COMMERCIAL PROPERTY OWNERS INSURANCE Insurance Institute of Leicester

COMMERCIAL PROPERTY OWNERS INSURANCE Insurance Institute of Leicester - 1 st March 2017 Gregor Elrick, Technical Underwriting Manager, AXA Insurance CONFIDENTIALITY LEVEL

Commercial Property Owners Insurance Agenda What is Property owners business? Size of the Market London versus the Regions Features of the Market Key success factors Wordings Underwriting and Pricing Trends Questions 2 | Commercial Property Owners Insurance MENTION DE CONFIDENTIALITÉ

Commercial Property Owners Insurance What is Property Owners business Commercial Property Owners insurance is protection for customers who own buildings for investment purposes but do not intend to occupy those premises Cover will generally include Buildings, Loss of Rent, Property Owners Liability Can also include Employers Liability, landlords contents, legal expenses, etc Also called Real Estate, Property Investors Commercial Property Owners Insurance 3 | MENTION DE CONFIDENTIALITÉ

Commercial Property Owners Insurance What is Property Owners business Insurance Company funds Segregated pension Funds Domiciled Pension Schemes Real Estate Investment Trusts Private Property Companies Estates and Charities Private investors Housing Associations Hotels and Pubs Foreign investors Commercial Property Owners Insurance 4 | MENTION DE CONFIDENTIALITÉ

Commercial Property Owners Insurance Size of the Market Data not perfect and information is based on AXA estimates Estimated to be £ 2. 2 bn GWP Split £ 1. 3 bn London market v £ 900 m Regions Increasing competition – QBE, Tokio Marine, Manchester Underwriting Top 5 à à à Aviva Zurich AXA Allianz RSA We estimate there is £ 871 bn worth of Property Assets that can be classed as Property Owners buildings 40% is owner owned, 60% is owned by investment funds 5 | Commercial Property Owners Insurance MENTION DE CONFIDENTIALITÉ

Commercial Property Owners Insurance London versus the Regions The two markets not always aligned Bespoke Real Estate teams normally located in the London market Large specialist Broker presence What does this mean: à à à à Bespoke wordings Limited ability to differentiate London property market has different influences Market expertise Insurance Act Different client base End client understanding Does this make things better or worse? Commercial Property Owners Insurance 6 | MENTION DE CONFIDENTIALITÉ

Commercial Property Owners Insurance Features of the Market Profitability à à à Buildings and rent Price sensitivity Who pays the premium Valuations Establishing your sum insured Focus on cover Wide policy wordings High commissions Service standards Portfolio Underwriting Large limits required à Stability à Capacity/Reinsurance Commercial Property Owners Insurance 7 | MENTION DE CONFIDENTIALITÉ

Commercial Property Owners Insurance Key Success Factors Understanding client Innovative solutions Professionalism Price Service Technical expertise Relationships Commercial Property Owners Insurance 8 | MENTION DE CONFIDENTIALITÉ

Commercial Property Owners Insurance Wordings Issues Wide cover Large limits Insurance Act Dilapidations/Fly tipping Cyber Legal Expenses Terrorism Bank Interests Commercial Property Owners Insurance 9 | MENTION DE CONFIDENTIALITÉ

Commercial Property Owners Insurance Underwriting and Pricing No different to anything else Exposure rating/Burning cost/Blend Any technical price should include the following à à à à à Attritional losses Large Losses Cat Expenses Commission Profit Shares Risk Management Funds Etc, Etc Soft market still applies to Real Estate Commercial Property Owners Insurance 10 | MENTION DE CONFIDENTIALITÉ

Commercial Property Owners Insurance Trends Death of the High Street Buy to let On-line purchasing Student Accommodation Cross Laminated Timber Push fit plumbing/Escape of water Under insurance Brexit Japanese Knotwood Decline of London office market Generation rent E-Commerce airbnb Commercial Property Owners Insurance 11 | MENTION DE CONFIDENTIALITÉ

Commercial Property Owners Insurance Questions Commercial Property Owners Insurance 12 | MENTION DE CONFIDENTIALITÉ