As capacity constraints and other pressures create a tough market, Aon’s Christy Corbett shares her thoughts on overcoming challenges in the hospitality sector.
Come see the stars! As part of our ongoing coverage of the best brokers in the business insurance space, Risk and insurance®, sponsored by Philadelphia Insuranceis expanding its coverage of Rising Stars – brokers who represent the next generation of insurance brokerage talent.
Find these extended profiles on Risk and insurance website and on your social media feeds now and throughout 2023.
Here’s our conversation with Aon Broker and 2022 Hospitality Power Broker and Rising Star.
Risk and insurance: How did you get into insurance and specifically decide to become a broker?
Christy Corbett: I had recently finished my university degree in business and had yet to decide on a career path.
I was working in real estate, as I had been throughout my degree, when a friend approached me about applying for a position at Aon. It was an entry-level position that collected information from various lines of business.
With this development and my real estate background, I quickly realized that real estate was the line of business I wanted to pursue. While I initially thought my analytical mindset and personality type were better suited to writing, once I moved inside the real estate brokerage team, I realized that I thrive in negotiations.
However, it took a lot to get out of his comfort zone.
R&IWhat are some trends you see in the gaming/hospitality industry?
CC: Current trends in the gaming/hospitality industry are largely driven by capacity constraints caused by ongoing losses from natural disasters.
There has certainly been a trend toward increasing AOP deductibles, keeping customers self-insured and reducing risk limits. In many cases, the total program scope purchased is also affected.
While historically customers have had the ability to be conservative and purchase more CAT limits, the CAT capacity simply isn’t there anymore. CAT modeling and peer benchmarking can be a useful tool for determining the required thresholds for individual clients.
Asset prices continue to be a major topic of discussion in 2023. There is a lot of focus on inflation trends, valuations and real business disruption vulnerabilities. If insurers do not feel that the values are adequate, there will be increased pressure for value limitation clauses such as a margin clause or an event limit of liability.
R&IWhat are the global challenges in the market now and how can you help your customers overcome these challenges?
CC: Shrinking capacity is the biggest challenge we are facing in the real estate space today.
As demand for current natural disaster reinsurance exceeds supply, insurers face drastic changes in reinsurance deals worldwide. As such, it has caused insurers to take a bigger hold and get hit with higher premiums. This ultimately affects how they deploy their net line and capacity on the direct side.
During the first quarter of 2023, we saw many programs have large holes, mainly due to the removal or reduction of carriers in CAT exposed layers. With the supply shortage going straight down the sidelines, these holes have become more difficult to place. These supply and demand challenges are difficult to overcome in the current market environment.
For me, it’s about getting as many options as possible for the customer. The more options a customer has on the table, the easier it is to understand the full picture of available market solutions.
Time changes have also become increasingly challenging. Many insurers are looking to impose more restrictive terms on their policy terms to limit their exposure to losses.
R&IHow do you navigate difficult customer situations in difficult market conditions?
CC: Property rates have been rising for consecutive years, and while rate cuts are likely to be secured in 2022, inflation and a challenging insurance market are likely to accelerate again in 2023.
Customer frustration is at an all-time high.
Early and frequent communication is essential to manage expectations. We always encourage customers to visit the island. [Bermuda] And to meet face to face with our markets, many of them are decision makers.
Although it’s a tough market, it’s clear that relationships are more important than ever. No one can tell your story better than you.
R&IWhat advice do you have for young brokers entering the field?
CC: For anyone looking for a career as a broker, I have two key pieces of advice: First, don’t be afraid to step out of your comfort zone. Second, develop and grow as many relationships as possible. I think a good start to developing relationships is finding a mentor in the industry. &