Starr Specialty Lines & Starr Technical Risks: Long-term success fueled by expertise and innovation
"When it comes to loss activity, the overall state of the market in recent years has been unprecedented," said Richard Shaak, President and CEO of Starr Technical Risks and Starr Specialty Lines, both members of the Starr Companies. "During the past 18 months, we had the earthquakes in Haiti, Chile, New Zealand and Japan, along with other catastrophic events, so loss activity in the industry from a CAT severity standpoint has been unlike anything we have seen in the past."
When you add in the non-modeled CAT losses, such as tornadoes, snow, ice storms, etc., the trend of claim losses is about double what had been expected in typical years, Shaak added.
Given those unprecedented catastrophic events, brokers and businesses who have been working with solid, financially secure specialty lines carriers have been able to rest easier. In fact, Shaak said, the past 18 months offers a very clear indicator of how important it is to have a dependable, long-term, experienced carrier when it comes to the complex risks and coverage that are part and parcel of the specialty lines business.
Starr Technical Risks and Starr Specialty Lines each deliver just that type of experience and commitment to clients, whether they are brokers or insureds.
Starr Specialty Lines has been providing solutions for property needs, whether it is a constructionproject, a bridge or a real estate development. Starr Specialty Lines has a wide appetite for the construction business on a worldwide scale and currently is one of the lead markets for municipal projects including roads, tunnels, and bridges across North America. It also offers clients risk management engineers and experienced claims handling services.
In Starr's latest specialty lines growth strategy, it recently teamed up with two other carriers to form the Starr Specialty Lines Property Facility, a $200 million facility in which all three entities share risks equally.
"We combined three strong companies to launch this new market," Shaak said. "Starr is the front end of that entity, providing all the marketing, underwriting, claims and loss prevention services."
Shaak explained that in the specialty market there are a few very large and many small players. The Starr Specialty Lines Property Pool sits right in the middle.
"When you think of all the different types of businesses, there is no area we can't cover," Shaak said. "That truly differentiates Starr from the competition. We have two strong companies that handle every different type of risk, depending on whether its specialty lines or technical risk, as the latter requires specific, highly technical skills."
Since 1967, Starr Technical Risks has been providing insurance, claims, and loss control services to the highly specialized energy-related and technical industries such as oil and gas, petrochemical, chemical and power generation industries. Starr Technical Risks products include physical damage, business interruption, boiler & machinery, operator's extra expense (control of well) and construction.
All along, we've expanded our scope to encompass other complex occupancies, including pharmaceuticals, electronics, steel, foundries, metal working, pulp and paper, and other specialized process industries," he said.
Shaak noted that Starr Technical Risks's in-depth knowledge and innovative approach has allowed it to make a market available for most operations, no matter how difficult or complex the exposures. As such, Starr Technical Risks focuses on risks that require a very high degree of engineering services and has been one of the leading markets in those lines of business.
"Even with the unusual loss history over the past 18 months, we've weathered it well," Shaak said. "Yes, it's been a challenge, but we're still here and will be for the long term."
"We characteristically offer more than one solution to solve a client's problem, whether that means loss mitigation for business processes or how to protect a facility," Shaak said. "One thing we don't do is use a cookbook mentality. We have a staff of highly skilled professionals who will visit facilities for underwriting and loss prevention which allows us to better work with clients in developing solutions that fit their exact challenges."
For the specialty lines and technical risk markets, clients need to be able to depend on carriers who have both a proven track record and the expertise to underwrite and manage claims for these often complex risks, as well as being in touch with trends and changes in the global economy that can affect client success.
In the past decade, for example, the change to "just-in-time" inventories has resulted in some very challenging situations when a natural disaster may negatively affect a stockpile of product needed to mitigate the loss. For instance, the auto industry faced certain paint shortages in 2011 because the pigment for those paints came from areas destroyed by the Japanese earthquake and devastating tsunami. Shaak says it's critical to be able to know the client, so these situations can be mitigated.
"The challenge for both underwriters and clients is while clients will be reimbursed for losses, they also can lose market share because they were not prepared," Shaak said.
"You have to know how to get your arms around situations like this provide the best possible coverage and loss prevention for clients," he added. "Our ultimate goal is to be a partner with clients through the various market cycles, but most of all, to be there in the future as well. New companies enter into the business and often struggle with longevity due to the lack of experience underwriting in this segment."
Shaak adds that technical risk is one area, due to its complexity, where surprises can be especially acute.
"That's why we work so closely with niche markets and brokers," he said. "Our clients often take large retentions and we also write some large policies too. It's a very sophisticated area and our clients often know their risk as well as anyone. So we listen and work together. For instance, the risks in writing a terminal building versus a petrochemical plant are worlds apart. Yet, we can do either."
At the end of the day, Shaak said, Starr Specialty Lines and Starr Technical Risks offer experienced, knowledgeable professionals intently focused on tailoring innovative solutions to meet specific client needs.
"We spend the extra time and effort to come up with the best solution for each client," Shaak said.
To learn more about Starr Specialty Lines or Starr Technical Risk, visit www.starrcompanies.com
(The above piece is part of our continuing Insights series designed to highlight key products and services to our readers. This paid-for Insights was written and edited by Risk & Insurance®
on behalf of our marketing partner. Additional Insights can be found on our Web site at www.riskandinsurance.com/.)
October 14, 2011
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