Another casualty of the hardening market

As the market continues to harden, one brokerage in Ontario is seeing reduced appetite from carriers to write tenant insurance.

“There’s more demand for renters insurance and a lot of our markets don’t seem to want to write renters insurance,” Jeff Roy, president and CEO of Excalibur Insurance, said in an interview last week. “We’ve got companies that say, ‘We don’t want renters insurance’ or they only want a certain quote and then a lot of companies have put the rates so high.”

For example, an insurer may price tenant insurance with a minimum premium of $300 or $400, but “you can insure a house that’s $400,000 for $600,” said Roy, who is based in Clinton, Ont. Others may not offer a monthly payment option. Or they may have blended policies where home and auto coverages are on the same policy, “but they don’t seem to want to blend a renters policy and auto together in one policy and we think that would be awesome.”

Roy spoke with Canadian Underwriter about some of the challenges in cross-selling and what brokerages can do, such as offering incentive programs and starting with a renters’ policy as a stepping stone in building a lifelong relationship with a client.

“Having multiple policies obviously has a longer retention, which is good for the insurer and good for the broker,” Roy said. “We want to make sure it’s not just getting people in the door, but it’s getting them and building a lifelong relationship and maintaining them. That’s winning.”

Access to markets and rates are part of the challenge in finding tenant insurance for clients, but sometimes so is the needless complexity of the offering. Roy said some companies want 30 or 40 questions answered to write a renter’s policy, while other direct writers can write a tenant policy with four of five questions.

“The companies need to make some of this underwriting a lot easier, reduce the number of questions and use a bit more technology behind the scenes to help the rating part of it, to make it a lot easier and more seamless.”

Roy estimates that approximately 30% of leads coming into his brokerage are from people who don’t own a house.

“It’s important for us because you want to get the renters and you want them to build the experience and history so when they buy their house, they’ll get a claims-free discount,” he said. “They have history, they’ll get better terms on the policy by having that policy in place and obviously they are protecting themselves at that point.

“It’s really important to get that first policy in place.”