Navigating evolving risks and contract uncertainty in the cyber insurance market are two significant challenges in specialty insurance today.
For Michael Pellegrini (pictured), head of Marsh Specialty in the US and Canada, staying ahead of industries and trends to be proactive about clients’ needs is critical. Speaking to Insurance Business, he said the hard property market and cyber insurance are two areas of concern for Marsh Specialty customers today.
The uneasiness around contract uncertainty in cyber, in particular, is something Marsh Specialty is focused on alleviating for its clients.
“The cyber market has become more competitive in terms of securing terms, quotes, coverage for clients, but I still find that there's uncertainty in language and that pertains to the fact that cyber insurance isn't the ‘end-all, be-all’ to covering the risk,” said Pellegrini.
“I continue to find that the market is not aligned; it's not coordinated. We still have uncertainty in that space, which leads to discomfort around risk transfer and coverage. We’re still on a journey to make it better for our clients.”
Pellegrini’s appointment to head Marsh Specialty in the US and Canada was announced last month.
He oversees a wide-ranging portfolio, spanning Marsh’s aviation, construction, credit specialties, energy & power, financial and professional lines, marine, cargo and logistics, and private equities, mergers & acquisitions businesses within the regions. Before this role, he was Marsh’s North American marine, cargo, and logistics practice leader.
“The ability to be on that pulse is very challenging because part of the nature of risk is we don't know what's out there before certain things happen,” Pellegrini said.
“The property market is in a very difficult place with a rate increase environment and a remapping of catastrophic risk. Working across all industries and understanding what that means to those customers is a hot-button issue.”
The specialty insurance leader also spoke about the highly dynamic field of specialty insurance and what keeps him up at night.
“Things change very fast,” Pellegrini said. “I think part of our value to our clients is understanding their industries and speaking their language.
“When I look at the dynamic of our business, there are so many unique factors out there that it's all about staying ahead, staying in front of the industry and the trends, and creating solutions for our clients prospectively versus reactively.
“But I do sleep at night knowing I'm surrounded by an amazing group of people that live and breathe the industries of our clients.”
Marsh Specialty is taking a proactive approach to solving contract uncertainty in the cyber insurance market, according to Pellegrini.
“We try to be as clear as possible about how the programmes interact and then try to define where we find the grey areas,” he said.
“If we know what’s unclear, we can work with the insurance markets to get better language and policies that will be more definitive, and we're doing that globally. It's not just happening in a vacuum and in a given product line.
“We’re digging in with our placement leadership and cyber team to coordinate ourselves. It's not just taking what the market gives us; we're trying to create a market environment which allows us to get our clients the best result possible today.
“We are also working with Guy Carpenter on the reinsurance side because we find a lot of what is disconnected is how the reinsurance contracts are written for insurers. We're trying to attack this from every angle.”
Aside from bolstering its knowledge and resources in the specialty fields, Marsh Specialty is also fighting a battle for talent.
As head of Marsh Specialty in the US and Canada, Pellegrini is focused on bringing the best people to the fold, training them, and creating a career environment.
“It’s a big part of who I am,” he said. “I'm always thinking about staying current and relevant to our colleagues so that we can provide the best for our clients.”
One of Pellegrini’s goals in his new role is to carry forward the work of his predecessors and continue to evolve Marsh Specialty’s offerings and services.
“I feel blessed to be stepping into a role where the last two people who held it, Pat Donnelly and Michelle Sartain, are in even more elevated positions within our firm and have started a movement around our specialty business of lines within the brokerage community,” he said.
“We have amazing professionals, and when you’re aligned with our clients and their industries, aligned internally within Marsh and its vast global network, it’s a very powerful value proposition.”
What challenges and opportunities do you see in the specialty insurance market? Share your comments below.