Will 2013 be the year the market turns?
David J. Bresnahan: In 2012 we experienced a gradually firming market. In my opinion, 2013 will resemble 2012 in that it won’t be a hard market across the board, with massive rate increases or capacity restrictions, but we will continue to see positive rating in the property-casualty arena.
What impact will Superstorm Sandy have on pricing and cat planning?
Kenny: Sandy will definitely have an impact on property rates. The overall impact the storm had on individuals and business in a heavily populated and business-centric part of the country exposed the weaknesses of many business continuity plans. Business owners and risk managers will review how they can improve their state of preparedness in the future. Many lessons were learned and more emphasis will be placed on team member communication and proactive customer contact management.
What role will independent agents and brokers play in the future?
Bresnahan: I see them as critically important as they have been historically. Whether it’s a surplus lines or retail agent, they’re the lifeblood of our business. They also are a great source for innovative ideas and opportunities for new products. Many of our products began when an agent or broker came to us with a problem or uncovered a loss or exposure that their customer was grappling with that allows us to think about a way to solve the problem and bring new products and services to the market. For example, a broker’s hospital client explained that the emphasis on electronic data medical records meant they were spending hundreds of thousands of dollars on big multiyear IT projects to update their systems. However, the hospitals had little to no bargaining power with the IT vendors performing the work, who could limit their liability to a below-reasonable amount and exclude consequential damages. So if the vendor was negligent, the hospital could only recover a fraction of the true exposure. After hearing this, we came up with a product called Parity, which is project-specific excess IT E&O liability coverage, designed to fill that gap where the vendor’s coverage ends. This coverage was introduced this year and came right out of a need that our clients were seeing.