Battling a growing minefield of risks requires leaning on trusted insurance partners.
Let’s face it, when real estate owners and developers are navigating a tough market, the first person they call usually isn’t their insurance agent. But now is the time to lean on that agent for expertise in transferring risk – and making sure your firm is working with the right insurance partner.
That’s the advice of Roger J. Stewart, a more than 20-year veteran of the insurance industry and a partner at Insurance Office of America. Stewart will be the first to tell you that he’s not the typical polished insurance agent that is always going to give you the politically correct answer. He’s more of a “tell it like it is” guy.
“I’m going to give you the truth. I’m going to get you what you need, and get it done quickly so that there isn’t a problem in your transaction,” says Stewart. It is exactly that approach that has helped Stewart build a solid base of longstanding clients with a 98% retention rate. In a recent interview with The Real Deal, Stewart noted “one of the most important things that I’ve learned in my years working with major landlords and developers across the country is that, more than anything, they want someone they can trust,” says Stewart. “Trust gives them that peace of mind that they are getting good guidance on the products and coverage they need.”
Such trust is more important than ever as firms deal with a more challenging economic climate along with the double whammy of heightened risks and rising insurance costs. Property owners, managers and developers are battling a barrage of potential risks ranging from extreme weather events to acts of violence at a property. “An experienced insurance broker who can advocate for his or her clients is a powerful ally in any kind of market,” adds Stewart.
Finding the right match
Everyone has an insurance agent. The question to ask is – do you have the right agent? Having the right insurance broker is critical in a difficult market, and that is certainly the case right now. A good broker has strong relationships with underwriters and will always seek the broadest coverages at the best available prices to suit clients’ risk management needs. Real estate owners and developers need creative solutions to solve coverage challenges, such as altering the amount of risk the client retains through a deductible or self-insured retention, which can make a big difference in the cost of insurance, notes Stewart.
In today’s world, people are looking for simple solutions. Much like Amazon, people are used to the click, buy, deliver model that takes all of the stress points out of the process. According to Stewart, good insurance brokers are the ones that are helping to simplify the process and remove the stress points for their clients, which helps to build trust, loyalty and long relationships. A good agent also is going to watch out for a client’s best interest in terms of “rightsizing” coverage and deductibles, as well as keeping an eye on exclusions.
Do you have access to your broker versus access to your brokerage, and is that broker responsive? Having someone who responds immediately helps to build trust, confidence and provide overall peace of mind. “A lot of people confuse success with giving somebody a right answer, but at their leisure versus getting them a response immediately,” says Stewart. “I understand that the owners and developers that I’m dealing with want to know, whatever the issue is, it’s being taken care of, and they don’t have to worry about it.”
Work with a strategic partner
Every agent can sell insurance products, but not everyone can add strategic value. Some developers are struggling to figure out if they can make new projects pencil out amid higher construction costs and higher interest rates. Bringing in the insurance agent on the front end of a deal, much like an attorney or an accountant, allows the insurance agent to add value by showing different ways of transferring risk that may be more cost-effective. A great agent is someone who has the ability to not only sell you products, but someone who has the ability to sit at the table and help you think of solutions to manage risks, adds Stewart.
Frankly, not everyone wants to bring the insurance agent into strategic discussions. However, sitting down with an insurance broker early in a development or new project can provide strategic insights and creative solutions. “People often view insurance as a commodity, but it’s not one-size-fits-all for everybody,” says Stewart. “So, going through a consultative process can deliver huge benefits on the back end.”
For example, Stewart worked with one developer that was planning to build a 300-unit apartment property with a plan for a long-term hold. At the time, the cost of wood was almost on par with that of steel. However, choosing to build the project out of steel would reduce the cost of builder’s risk insurance by 80%, and insuring a steel building versus wood over the next 30 years would likely cost an estimated 70% less. “Being able to have that long-term vision up front really had an impact on the key decisions, and that is the type of value that I bring to client relationships,” says Stewart. “Especially as it relates to insurance, it’s important to look at how to make the best decisions that not only work for today, but also for the future.”
Contact Roger J. Stewart to schedule a risk analysis today with offices nationwide in California, Florida, Texas, and New York.