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Underwriting agencies in the construction and engineering market are seeing an uptick in business as insurers reduce their interest in the space, an expert has said.
Michael Holbrook, senior engineering underwriter for South Australia and Northern Territory at SURA, said that the move to underwriting agencies represents a key trend in the market.
“One of the trends we’ve witnessed in recent times is a reduction in interest from corporate insurers along with a corresponding reduction in their underwriting teams,” Holbrook told Insurance Business. “We think we’ll continue to see business shift to the agency space where specialist skills and a focus on service is driving growth.”
Holbrook said that an abundance of capacity is still available in the construction market, which means it is still “very price driven” – and that forces underwriters to be “better than price alone.” This, in turn, leads to differentiation in the market, with Holbrook highlighting SURA’s practice of ensuring all managers and senior underwriters have a bachelor degree in a form of engineering to boost technical understanding.
In addition, he noted that in the machinery and electronic engineering product area in particular, there has been a move away from “old school” underwriting based on specified machines listed on schedule which helps brokers and their clients.
“In days gone past this proved to be an issue for brokers, when items may have been missed off specified lists provided,” Holbrook continued. “The SURA Equipment breakdown policy, for example, is a blanket cover for all fixed plant and equipment at the locations listed, with a sum insured up to the full property and/or fixed contents value.”
