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Spotlight on Property “Carve-Out’s”



Narrative: The placing objective for middle market property business should be to use the admitted domestic market, especially where a carrier can offer other lines of business and potentially provide a package policy. However, what happens with a large schedule of locations where a particular location, or locations, do not fit the admitted carrier’s appetite? This may be due to catastrophe exposure, or where a location(s) doesn’t fit a carrier’s underwriting appetite due to other risk characteristics. A possible solution could be to “carve out” the troublesome location(s), even if this is just for a particular peril, into a separate policy which may require a non-admitted market such as London. The plan is to keep the admitted carrier(s) on the entire account and provide a solution for the undesired exposure.


Examples of Fenchurch recent “Carve-out” success:

· A large schedule of Movie Theater’s which had locations in Guam and American Samoa, where we placed a Primary USD 5m Flood layer for these locations which enabled Travellers to write the account. The locations were in Flood Zone A, which was the issue.

· A mixed Real Estate schedule with high concentration of values in South Florida – the Domestic Carrier would only provide cover with a 5% Windstorm deductible. We provided a Wind Deductible Buy-down indication, with options from 5% to 3%, and 5% to 1%. · A South Florida Condominium Association purchased an All-Risks policy which excluded windstorm in the Domestic market and Fenchurch provided Parametric Windstorm cover with a specialist insurer. This solution provided a cost-effective solution to the Insured Windstorm exposure. · A National schedule of hotels, with locations in California where the domestic carrier had excluded wildfire at these locations. Fenchurch again were able to offer Parametric Wildfire cover with a specialist insurer.

Values size:- Ideally schedules over $ 100m, but this really depends on the opportunity and minimum premium level. Typically, the larger the schedule the more potential for “carve out” location opportunities.


Capacity: Primary limits up to USD 15m available at any one location.


Deductible: Minimum deductible USD 100,000 Each and every occurrence


When to send If the Admitted market is willing to provide a competitively priced programme, but has a few hurdles to overcome which can be resolved with a “carve out” to deal with their issues.


What to send As much information about the risk as possible. Including but not limited to:

  • The placing objective

  • Statement of values, including full structural details and protections

  • 5–10-year loss history

  • Placement basis and requirements

  • Current/Expiring Policy

  • Inspection reports and/or photos


Turnaround We can normally give a good idea if we can assist within a couple of working days.


Minimum premium: USD 100,000


Contact:- Richard Daniel Email: Richard.daniel@fenchurcbroking.com Phone: +44 204 526 5269


David Price

Phone: +44 204 534 3751

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