In a hardening market, early preparation and careful strategising are key ingredients for a successful renewal. Market conditions look set to become more challenging and this is where Miller’s alternative and innovative thinking comes to the fore.
As a broker independent of any distribution network, we have to earn the right to work on your business. This keeps us sharp and focussed on delivering much more than your current programme every time.
We approach each renewal as if building from new, taking all the possible options into consideration, and exploring each alternative structure the insurance market has to offer. The key to achieving optimal results is to invest this effort at the outset and long before placement begins. We commit to this front-end work as part of our DNA, going far beyond a simple analysis of the economics of increased deductibles and rating metrics. We search for other ways of doing things.
For larger clients we might explore the use of a captive solution. This route to efficient risk transfer is well tested and provides access to alternative sources of capital. Miller has the in-house analytical capabilities to perform initial feasibility exercises and the experience to advise on appropriate jurisdiction and reinsurance strategies. Our advice is truly objective as we are not conflicted by offering captive management services ourselves.
We may suggest alternative capital sources. The old insurance model of equity-capitalised risk carriers has been broken wide open through the introduction of new risk transfer instruments funded by alternative new investors. These may offer greater flexibility and lower costs than traditional capital markets.
The above often go hand-in-hand with parametric triggers. Traditional insurances function on an indemnity basis. Under that model (which can have tremendous advantages), actual financial losses – once adjusted – are reimbursed by the insurer. In contrast, parametric protection comprising a fixed claim payment is triggered by a specific, measurable event, such as windspeed threshold at a specified location during a storm.
Another possibility is involvement in a P&I-type mutual arrangement. Many P&I clubs now extend their membership to offshore facilities, and other mutuals such as Oil Insurance Limited may offer a cost-efficient alternative to conventional insurance, especially for liability risks.
The introduction of risk engineering, whether through Miller’s in-house resources, those of an insurer, or by engaging a third party are increasingly being utilised in the upstream sector. Engineering can have both the benefit of highlighting good operating practice to the underwriter panel and uncovering areas of improvement as part of a loss prevention programme.
All of these options allow us to provide new data and information, which may help underwriters to see the risk in a more positive light. At the very least, it is an effective tool to capture underwriters’ attention and secure meaningful capacity.
Whatever your business and the constraints or challenges that may be present, we approach it with urgency and proactivity in pursuit of the best possible outcome from the market.