Just as the insurance industry is going through a time of change, with major mergers and acquisitions as well as disruption via infamous names like Lemonade, the world of real estate is likewise undergoing a revamp in how business is done.
“In the last three or four years, the real estate industry has been going through a transition,” said Peter Taffae, managing director at Executive Perils. “Historically, one person would sell you a house, then that person would say, ‘go over here to get a title, go over here to get escrow, go over here to get a mortgage, and go over here to get an inspection.’”
Now, the industry is segueing into becoming more diversified and moving away from each company only having one expertise or product, explained Taffae. Rather than outsourcing titles to a third party, for instance, companies are bringing this and many other services under one roof to improve the customer experience.
“To buy a house, you don’t really want to have to go to five different places to complete the transaction, and, quite frankly, the companies are realizing that those are revenue streams that they’re not doing, so it’s a win-win: they want to maximize the revenue potential and they want to bring service and value,” said Taffae.
With developments in the real estate industry, an evolution in insurance products was bound to follow. Whereas before, a property manager, developer, and mortgage broker might work independently of one another, and thus need individual E&O policies, they might all be operating under one company today.
“It dawned on me: why not do a package? Why not put it all with one insurance company?” said Taffae.
Through a partnership with Arch Insurance, Executive Perils now offers RE360, the first policy designed specifically and solely for the real estate industry. Companies can pick what they need from a diverse list of offerings, from employment practices liability and D&O to real estate sales E&O and cyber insurance, with one underwriter, claims adjuster and premium for each program.
“It’s really what the insureds like, too. It’s a lot more efficient and a lot easier,” said Taffae. “The agents like it because it’s something different and it’s comprehensive and it brings value, and you don’t have to worry about gaps – that’s really, to me, one of the big highlights.”
Taffae anticipates writing $15 million in premium for RE360, demonstrating the value that this type of all-in-one program has for insurance professionals.
Being ahead of the curve clearly has its advantages. Not being left behind is an added benefit.
“If I was an underwriter just doing property managers or just doing real estate sales, you know what, I think the writing’s on the wall,” Taffae told Insurance Business. “That product is going extinct, it’s an endangered product because their customer is changing and they’re not changing with their customer.”
