Insuring property in the state of extremes
Someone once said ‘California only has two kinds of weather -- magnificent and unusual.’ Billy Volz, Regional Underwriting Leader for XL Catlin’s West region North America Property, might agree. From XL Catlin’s Los Angeles office, Billy loves to take advantage of California’s magnificent weather and he also enjoys helping his clients get a better handle on the unusual aspect of California’s weather – weather that often poses a risk to clients’ properties. Here he shares his insights on the challenges of protecting properties in California and other parts of his region.
What prompted your career journey out West?
Volz: I like to jump on opportunities when they present themselves. When I took this job about 18 months ago, our regional property book was growing. We had recently increased capacity and had more products to offer, so there was opportunity to grow even more. I saw this LA-based opportunity as a great chance to engage both my underwriting skill and property engineering background and make an impact on our regional book of business. Not to mention it offered an option to escape the east coast winter weather. And I’ve taken advantage of both. My wife and I, and now with our 18-month-old son, (Austin), take advantage of California’s weather as much as possible, spending much more time outside than we ever did. There are few places on this earth where you can take a mountain hike and then 20 minutes later be cooling off on the beach. Working and living in California has its advantages!
You have a degree in civil engineering from Auburn University and started your career as a property risk engineer. How has your experience as a property risk engineer helped in your underwriting?
Yes, after graduating Auburn I took an engineering job with a large property carrier and spent several years consulting clients on a broad array of fire and natural catastrophe risk exposures. In 2009, I joined XL Catlin in New York to take on the role of underwriting, helping clients advance their business strategies and expanding our footprint throughout the Mid-Atlantic and New England regions. I think having worked on the engineering side has helped me approach property risk from a diagnostic perspective , and now, as an underwriter, deliver a relevant, solution oriented insurance program.
Do you serve different clients on the West coast than you were used to serving on the East coast?
Each region of the country has its own special concentrations of business and industry. In New York, I would underwrite more financial services businesses and when I was in Atlanta, I saw a lot of manufacturing risks. In California, we do see a lot of technology firms and leisure type businesses. But still there is a healthy mix of everything.
Do west coast-based clients face unique challenges in protecting their properties?
Every region of the country has some unique challenges. California sees its fair share of natural catastrophe events. For example, as far as precipitation, California is a state of extremes. It has alternated between drought and excessive rain throughout recorded history. Then there are earthquakes. Southern California sees around 10,000 earthquakes a year – and thankfully most too slight to be felt. Given drought conditions, much of the west is under the current threat of wildfires. In 2017, over 9,000 wildfires in California topped more than $12 billion in insurance industry losses. And when it does rain, because of the drought and fire impacted lack of vegetation, mudslides can occur. Last year, the industry saw more than $400 million of mudslide related losses. So yes, there are some unique risks out here.
Another weather occurrence that is highly underestimated is hail. In Colorado – another state in my West region – we’ve seen some very damaging and costly hail storms. Last year, one hail storm that hit Denver resulted in some $1.5 billion in property damage.
Every region of the country has some unique challenges."
How does your team help your clients prepare for these extreme events?
It’s a team effort. Both from a coverage and risk engineering side, we look to partner with our clients to develop a mutually beneficial program that protects the downside from a variety of natural catastrophe and other physical events . For instance, our XL GAPS/Property risk engineering team has a distinguished history in fire prevention and mitigation dating back to 1890, and as one of the original founding companies of NFPA , share knowledge with our clients to help them prevent or minimize potential damage from extreme events.
Of course, we also make sure that their coverage addresses these risks or look for ways we can develop enhanced coverage or add capacity to better meet changing needs.
What property insurance have you developed lately to meet clients’ changing needs?
Recently we worked with our construction team to develop a new Course of Construction (COC) endorsement for our Platinum Property coverage. Available to clients who purchase 100% of their property coverage from us, our COC endorsement covers new buildings, additions and renovation projects under construction against the devastating and costly impact of fires, floods, vandalism, theft, and other unwelcome hazards. We are able to offer comprehensive COC coverage that can help our clients seamlessly address construction risks not typically protected under standard property coverage or other COC endorsements currently available on the market today.
What businesses are showing the most interest in this new endorsement?
Hospitals for one. The state’s healthcare industry has a lot of expansion plans, for a couple of reasons. They are expanding their facilities to meet the demands of a growing population. And many older hospitals are upgrading to comply with California Senate Bill 1953 for seismic retrofitting. Other states such as Utah and Colorado are experiencing some of the country’s fastest population growth rates generating more demand for additional healthcare facilities. This new endorsement is intent on helping our healthcare clients streamline their insurance coverage during the construction or renovation process.
Billy Volz is extremely adept at help clients protect their property from a host of perils. To find out how, contact Billy at firstname.lastname@example.org .