Page 16 - Jan 2020 Insurance Brokers Spotlight

HOW WOULD YOU DESCRIBE YOUR TARGET CLIENT BASE?
As one of the largest national insurance brokers in the United States, our targeted clients are individuals with a handful of investments to multi-portfolio companies, to large national real estate conglomerates and REITS.
WHAT IS A NOTEWORTHY TRANSACTION OR PROJECT
THAT YOUR FIRM HAS WORKED ON RECENTLY?
Most recently we were requested to respond to a Request for Qualification of a real estate investment partnership who, since their founding 18 years ago, had utilized a small, local insurance broker. While the broker had tried to be responsive, the Real Estate firm realized they needed deeper resources and a strategic partner. EPIC presented our capabilities and tied solutions-based outcomes specific to the Real Estate firm’s strategic direction. EPIC was selected to be the real estate firm’s insurance broker and has already provided due diligence and solutions on three projects that included two potential acquisitions and one ground-up construction.
WHAT INSURANCE COVERAGE TRENDS DO YOU SEE
IMPACTING THE REAL ESTATE SECTOR?
The real estate sector — after a number of years — is under pressure to increase prices, reduce capacity and retain higher deductibles, with residential exposures and “Catastrophe”- exposed locations especially under considerable pressure. Some of the reasons cited are: Insurer pressures — reduced returns for insurers on Investment returns; larger losses than anticipated to storms and wildfires — resulting in insurers having the will to push increases or walk away if they feel that they cannot make an underwriting profit. Reduced Capacity / Limits offered by Insurers — Many insurers are cutting back significantly on limits being offered, as well as curtailing
their writings in Windstorm, Flood and Earthquake exposed areas. Industry Groups – There has been a move restricting capacity away from certain industry groups as some
Our real estate practice spans the gamut, helping stakeholders like developers, building owners, property managers and lending institutions.
underwriters are non-renewing accounts within particular
The Jersey City skyline, including EPIC’s Harborside office at 210 Hudson Street.
characteristics, including overall Residential as a class, Frame Construction and Subsidized Housing. Deductibles – Pressure exists to require increased deductibles across most classes of business. Some insurers are imposing minimum deductibles in certain classes and converting flat dollar Business Income deductibles to a “number-of-days multiplied by a daily Business Income value” basis. Catastrophe Cover – (Earthquake, Wind, Flood, Hail, Wildfires) Modeling results are heavily influencing insurer decisions on capacity and pricing, with underwriters particularly focused on “Average Annual Loss” estimates for various catastrophe perils.
ARE THERE ANY EVOLVING EXPOSURES TO LOSS THAT YOU ARE SEEING IN REGARD TO YOUR REAL ESTATE CLIENTS THAT YOU ARE ADDRESSING WITH REGULARITY?
A commonly overlooked exposure for many Real Estate Clients is the purchase of Environmental Coverage. This coverage has evolved into an essential and critical part of most Real Estate insurance portfolios, with the premium being very reasonable. Exposures such as: Lead, Mold, Legionella, so-called “Sick Building” situations due to bacteria in heating and air conditioning systems, Oil Leaks or Spills; normally excluded or provided minimal coverage under most standard Property & Liability policies have increased the take up of this coverage. In addition, the increased liability being imposed on Building Owners, Managers and Condominium Directors and Officers by Unit Owners, Tenants, municipalities and other parties should these events occur point out the necessity
of this coverage. We are also increasingly seeing lenders requiring this coverage in financing or re-financing activities.
Asbestos (an example being the steam pipe explosion in SoHo in summer 2018, causing significant cleanup costs, etc.)
AT A GLANCE...
NEW JERSEY HEADQUARTERS: 210 Hudson Street, Plaza III, Jersey City, NJ 07311
YEAR FOUNDED: 1990
TOTAL NUMBER OF NEW JERSEY EMPLOYEES: 250 TOTAL NUMBER OF NEW JERSEY-BASED BROKERS: 200
AREAS OF EXPERTISE IN REAL ESTATE: Developers, building owners, property managers and lending institutions
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