Product Family

High-quality information commands more positive experience and better outcomes

Gregg Shields


Vice President – Risk Consulting, Environmental, AXA XL

Much like resumes in an HR department, well-prepared insurance submissions, especially those for pollution insurance, are often given more visibility and urgent attention. A quality submission can result in a better experience, increased placement efficiency, better coverage certainty, fewer claims disputes, and overall better outcomes for customer, broker, and insurance carrier.

On the other hand, following the path of least resistance and providing a low-quality submission can result in poorer coverage options and problems during the claims handling/discovery process. Environmental insurance customers must recognize that the extent of historic and operational coverage available depends highly on the information provided to the underwriter. This helps better define known and potentially unknown risks and enhances coverage certainty in the event of a claim.

So how can a business and its broker make sure their pollution insurance submission rises to the top and is responded to in a timely manner? The answer lies in effective planning and collaboration between all stakeholders – clients, brokers, and underwriters.

There are a number of key factors to consider that can help get a pollution liability submission moved to the front of an underwriter’s desk and to the top of their submission pile. Why put in the extra effort to provide a quality submission? Insurance carriers that really want to win the business should be expected to incur the time & expense to immediately figure it all out and provide a quote – right?

Here’s a reality check: pollution underwriters only bind about 10% of what comes in the door. So, they need to carefully triage good quality submissions within their underwriting appetites. Further, not every insurer has an experienced in-house engineering staff to help sort out and analyze key documents, nor are many willing to incur outside engineering expenses when there is so much uncertainty in binding a policy.

Conversely, insurance brokers can be time-challenged, particularly when attempting to meet a myriad of prospective insured expectations. This can include moving quote delivery dates and expanding coverage options. The job is more difficult when clients don’t have a realistic understanding of the coverage available from the marketplace based on their risk profile and/or the information they are readily able to provide.

For site pollution insurance, brokers are also often faced with compiling and transferring large volumes of historical data and trying to address obvious data gaps with prospective insureds. Customers may provide unorganized data, have challenges with data transfer, or be unable to provide submission data in a comprehensive, once-and-done package.

Despite these challenges, it is widely recognized that poor quality submissions often create inefficiencies and frustrations right from the start. Initial submissions lacking relevant environmental reports and other risk information often evolve into piecemeal data flow that results in numerous Q&A exchanges between insureds, brokers, and multiple insurance markets. This can waste a lot of everyone’s time.

Fortunately, there are some basic submission attributes and best practices that insureds and brokers can routinely employ to elevate the value and profile of any pollution insurance submission. These practices will help improve the odds of a timely, efficient quote response from underwriters. Brokers will also benefit from obtaining more viable options and binding coverage that meets the timing and coverage needs of the customer.

Create a solid relationship
Obviously developing solid working relationships between brokers and specific underwriters is a critical first step. According to one regional broker, a fundamental hurdle is “understanding exactly what is required for a specific underwriter to review and what will be considered a quality submission.” Clients and brokers can establish trust by being honest and clear about what information is not readily available and what answers are not forthcoming.

Repeat placement success is also important in a broker-underwriter relationship because it helps reinforce the best process steps for obtaining a bindable, competitive quote from an insurer. However, whether it is a first submission with a particular underwriter or the 100th, being able to answer key questions posed about the prospective client’s business motives and needs is critical in prioritizing the submission.

Know your customer & do your homework
What is the story behind the prospective client’s coverage request and the need-behind-the-need? This is particularly important to understand for coverage like pollution liability insurance that has historically often been viewed as optional/discretionary. It is also important to clarify the timing/urgency that is driving quote delivery.

How solid is the opportunity with this customer? Is this prospective insured ready to buy now or just shopping? Has the prospective insured purchased a pollution product before, and if so, why? Brokers should understand and be able to explain to an underwriter why the client is interested in buying again or moving to a new carrier. If the client is serious, then it’s time to get serious about spending an appropriate amount of time creating a quality submission.

Regardless of whether the customer is a first-time buyer or veteran pollution policy holder, it is essential to understand what factors in their near-term business plans or longer-term risk management program are driving their interest in coverage.

Glynis Priester, National Environmental Practice Leader at USI views this as a critical element for preparing a successful and comprehensive package. According to Priester, “We always say lots of homework is needed before drafting the submission. We need to completely understand the following to set a strategy: 1) a client’s business drivers along with their goals and objectives for the solution – scope of coverage, term and pricing 2) their risk profile and how best to advocate for their solution and 3) relevant environmental and transaction documents that will identify issues and strategies to satisfy the market.”

Are customers demanding multiple quotes from different carriers? Are they focused on price, coverage, service, or all of the above? Lisa Pelurie, Assistant Vice President at Willis Towers Watson says understanding customer needs includes “obtaining clear instructions from the client and making sure we have all the information so we can design a program appropriately.” Understanding these factors is a critical first step in the underwriting opportunity assessment process, so it is important to be able to expand on these drivers.

Focus on good business
This is a sensitive topic. Many prospective environmental insurance buyers want to believe multiple carriers should be ready to fight over the opportunity to provide an insurance policy for them. However, customers with a long loss history, poor risk management program, or a high potential for future large losses are not tantalizing for carriers who are currently subject to ever-increasing competition and profitability challenges.

Can you make a case for why an insurance company should want the business or consider providing broad coverage? Can you make a case for why a new carrier should expect the account to be profitable particularly when their prior carrier is non-renewing? Can the business seeking coverage offer mitigating factors that make them a more attractive partnership?

These are questions often left unaddressed because insurance professionals would like to believe broker/underwriter problem solving and strong working relationships can overcome anything. However, the days of environmental carriers binding any risk crossing their desk just to achieve top-line revenue goals are long gone – just like the environmental insurance companies that did not exercise disciplined underwriting practices.

Educate clients
The amount of customer education needed can vary widely depending on their sophistication and whether they are a first-time pollution liability buyer. Brokers need to be prepared to discuss environmental exposures, how the policy responds to claims, and the coverage availability in the broader marketplace. Education may also be needed on the mechanics of the submission and underwriting process, evaluation of quotes, and post-binding service level that can be expected from underwriting, risk consulting, and claims staff once the relationship is consummated.

A good starting point for brokers is to explain why it is important to provide a comprehensive submission. Clients should be aware of the implications of nondisclosure of key information in the event of a claim and brokers should realize the risk of errors and omissions.

Besides completing an application, brokers should:

  • Educate clients seeking environmental coverage about the type of reports that are essential to include as supplemental information.
  • Provide suggestions on how to organize information that best represents their operations if this is a customer with multiple offices and facilities.
  • Talk to customers about their environmental record keeping systems and what information is available. Is it organized by site or subject matter or are they planning to do a broad data dump of environmental records because it’s easier or they are afraid of a disclosure problem?

For environmental insurance carriers, providing a focused submission avoids superfluous information that can typically result in excessive engineering and underwriting time. For example, it may not be necessary to provide permit-related environmental monitoring data for every site, particularly for companies that have demonstrated solid operating compliance. Conversely, if historical coverage is requested, it is essential to provide comprehensive site assessment and investigation reports. Providing the right information from the start can have a big impact on streamlining the process.

Set realistic expectations
Based on a client’s risks and business model, brokers can play a big role in helping clients understand the extent of coverage that can realistically be expected from the pollution insurance marketplace. Requesting realistic coverage options based on both known and undefined exposures won’t slow down the underwriting process. Some coverage, especially given current market conditions, may very likely not be available based on a company’s environmental and safety history.

Communicating with the prospective clients about the underwriting process and timing, and clarifying that underwriters may request additional information, helps set realistic expectations. “The primary challenge around meeting timing expectations is to make sure the prospects/clients understand the process, that must be managed up front,” says one independent broker. “I explain that quote turn-around time starts once all the required submission items are in hand.”

Get an early start
Starting to collect and prepare submission information well before placement is advantageous. Many brokers will ask a prospective client to complete a carrier application or, better yet, work on it together. This initial collaboration provides a good idea of supplemental submission information that may be required.

“Typically, pollution submissions are more challenging for clients with larger location schedules,” Brianna Wilmoth, Client Service Manager, at Gallagher observed. ““The compilation and sorting of information requires a large time commitment from the client. However, we as the client’s broker act as an extension of their risk management department and can readily assist with sorting the information into a robust location schedule.”

A comprehensive covered location schedule is an important first step in compiling good environmental information for each site.

Brokers have an important job to do once quotes hit their desks and it takes time to develop a path forward and/or recommendations for their clients. Pelurie reinforces that providing quality service requires “having adequate time to summarize and compare coverage options and various form nuances. Receiving late quotes makes it even more challenging.”

Brokers can provide valuable guidance by, early on, providing a list of information needed from prospective clients. A comprehensive request can help the customer develop a plan for compiling data in a timely and efficient manner.

Provide comprehensive submission guidance
Brokers can provide valuable guidance by, early on, providing a list of information needed from prospective clients. A comprehensive request can help the customer develop a plan for compiling data in a timely and efficient manner.

Amber Walker, Vice President, at Marsh USA, Inc. finds that “availability, volume, and quality of due diligence data as well as the timing of information receipt” are the most common challenges when preparing a comprehensive package. She notes it becomes more difficult to meet prospective client’s expectations when there is “inadequate time, insufficient data, or poor insured planning.”

Information to consider in the request may include:

  • A copy of the purchase and sale agreement if this is a real estate transaction or stock purchase
  • Phase I Environmental Site Assessments (ESAs) that identify recognized environmental conditions (RECs) or provide other findings/recommendations.
  • Phase II ESAs, site remediation reports or follow-up documentation for those sites with issues so the underwriter can understand how they were addressed/closed.

Also, it’s important to ensure that prospective clients understand full disclosure is not only a legal obligation, but necessary for underwriters to consider the broadest coverage available. Walker adds that “an initial high quality, comprehensive submission, not only increases efficiency, but results in better coverage while minimizing potential non-disclosure issues.”

Provide quality documentation
Provide a completed application, financials, and loss runs early in the process. A high-quality submission also includes supplemental documentation that directly supports the questions and information requested on the application. Often underwriters may request additional, specific information upfront based on the class of business or specific company risk profile.

Brokers and clients need to clearly identify what data gaps exist for the underwriter and offer potential solutions on how to overcome missing information. Is information available for all locations and/or operations? If information is old, is updated information available to better characterize current site conditions or company operations?

In regard to submission quality, Priester admits, “No question, putting together a thoughtful thorough submission can greatly improve the outcome of results for both pricing and scope of coverage, particularly cleanup costs. On the other hand, if you put a poor submission together you easily get denials or no interest from the insurers especially if it is a tough risk.”

Follow-up with the underwriter
It’s not uncommon for brokers to reach out to environmental insurance carriers, and specifically their underwriters, to help them better understand the account opportunity and technical aspects of the risk, while at the same time, to get them excited about providing a quote and the potential for winning the business.

During these contact points, brokers can make sure underwriters have the information necessary to get comfortable with the risk and provide a competitive quote.
And using any preliminary underwriting feedback can help brokers reset prospective clients’ expectations and explain progress in the underwriting process. Whether the insurance placement is successful or not, a short follow-up can also help identify missteps that can help make the next opportunity more efficient and hopefully successful.

Initiate client/carrier meetings
Short conference calls and virtual meetings can be a great way to provide additional insight into a prospective client’s exposures and coverage needs. There is no substitute for a high-quality submission, but appropriately timed contact with the client can add immediate value. This can help clarify the underwriting information still needed and help fill data gaps, particularly in terms of operational risks and controls.

At AXA XL, we find some of our most successful opportunities result from focused conversations with prospective insureds, brokers and our underwriting, risk consulting, and claims staff.

Priester of USI emphasizes the importance of this aspect when managing time sensitive insurance placements. “Collaborating with all parties in the transaction is key -- getting the client, their consultant or attorney on calls with the insurer to make things happen swiftly sometimes is what we need to do to pull off a short fuse deadline,” she adds.

The value of a quality, timely, comprehensive insurance submission package cannot be understated, especially when looking for quality environmental insurance protection.

Admittedly, this can be a challenge for risk management professionals – particularly in the dynamic world of acquisition due diligence, environmental investigations, real estate transactions and redevelopment projects. However, as one broker succinctly put it, “Everything runs smoother when a complete submission is provided. The process is more efficient, and the quote results are more favorable to the insured.”

Whether you are an insurance buyer or broker, ask yourself if the submission package tells a clear story about historical and operational risks. A good pollution liability insurance submission should speak for itself and be able to demonstrate why it should be a priority for all parties. Taking the time to get it right the first time can reap big benefits. Providing quality information at the outset will result in a more positive insurance placement experience and a more favorable outcome for all stakeholders.

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