Case Study: Company Growth in a Renewal Account

As the economy seems to be heading in a positive direction, one particular contractor experienced abnormal revenue growth of 80% over last year. The increase in work brings a higher potential for losses, increasing vehicle and equipment inventory, and the company’s desire to grow their operations in the sector that has proven to be most profitable to them. As Beacon Hill looked at their upcoming renewal at least 30-45 days before expiration, we certainly noticed all of these changes. Twenty-two midterm endorsements had been issued midterm, for vehicle changes alone. Three new claims had been reported within the previous 6 months and we saw a huge shift in their operations. A company who had historically classified themselves as an Environmental Contractor performing mostly industrial cleaning services now contributed more than 75% of their operations to waste water disposal.  

Because of an early renewal submission and discussion with the incumbent carrier, we were able to notify the agent that we would be facing some changes in the renewal terms. Because of the claim activity, we would not be seeing a substantial decrease in the rate, but more of a flat rate when compared to the expiring premium and revenue projections. Because of the operations, the incumbent carrier would only be able to offer the same limits as expiring on the GL/CPL/Professional and Follow-Form Excess policies ($5M) and would not be able to increase these limits at a later time if needed. Due to underwriting guidelines, we also had to remove the Auto policy from the Excess and increase the liability limits on the Auto policy to $5M in order to comply with contract requirements.