0:23

Hello everyone . Today , scott and I are joined

0:25

by a couple of CRC's property brokers

0:27

. We've got David Christopher , a Senior

0:30

Vice President and Property Broker with CRC

0:32

Group's Dallas office , as well

0:34

as inside broker Jonas Williams

0:36

from our Birmingham Alabama office

0:38

. This is the Placing you First podcast

0:41

from CRC Group .

0:42

This podcast features news and insights

0:44

from a vast knowledge base of over 5,100

0:47

associates .

0:48

Who write more than $35 billion in premium

0:50

annually . Plus , we give you the latest information

0:53

on what's happening at CRC . This , this

0:55

, this is the Placing you First

0:58

podcast , and now the hosts

1:00

of the podcast , amanda Knight and

1:02

Scott Gordon . Welcome to the podcast

1:04

. It's good to have you both with us today .

1:06

Thanks for having us . Thank you for having us .

1:08

Okay , well , let's jump into this . We

1:10

recently put out the written companion

1:13

ENS property state of the market

1:15

piece , and it seems as though 2024

1:18

is looking a little brighter than

1:20

23 when it comes to property

1:22

renewals . How does the current market

1:24

compare to 2023

1:26

?

1:27

What we've seen so far in 2024 is

1:30

the market's kind of stabilized

1:32

compared to what we saw in 2023

1:35

. There is more capacity

1:37

coming out domestically and

1:40

out of London and Bermuda

1:42

. We're seeing rates stabilized

1:45

there , but reinsurers are still pushing for rate increases

1:47

overall . So I don't think we're seeing rates stabilize there but reinsurers are still pushing

1:49

for rate increases overall . So I don't think we're going to see

1:51

a drop anytime soon . There's

1:54

still a fair amount of demand out there , but

1:56

not quite enough . Supply is

1:59

what we saw five , six , seven

2:01

years ago , where you saw large

2:03

chunks of capacity coming out of single

2:06

carriers , where you saw large chunks of capacity

2:08

coming out of single carriers . We're seeing more quota share and layered

2:10

business , especially on tougher accounts

2:12

, and I don't think that's going to change

2:14

anytime soon .

2:16

I'll add to that . So the

2:18

majority of the carriers that we're trading with

2:20

, we're seeing an increased

2:22

appetite . If

2:28

you look at their combined ratios the carriers combined ratios they've significantly improved

2:30

, which for the most part means that senior management

2:32

is saying we want more and

2:35

we need to get more as fast as we can while

2:38

our profitability is up and rates

2:40

are still up . So there's

2:42

an increase in appetite . For sure , there's

2:45

certainly a stabilizing effect

2:47

. With reinsurance renewals this

2:49

past year . Versus last

2:51

year there's not quite as much of a crunch in

2:53

Florida as there was last year

2:56

. And then we've also got some new market

2:58

capacity that's come in . That's allowed

3:00

us to navigate

3:02

some of the tighter placements where we were really

3:05

tight down to the last market . Now

3:07

we have markets that we can maneuver

3:10

around and be more creative

3:12

with . In addition to that

3:14

, we have in-house products that

3:17

I think are helping us every day , and

3:19

our in-house products are getting more

3:21

and more robust . So

3:27

I think all of those factors , combined with

3:29

what Jonah said , that's where the market is right now Still underwriting

3:32

discipline , but we've got more tools to work with and a little

3:34

more flexibility in the market .

3:36

So with insurers sort

3:38

of signaling a cautious readiness

3:41

to embrace a little more

3:43

risk , what sort

3:45

of factors are influencing sort

3:47

of the underwriting decision-making

3:49

process ?

3:51

I think quality of data is

3:53

still key for a lot of our

3:56

underwriters and our carrier partners . You

3:59

know , and valuations , they

4:02

all kind of know what you know

4:04

frame habitational would

4:06

take to rebuild after a loss

4:09

and they have these metrics and

4:12

so they're comparing everybody's submissions to

4:14

what they have internally and

4:16

seeing if it adds up and if it doesn't , then

4:19

they're seeing more than enough opportunities

4:21

so they can happily

4:23

pass if valuations are not

4:26

adequate enough or

4:28

if we're missing , you know , key information

4:31

that would help them underwrite the risk

4:33

.

4:34

I'll jump in . I think the corporate

4:37

the average combined ratio

4:39

of the different underwriting companies is

4:41

driving a lot at senior levels

4:43

, a

4:49

lot at senior levels . And then there's an enhanced

4:51

demand for underwriting results at rate levels where these CUOs

4:53

feel like the profitability is there

4:55

to be had . So I think that's certainly

4:58

something that

5:00

you see . You see , companies are

5:02

a lot more aggressive . Certain companies with the

5:05

lower combined ratios are a lot more aggressive . Certain companies with the lower combined

5:07

ratios are a lot more competitive and

5:09

a lot more aggressive right now . If

5:11

you go to the London market , the stamp capacity

5:14

is up among syndicates across

5:16

the board . So the majority of the London

5:18

market is looking to grab market share

5:21

. There's still a fair

5:23

amount of discipline , like we talked about earlier

5:25

, but I think all of those things

5:27

are driving demand right now .

5:29

Well , to add to that , last year

5:31

, what we saw is carriers

5:33

either had enough capacity or

5:36

they didn't , and so the ones that

5:38

had , they were opportunistic

5:40

, and the ones that didn't have

5:42

enough , they kind of had to sit on the sidelines

5:44

and watch . You know , some of their

5:46

counterparts write risks

5:48

at high rates and capitalize on

5:51

the hard market . You know , in 2024

5:54

, I think we're seeing the ones that were opportunistic

5:56

or trying to hold on to what they have , and

5:59

the guys that you know were more

6:01

cautious last year they're looking to

6:03

grow this year . So there is some

6:05

wiggle room and placements and

6:08

trying to get some new capacity on accounts

6:10

that maybe wasn't available last year .

6:13

So , in the face of rising property values

6:15

and construction costs , how critical

6:17

are accurate property valuations for insurers

6:20

and reinsurers ? What sort of tools

6:22

and strategies can brokers employ

6:24

to ensure precise valuations

6:27

and mitigate these unexpected losses

6:29

?

6:30

As far as the property valuations

6:32

go , all of our carrier partners

6:35

, they know what

6:37

it costs to rebuild a

6:39

property after it's been damaged

6:41

, so they have this data on the back end

6:43

. So if insureds

6:46

are not adequately valuing

6:48

their property , you know they won't get

6:50

a look sometimes from these carriers

6:53

because they know what

6:55

it costs to replace . And so

6:57

what CRC has

6:59

is we have tools that can help us

7:01

guide our retail

7:03

agents and how to value a property

7:06

. And we can run

7:08

it on the back end with our CRC

7:10

SOV fixer , which takes

7:12

any spreadsheet you know , regardless

7:14

of the quality of data , and can help fill

7:16

in third party information that

7:19

it sources out from other

7:21

places . But then too it gives

7:23

us a low , a medium and a high

7:25

range of expected

7:28

valuations and we can share that with

7:30

our retail agents and can

7:32

help them have that conversation

7:34

with their insureds on how to properly value

7:36

their property . Are

7:38

CAT models

7:41

that

7:44

you know , take the insurance information

7:47

and run that through you

7:56

know the AIR and the RMS model to kind of see where the insurance exposure is based on values

7:58

that they've provided , and so that can be used as a tool

8:00

again for our retail agents

8:03

to have that conversation and help them determine

8:05

, you know , what is their actual exposure

8:07

to wind events , convective

8:10

storm , to flood

8:12

, to fire , and help them

8:14

determine how much coverage

8:16

they need to buy for those certain perils

8:18

.

8:19

David , before you jump in , I know

8:21

you probably can also talk with us about how

8:24

important property valuations

8:26

are , but I know we talked about this last

8:28

year right , especially after

8:30

, you know , hurricane Ian struck in 2023

8:33

. Itv valuation really

8:35

seemed to be the theme of the year

8:37

. So going

8:39

into 2024 , we're now , you know , wrapping

8:41

up Q1 . Do

8:44

the insurance understand that ? I

8:46

know that some folks were having a hard

8:48

time with valuation and how much

8:50

they were really needed to increase

8:52

in 2023 . Has that

8:54

shock sort of worn off at this point ?

8:56

I think the communication has been

8:59

consistent over a period

9:01

of 18 months to two years

9:03

. We need to address valuation

9:05

and that persistence

9:08

of the underwriting market has

9:12

led to an awareness that

9:14

may or may not have been there in the past

9:16

. And you know , obviously

9:18

the best and ultimate

9:21

you know test for valuation

9:23

is to get a true replacement cost

9:25

appraisal . That's

9:27

not done overnight . There's

9:30

a lot of planning and there's cost involved , and

9:32

then the tools that Jonas mentions

9:35

that we have are certainly there

9:37

as well . But I think ongoing

9:39

communication awareness has increased

9:41

. So all of those things are playing into it

9:43

. I don't think it's being lost . The

9:46

awareness is a little bit more

9:48

prevalent now than it

9:50

was .

9:51

So in this marketplace , where multiple carriers

9:53

often have to be pulled onto a risk , what

9:56

options exist for tailoring those solutions

9:58

? I know we've talked about layering , we've talked about quota share

10:01

, but you guys have also mentioned

10:03

we have some proprietary products , some

10:06

facilities that help with that . Do

10:08

you guys use those ? Are they helpful ?

10:10

Yes , I use them all

10:12

the time , especially when we have some of

10:14

our larger placements , our

10:17

market carriers . They use the AIR

10:19

or the RMS models or sometimes

10:21

a combination of the two . It kind

10:23

of helps us understand

10:26

what they're seeing on their end . What can we

10:28

expect from those carriers when

10:30

they are running their models themselves ? Now

10:32

, of course , they're running it against

10:34

their portfolio and seeing

10:36

how that compares , but it

10:38

does give us an idea of what

10:41

is their probable max loss

10:43

for a certain peril , or

10:45

you know what is the worst

10:47

case event that

10:49

an insurer could have . You know which locations

10:52

are going to get hit the hardest . So

10:54

we can use those tools and

10:57

use our relationships with our market

10:59

carriers to have better conversations

11:02

and more directed

11:04

conversations around how do we want

11:07

to place this specific risk . We're

11:09

very transactional and so we're often

11:11

using the same underwriters for

11:14

different risks , because they

11:16

know what each carrier wants to do

11:18

in a certain layer or in a placement

11:20

and they're familiar with

11:22

the terms that their

11:25

counterparts are putting out there . So

11:27

we can use that relationship

11:30

to leverage the opportunity to

11:32

write other accounts with those same carriers

11:34

. And so those are

11:36

just some of the tools that we

11:39

have that can be used to place

11:41

accounts . But we also have our

11:43

in-house insurer risk spectrum

11:46

facility , which is a quota share

11:48

or a me too facility , and

11:50

so they follow behind . You know

11:52

several of our carrier partners that they have agreements

11:55

with and can help fill out capacity

11:57

, and that can be really

11:59

useful . We're using them

12:01

all the time to place tough deals

12:04

or deals where , you

12:06

know , not every market has the same

12:08

price in a layer and

12:11

they follow maybe one of the cheaper

12:13

markets in the layer and so it can help fill

12:16

out that capacity at better

12:18

pricing than we would be able to get

12:20

otherwise .

12:21

And if I'm not mistaken , we also have our

12:23

insurance builders risk facility that rolled out in

12:25

January . Have y'all had any

12:27

experience with that yet ?

12:29

I would say the insurer's

12:31

property tools have been very

12:34

valuable to us . You

12:36

know , we can quote wind deductible

12:38

buybacks from our desk . We

12:41

have enormous flexibility with

12:43

an in-house underwriting team that's very

12:45

senior . They're well

12:47

equipped to handle and manage

12:50

the different placements that we're involved

12:52

in , which is refreshing A lot of

12:54

times . You know , you don't always have

12:56

the luxury of working with senior underwriters , but

12:58

the in-house team is certainly

13:00

excellent in terms of just

13:02

quality of underwriting . You

13:05

know , I feel like it gives us an option

13:07

on just about every placement to

13:10

pick out a spot where we can

13:12

apply some pressure to the existing

13:14

pressure you know the existing placement

13:17

, excuse me and create an

13:19

enhancement . Or , if it's an

13:21

account that we don't currently write

13:23

, we look at it and we go , oh , we can put

13:26

insure risk in this spot or that

13:28

spot and , you

13:30

know , create some restructuring that might

13:32

bring a client some savings

13:34

. So we're looking at using

13:37

those tools to be more creative every day .

13:40

Whether it's placing business or working through a claim

13:42

. You know , at CRC Group we pride ourselves

13:44

on being specialists that can help get the job

13:46

done for our retail partners . How

13:49

can partnering with a CRC Group producer

13:51

help agents with property placements

13:53

?

13:54

I think you know we try to be consultative

13:57

. It's not like we bring valuation

13:59

to the table and say these are the values

14:02

that you have to use for renewal

14:04

. Our team , we talk about

14:06

it all the time . We're trying to engage

14:09

a customer with information , to bring a

14:11

value added and a knowledge

14:13

and awareness , but we're a consultant

14:16

. We're providing them with feedback . So

14:19

I think most of the brokers within

14:21

the company are very collaborative

14:23

and consultant with the clients . I

14:25

find that when we can create partnerships

14:27

that go both

14:29

directions we listen

14:31

to the customer , the customer listens to us , we collaborate

14:34

. That collaboration is very powerful

14:36

. Many times we even

14:39

bring the insured into the middle of that discussion

14:41

. So those are ways that we

14:43

can create a better

14:45

outcome , and part of my

14:47

background is spent 11

14:49

years on the retail side . So bringing

14:52

in the retail client , bringing

14:54

in the buyer , the CFO CEO

14:56

, into the discussion and really

14:58

hearing from them is

15:00

meaningful to the process , and

15:03

I feel like we do and I

15:05

think that's a benefit . You know we would

15:07

try to do that wherever possible .

15:09

Well , and to add to that , you

15:11

know , one of the things that we really focus on on

15:14

our team in Birmingham is to be

15:16

service oriented to

15:18

our retail customers . You

15:20

know , by and large most brokerages

15:23

have access to the same

15:25

markets . You know , of course we have

15:27

our insurer risk products , but

15:29

by and large we all have access to the same

15:31

same markets . So the

15:33

one thing that we can control is service . And

15:36

so if a retail agent

15:38

has an existing

15:40

relationship with a CRC broker

15:42

, you know David and I are specialists

15:45

in property , so that's all we focus

15:47

on is property . But if

15:49

somebody comes to me asking about casualty

15:51

or trucking or professional

15:54

lines , they have a contact person

15:56

within CRC and we can kind of help direct

15:59

them to the right service

16:01

or product that CRC provides

16:03

. And CRC is looking to

16:06

grow those all the time we're

16:09

coming out with new or we're purchasing

16:11

, I guess , more and more companies to

16:13

kind of help add value

16:15

to what CRC can offer our

16:17

customers so that we

16:19

can be more of a one-stop shop for the retail

16:21

agents .

16:22

Absolutely .

16:23

This was very informative . Thank you , guys

16:25

, for never having been on the podcast . You sound

16:28

like you've been on a million of them . You're both

16:30

very excellent and

16:32

before we go , can we do a little something

16:34

fun ? You guys mind .

16:36

Let's go .

16:40

These are all Amanda's questions and they're really

16:42

good . This time I took a little peek at

16:44

these , and this is something we like to call

16:46

rapid fire , and

16:50

it's just right off the top of your head , whatever comes

16:52

to your mind . Our first question which

16:54

famous person , dead or alive

16:57

, would you like fighting by your

16:59

side during the zombie

17:01

apocalypse ?

17:02

I wouldn't be much good in a zombie apocalypse

17:04

, but I think Achilles would

17:06

probably be a good option

17:09

right there .

17:09

There you go yeah .

17:13

You know , he'll be dragging me along , though . As long as you're alive

17:15

, that's what counts .

17:16

Yeah , yeah , that's what he's there for . That's it , david

17:18

, you don't have anyone .

17:20

Uh , let's go with Zeus .

17:21

Wow , See these are much better . I

17:24

was going to say Andre the giant , but

17:26

Andre the giant was

17:28

had a bad back . He couldn't really move

17:30

that well at his old age . So yeah , I know I would

17:32

have been a round one elimination . Question

17:35

number two If you

17:37

could appear on any game show

17:39

, which one would you choose ?

17:42

I'll go with Family Feud .

17:44

Good one . I hope your family is your family smart

17:46

Like , are we taking everyone

17:48

? Are you going to handpick your family members ?

17:50

I think I've

17:53

got enough family members to fill out a team .

17:55

You know I'm not picking everybody . I'll

17:58

go with Jeopardy .

17:59

Yes , hey see , I'm

18:02

going with zero strategy

18:04

and I'm going with the price is right

18:06

because I

18:08

know the price of household goods . I'm the grocery

18:10

shopper for my house . I can

18:13

totally I could kill it on the prices , right , 100%

18:15

. What about you , scott ?

18:17

I'd have to go with the old Nickelodeon program

18:19

Legends of the Hidden Temple where

18:21

they get to run through like Indiana Jones

18:24

, through a collapsing temple and collect

18:26

prizes . I would have loved

18:28

that as a kid .

18:29

I'm going to stick with property for 5,000

18:32

.

18:34

Well , okay , speaking

18:36

of property , since you guys are property

18:38

brokers , this seemed like a good question . If

18:41

your house caught on fire , what's

18:43

the first object you would run in and save

18:45

?

18:46

I'm probably getting my insurance

18:48

policy so I can file a claim .

18:52

Good answer , Jonas .

18:53

I would probably make sure I have the dog

18:56

.

18:56

There you go .

18:57

Because if the dog didn't make it out , I

18:59

would be put back in the house .

19:01

See , I would have included that in the family , so

19:03

I would have been like he's already out

19:05

of there . I got another bonus pick .

19:07

I think my insurance policy is in a fireproof box

19:10

inside a safe , so maybe it would

19:12

be fine . So I don't think I'd have to grab

19:14

that . Kids are already out .

19:16

Yeah .

19:19

I think I've got all their baby pictures and stuff stored on like a flash

19:21

drive or a disc or something . I guess I'd go for

19:23

that because that's irreplaceable right .

19:26

Yeah , my hard drive with the family photos would

19:28

be mine . Yeah , there

19:31

are no photo albums anymore , it's all on a

19:33

stick so yeah , the computer .

19:35

The computer would be one of the first ones

19:37

, along with the dog .

19:39

You got two arms , david dog , computer

19:42

.

19:42

Got it .

19:44

Well , listen , it has been a pleasure having you guys

19:46

with us today . Listeners , if

19:48

you have not yet dug

19:50

into the written companion piece titled less

19:53

turbulence ahead in the ens property

19:55

market , you can find it on

19:57

team crc's website at

19:59

wwwcrcgroupcom

20:02

. You can click on tools and intel or simply

20:04

search the title . Providing current

20:06

insights into the marketplace is just one more

20:09

way crc group is placing you

20:11

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