As an organization neighboring Silicon Valley, we hear a lot about localization and its role in building a successful global company. Localization (or L10n as the term is often represented) as described by our techie neighbors is the process of tailoring a product to meet the functional expectations of a specific market. When it comes to underwriting property risks, a “localized” or in-territory model provides a broad set of benefits to insureds and their agents - particularly in California and the West where market conditions present more and more challenges.

Local underwriters provide several distinct advantages due to their proximity and familiarity with their territory. Here’s a detailed look at the benefits this approach can bring to agents and insureds alike:

• 1. In-Depth Knowledge of Local Terrain

  Local underwriters thoroughly understand regional conditions, terrain, and market trends. This local expertise allows them to tailor coverage and solutions to better meet the specific needs of their insureds.

• 2. Turnaround on Inspections

  With their closer proximity to the risks they are underwriting, local underwriters are able to perform timely (even same-day in certain cases) inspections and provide quicker responses. This speed is crucial for property owners that operate at a fast pace and who often require quicker decision-making on last minute submissions surrounding property sales transactions. The ability of local underwriters to perform inspections prior to quoting/issuing reduces chances of mid-term cancellations due to unfavorable inspection results. Thorough physical inspections can also facilitate greater pricing consistency from term to term, thus reducing need to shop accounts each year due to substantial premium adjustments.

• 3. Stronger Relationships with Local Agents

  Local underwriters are better positioned to develop strong relationships with local agents and other local businesses. This connection facilitates clearer communication and helps ensure risks are thoroughly understood, thus reducing the likelihood of coverage gaps. These relationships foster trust and collaboration, which is advantageous for navigating complex underwriting scenarios.

• 4. Effective Loss Control

  Familiarity with local conditions allows underwriters to offer more relevant and effective loss control advice. They can provide insights and recommendations that are tailored to the risks and challenges unique to the territory.

• 5. Reduce Operational Disruptions

  In-territory underwriters can leverage their local knowledge to help determine adequate limits and coverage. This collaborative approach increases the likelihood that, in the event of a loss, the property can be rebuilt with like kind and quality, allowing it to resume operations.

In summary, the strategic advantages of localizing a product for its specific market isn’t confined to international expansion. Commercial property owners and their agents have a lot to gain in working with property underwriters utilizing a “localized” model. The combination of a deeper understanding of regional conditions, faster service, effective risk management, and the ability to respond quickly to the needs of agents and their clients allows local underwriters to provide a more efficient, comprehensive and often more creative underwriting product.