Changing Weather Patterns Demand New Property Insurance Solutions
Q&A with Don Doyle Jr., Senior Vice President, Excess & Surplus Lines, and Dawn Chapel, Vice President of E&S Brokerage Operations, Cincinnati Insurance
Billion-dollar catastrophic events are increasing, and the insurance industry is getting creative in its response.
In this interview, Cincinnati Insurance Senior Vice President Don Doyle Jr., and Vice President Dawn Chapel discuss several new products that were developed to quickly meet client needs in changing markets. They also share how working with Lloyd’s informs their U.S. approach, and their strategies for recruiting and retaining talent.
Q
What are the current risk trends that you find most important or concerning?
A
Doyle: The industry has experienced a significant increase in the number of billion-dollar catastrophe events in the United States. According to the National Oceanic and Atmospheric Administration, the average number of billion-dollar events is eight and a half events per year over the last 40 years. Between 2020 and 2023, that number hovered around 20 events—and in 2024 we’ve already hit 21 billion-dollar events.
U.S. property owners have been hit with rate increases due to the number of increased events and increases due to economic inflation. That means insureds are paying higher prices, higher deductibles, and in some cases, they’re just losing their insurance altogether. The industry needs to get creative and help clients, and that’s why we’re creating some of the products that we’ve launched over the last few years.
We launched our E&S carrier (Cincinnati Specialty Underwriters Insurance) and created our own in-house brokerage (CSU Producer Resources) in 2007 to make the process easier for agents by giving them direct access to their E&S underwriter. In most cases, the same field claims and loss control associates serve our E&S and standard commercial policyholders, allowing seamless collaboration on developing new solutions for agents to offer their clients.
For example, as the personal lines property market tightened, we were able to quickly launch a homeowner product to help our agents find coverage for their high-net-worth clients in catastrophe-prone areas. And because of our recent acquisition of Cincinnati Global Underwriting, we’ve been able to broker products through CSU Producer Resources to Lloyd’s, such as new commercial property options and a wind/hail deductible buyback program.
Q
You also recently introduced a new wildfire deductible buyback product. Do you mind giving an overview of that and what challenges you faced in developing it?
A
Chapel: With increased wildfires, especially in the Western states, insureds have been having to accept higher deductibles and that leaves them with higher out-of-pocket costs in the event of a wildfire loss. Our wildfire deductible policy is a separate policy that the insured purchases—so if there’s a covered loss, we will help pay that deductible.
We faced a few challenges when we built the product. One was just the sheer size of those deductibles. In some cases, we’ve seen up to 50% wildfire deductibles—so if you’ve got a $20 million building, they’re taking a $10 million wildfire deductible in extreme cases.
We also had challenges because it was new to the market. There was virtually no information available: no existing forms to look at, no rates to look at. We looked to our Lloyd’s syndicate for the expertise that they had in some of those Western states with wildfires and in how wildfires affected their property book over time.
Q
Has Cincinnati Insurance’s partnership with your Lloyd’s syndicate helped inform the work you do in the United States in other ways?
A
Chapel: With the expertise and support of Cincinnati Global Underwriting, we’ve been able to offer specialized and unique insurance products that we might not have been able to otherwise in the domestic market. Collaborating with our syndicate has allowed us to share our expertise in underwriting, risk management, product creation, and claims service, and then get their expertise back.
It’s been interesting as we’ve gone through this process: Lloyd’s has their way of doing things, and we had our way of doing things. We married those two together, all while keeping a focus on the independent agents we do business with and how we could improve the process for them.
Q
Given the changing industry, what strategies have you employed to attract and develop the talent you need for today’s insurance industry?
A
Doyle: We’ve built a culture of continuous learning. We offer career advancement opportunities within our company by encouraging people to develop skills over time, take insurance classes, and have more experienced people mentoring them through the process.
To bring in new talent, we sometimes have targeted recruitment campaigns to reach potential candidates who have relevant skills in the insurance industry. We also have a great internship program. In fact, RISE recognized us as one of the Elite 50 internship programs in the industry. We’ve had interns come in, learn the business, find that insurance speaks to them, and they enjoy Cincinnati’s culture, so they stay on after graduation.
