Farella's Insurance Recovery Group lawyers regularly collaborate with and learn from different players and functions within the insurance industry. To provide more value to our readers, we have reached out to a series of insurance brokers to create the Insurance Broker Series Q&A.
Our latest installment is with Larry Reback, Managing Principal, Leader of Policy Response Unit with Integro Insurance Brokers.
How long have you been in the insurance industry?
17 years. 26 years if you count my time as an insurance-defense lawyer.
How did you get into the insurance industry?
My first job out of law school happened to be with a large insurance defense firm. One of my partners at the firm was a former general counsel of an insurance company and knew I was looking for \opportunities outside of law. He introduced me to contacts in the brokerage industry and I was lucky enough to be hired as a claims consultant.
What trends are you seeing in the insurance industry or markets?
Insurance companies are striving for ways to differentiate themselves. We are seeing more focus on risk mitigation services, as well as innovative program structures and new products. On the flip side, we are seeing some hardening in pricing on certain lines and less flexibility to revise policy terms and conditions.
What advice are you giving to clients looking to purchase or repurchase insurance?
With the recent spate of natural disasters, as well as an increase in severity claims across many lines, it is more important than ever to understand your rights and responsibilities under the various insurance programs. Attention to policy terms at renewal to ensure proper response in a claim situation, while always a good idea, is getting more important. We also are spending more time on alternative risk finance strategies.
What questions do you wish your clients would ask you?
What can our Risk Management department do now to maximize insurance recovery later? How can we manage costs within our retained limit?
As a claims professional, I may be biased, but at the end of the day a policy is only as good as how well it responds to a loss. Thus, a focus on policy terms that make sense to the insured, better communication with the markets and litigation management procedures will have a dramatic effect on lowering the cost of risk.
How are insurance products in today's markets changing?
There is an attempt to simplify policy terms (e.g. shorter "follow form" excess policies) and expand services beyond pure risk transfer. The markets also seem to be more willing to discuss alternative structures, such as integrated risk programs, and look for solutions to risks that have not traditionally been insured.
What is the key issue you are facing as it relates to insurance products / policies today?
As a claims professional, I'm seeing less favorable coverage interpretation and reduced willingness to help policyholders resolve claims. Many claim/coverage disputes involve grey areas of the policy and are subject to more than one reasonable interpretation. Thus, while I've not always agreed with a carrier's position, I usually could understand the merits of the position. Recently, I've seen coverage positions that have been much harder to understand. It seems that there has been a greater focus by some insurers to limit recovery than I've seen in the past.
What risks should clients be using insurance products to mitigate that they may not know they can use insurance for?
Whether to buy insurance or not depends on a host of factors. Thus, even if products are available, they may not be the best (or only) solution to a particular problem. Having said that, there have been more options in Wage and Hour, Product Recall, and Regulatory E&O insurance that may be worth at least exploring. Cyber policies continue to evolve and should be continually reviewed. Clients are also focusing more on their organization's reputational exposure. While the market for true risk transfer of reputation damage is limited, there are strategies being developed to deal with this exposure.
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