Many solution providers in the market today use addresses as input to determine the risk from multiple perils at a specific location.
The Risks of Hazard is going to try something new in January 2017, and we need your help, gentle reader.
This week I am in Atlanta hanging out at the annual NAPSLO convention. NAPSLO is the Nat’l Association of Professional Surplus Lines Offices – but if you don’t know that already, it probably still doesn’t make much sense. After all, what’s a “surplus line”? It sounds like an empty subway, or maybe the third line at a square dance.
Here is NAPSLO’s definition: surplus lines insurers fill the need for coverage in the marketplace by insuring those risks that are declined by the standard underwriting and pricing processes of admitted insurance carriers.
Further, there are three categories of such risks:
- Non-standard risks, which have unusual underwriting characteristics.
- Unique risks for which admitted carriers do not offer a filed policy form or rate.
- Capacity risks where an insured seeks a higher level of coverage than most insurers are willing to provide.
Just because it’s surplus, though, doesn’t mean it’s a small sector - $38B in annual written premium in the US is a significant portion of the market.
But why am I here?
Last month there was an article published by the Tampa Bay Times (see here) on flood insurance that really stood out for The Risks of Hazard. Not only was the author, John Romano, supporting the continued expansion of private (i.e. actuarial, i.e. market-driven) flood insurance – he was advocating for the logical next step, universal flood coverage.
Last week, Risks of Hazard explored a new way to view flood risk – Where, not When. The general concept was that floods are going to happen in the US every year, and underwriters should be more concerned with where the floods will cause damage, and not when the floods will come.