss control, or working with a claim professional who understands your industry.
In our E&S business, it’s about facing off with our wholesalers and addressing complex products liability needs all the way to delivering property solutions in some of the most challenging geographies from a hurricane perspective. While the approach to each line of business may be a little different, we are focused on customers who value protection and service for complex needs, and we’re delivering solutions that leverage our unique breadth.