Product Family

One of the things I find most striking about commercial P&C insurance is how it blends financial elements which are somewhat commoditized with highly valuable, tailored services.

This distinction is most apparent when we’re presented with a slip from a broker representing a client who is considering either moving some or all of its insurance coverages to a different insurer or taking out a new policy. While we can perhaps modify the conditions or sub-limits/deductibles somewhat, the risk transfer components of different insurers’ proposals generally don’t vary widely in the end. And it’s not uncommon for the business to be won or lost based on slim differences in premium levels.

In my experience, however, clients don’t always look closely at the different carriers’ claims capabilities and overall quality of service during these marketing exercises.

Why it matters

In one sense, that’s understandable. For most clients and lines-of-business, the bulk of the claims involve smaller, more predictable losses. And risk managers and brokers rightly assume that insurers can handle those competently; a carrier that struggles to resolve “typical” claims quickly and fairly will have difficulty retaining its clients.

But most organizations can expect to experience some number of “atypical” losses; it’s when these occur that insurance is most relevant.

When a firm is hit with a significant loss – a fire destroys a manufacturing facility; cyber-attackers encrypt and hold data for ransom; a design error with far-reaching implications is discovered midway through a major construction project, and so on – that’s when clients rely most heavily on their insurers’ claims teams.

Events like these have the potential to cause substantial and possibly long-lasting impacts. And the performance of the insurer’s claims team can make an enormous difference in how well the firm recovers from the incident.

In other words, a carrier’s competence when things go wrong – from small and routine incidents to large and complex disasters – is indeed when it matters most.

Let’s talk!

It was a painful lesson that – thankfully – I learned early on in my career. That is: The worst time to meet with a client for the first time is when the settlement of a significant claim has gone off-track. I’ll skip the details but suffice it to say that this was not a happy meeting for either the client or me. And although the loss ultimately was resolved satisfactorily, the settlement process was longer and more involved than it needed to be.

That experience reinforced for me the value of organizing meetings among clients, brokers and the carrier’s team during the marketing process, followed by periodic sessions as need be after the policy is bound.

That’s an opportunity for us to become familiar with the client’s operations, business objectives/challenges and risk appetite; information and insights that will help us better meet its needs. Clients can also use these discussions to convey their expectations on different topics, including:

  • What management information they want to see and how they prefer to access the data; and
  • Their preferred communications practices – when, for instance, do they want to stay closely involved in a claims settlement and who needs to be kept in the loop.

Looking under the hood

Such discussions can be beneficial in familiarizing clients with our preferred approach to handling claims for different lines-of-business as well as the range of services we offer. These interactions also can make an immense difference in helping us form relationships with clients where we are both a capable payer that’s there when things go wrong and an encouraging partner to help things go right.

In particular, insurers have different philosophies, approaches and systems for managing claims. And their global capabilities are often more highly developed in some countries/regions compared to others; that can matter a lot for clients with sizeable exposures in a specific locale. Likewise, the level of authority a local team has in resolving claims can vary considerably between different carriers.

And for some risks, clients can benefit by partnering with an insurer that has dedicated practice leaders who are experts in that line-of-business and knowledgeable about the latest developments and innovations in the field. That can be especially important in construction and financial services, for example, where the claims can quickly become highly technical and complex.

The same holds for cyber. Virtually every organization today is vulnerable to a cyberattack, and the nature of the threat is continually evolving. As a result, an increasingly important priority for many companies is having ready access to technical specialists who can respond immediately in the event of a cyberattack, as well as attorneys and PR/crisis management experts who strive to lessen the collateral damages.

A final thought: Commercial insurance can be strictly transactional – client pays premiums, insurer covers claims. But when there is a substantial loss, the resolution and settlement process can only benefit when the client, insurer and broker work together cooperatively and with a clear understanding of their respective responsibilities, needs and capabilities. And in my view, it’s preferable to start building those relationships from the very beginning, and not when the fire has already been lit.

About the author:
José Ramón Morales is Country Manager, Iberia for AXA XL and is responsible for its operations in Spain and Portugal. He joined XL Catlin in 2012 as a Client Distribution Leader and then served as Deputy Country Manager. He was named Country Manager in 2016. José Ramón is based in Madrid and can be reached at


More Articles

Global Asset Protection Services, LLC, and its affiliates (“AXA XL Risk Consulting”) provides risk assessment reports and other loss prevention services, as requested. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. AXA XL Risk. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any publication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, AXA XL Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with this publication, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.

US- and Canada-Issued Insurance Policies

In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
US domiciled insurance policies can be written by the following AXA XL surplus lines insurers: XL Catlin Insurance Company UK Limited, Syndicates managed by Catlin Underwriting Agencies Limited and Indian Harbor Insurance Company. Enquires from US residents should be directed to a local insurance agent or broker permitted to write business in the relevant state.