After the catastrophic (CAT) weather events and natural disasters of recent years, awareness around risk management and the need for comprehensive coverage is at an all-time high. Although individuals and families are the ones to grab the public attention in the wake of a catastrophic event, large organizations (who often underpin the economies of the communities impacted) also face devastating impacts. As awareness around safeguarding against CAT events increases amongst most large companies, brokers have a good opportunity to service the segment and grow their books of business.
“A lot of brokers are familiar with creating business continuity plans that cover for events at the client’s location, but there is a big difference with catastrophic events that impact a large area and a number of surrounding businesses,” explains Mark Wyatt, Regional Director, Prairies, Global Specialty Lines at RSA Canada. “Explaining the differences and then reviewing and challenging the client’s contingencies are really important.”
Wyatt has noticed more brokers recognizing the importance of identifying a client’s key suppliers and customers, which can help mitigate business interruption issues in a CAT event. It may not necessarily be the client’s location that is affected; it could be the place of work for the business partners they deal with on a daily basis. “Brokers should also help their clients understand that things take longer after CAT events compared with a regular claim event,” Wyatt says. “There are usually many parties involved and infrastructure maybe damaged, so reviewing your business interruption limit and period of indemnity is important when considering a CAT event.”
Brokers who can offer true value to large commercial clients have the potential to differentiate themselves from the crowd and solidify themselves in an advisory role, not just an access point to the insurance market. “That approach can help prevent insurance from just being an item on the balance sheet and actually drive more risk management practices, which enables the broker to show the value they bring,” says Wyatt. “Also, if the broker identifies key suppliers and customers of the client, those companies are prospective new clients for that broker. Those introductions could be very valuable and they give the broker a better understanding of the relationships between those companies, which allows them to do a better job in addition to growing their business.”
For a broker who wants to increase their value offering to large clients, Wyatt recommends focusing in on a specific segment or territory. “That enables them to build a depth of knowledge that is relevant to those clients, which helps drive growth,” Wyatt says. “Be proactive and don’t just tag the CAT event conversation onto a renewal meeting. Have a specific meeting about these topics and the resources and risk control services that you can offer.”
