How the hard market affects these risk managers

The hardening market is even affecting risk management in post-secondary institutions.

One risk manager in Calgary said the challenges he is seeing are less about tightening of conditions in an insurance contract than underwriting unique exposures. The post-secondary environment has a pretty varied spread of exposures – from typical retail/dining operations to medical practices, daycare centres and sometimes even power generation.

“We’ve been able to broaden our liability wordings significantly enough over the years to alleviate the need to purchase each line individually,” said Curtis Desiatnyk, manager of risk and insurance with Mount Royal University. “The appetite for these types of manuscript wordings has certainly now shifted to where we are having to place lines individually.”

This has been especially challenging given that many of the exposures in the post-secondary environment (particularly at smaller schools) tend to be incidental, Desiatnyk said. “We end up facing the issue of not being able to meet minimum premium requirements.”

The reason behind these minimum premium amounts vary. The insurer may want to get enough premium to offset their overhead, or they may only want larger accounts because they feel they are better risk-managed, to name a couple of examples.

Desiatnyk was responding to questions this week from Canadian Underwriter about some of the basic terms and conditions he looks for in a policy, how easy these conditions are to find in a hard or soft market, and what are some alternate forms of risk transfer if conditions can’t be found.

Not being able to meet minimum premium requirements can often be alleviated by pooling policies among institutions, but the number of markets that have an appetite for the sector can further compound the challenge, Desiatnyk point out. “This is what we are seeing on the public D&O side of things where companies tend to make very little distinction between Canadian and American institutions from an appetite perspective.”

How can these issues be worked through? By giving yourself adequate time with the marketing process and ensuring underwriters have thorough detailed information, Desiatynk recommends.

“Insurers appetite parameters tend to tighten up dramatically in a hard market, so being able to distinguish your organization as best-in-class is extremely important to even get underwriters to look at your account if it’s not an industry segment their company is overly keen on,” Desiatynk said. “If you’re simply filling in applications, you may not always know what information is really driving their decisions or rates, so being able to have one on one conversations where you can [make] your case and answer their direct questions can make all the difference.”