Corporate buyers boost R&W insurance growth

Insurance Business Magazine | August 26, 2019

Transactional risk insurance limits placed by Marsh JLT Specialty in the US and Canada reached US$16.56 billion in 2018, a 53% increase from 2017. The number of transactions closed also jumped by 40% from 359 in 2017 to 504 in 2018. In its recently published Transactional Risk Insurance Report, Marsh attributes both increases to pricing reductions, larger transactions, and more corporate/strategic buyers. The North American representations and warranties (R&W) insurance market has seen meaningful pricing reductions for a number of years, making this an attractive insurance purchase and a good sell for insurance brokers. In 2018, primary layer rates declined 11% from 2017, following a 13% decrease from 2016. As more carriers enter the space, Marsh JLT Specialty expects pricing to continue to drop, although not at such a dramatic pace.

Spotlight

Builders risk is considered “non-standardized” coverage. This means that, unlike most other types of insurance, the terms and coverage afforded can vary considerably from policy to policy. For this reason, a builders risk policy should be closely examined in order to determine the scope of coverage and to make sure the insurance obtained actually meets your company’s needs. Indeed, for especially significant projects, it may be prudent to hire an attorney to review that policy so that there are no surprises in the event of a loss. While it is recommended that the entire builder's risk policy be reviewed, what follows below is a checklist of the provisions of special importance, which should be closely examined.

Spotlight

Builders risk is considered “non-standardized” coverage. This means that, unlike most other types of insurance, the terms and coverage afforded can vary considerably from policy to policy. For this reason, a builders risk policy should be closely examined in order to determine the scope of coverage and to make sure the insurance obtained actually meets your company’s needs. Indeed, for especially significant projects, it may be prudent to hire an attorney to review that policy so that there are no surprises in the event of a loss. While it is recommended that the entire builder's risk policy be reviewed, what follows below is a checklist of the provisions of special importance, which should be closely examined.

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