This month, CRC Group released a new set of REDY Index reports. These reports harness wholesale’s largest data set to give retail agents a powerful tool to discuss pricing with their insureds.
The REDY Index leverages CRC Group’s collection of actionable data – the wholesale industry’s largest. It provides critical pricing analysis monthly, giving you a snapshot of the marketplace. The REDY Index generates instant intelligence on pricing trends by industry or coverage, enabling our retail partners to set accurate data- driven expectations with their clients. Removing the guesswork empowers CRC team members to negotiate competitively, consistently producing better outcomes, better deliverables, and better results.
This month CRC Group released a new set of REDY Index reports. These reports harness wholesale’s most extensive data set to give retail agents a powerful tool to discuss pricing with their insureds.
Neil Kessler, Chief Operating Officer of CRC Group, and Garrett Koehn, CRC’S brokerage co-president, walk us through what we need to know about the reports.
0:00:01.4 Dan Wentz: This month, CRC group released a new set of REDY Index reports. These reports harness wholesale's largest data set to give retail agents a powerful tool to discuss pricing with their insureds. Neil Kessler, Chief Operating Officer of CRC Group, and Garrett Koehn, CRC's Brokerage Co-President, walk us through what we need to know about the REDY Index reports next. Welcome to the Placing You First Podcast from CRC group. I'm your host, Dan Wentz, and this podcast features news and insights from CRC group's vast knowledge base of 4300 plus associates who write in excess of $23.5 billion of premium annually, and we're giving you insider access to what's happening in our company and the types of insurance we place.
0:00:44.7 Speaker 2: This is the Placing You First Podcast.
0:00:51.0 DW: So we'll start with Neil today. Neil, can you give us kind of a high level of what REDY is, what the REDY Index is, and really why should our retail agents care about this?
0:01:01.3 Neil Kessler: Yeah, thanks Dan. Thanks for having me. I'm excited to share with you a little bit what we're doing here. So from a high level perspective, CRC Group has been capturing exposure and loss information on our entire insurance portfolio since 2016. And we've been using that information to create tools and resources to help our producers deliver better results for our retail agents, and to give our retail agents tools so they can have better conversations with their insureds and ultimately produce better results for them. So the REDY Index that we're gonna talk about today, Dan, is just the next step in that overall evolution.
0:01:36.2 DW: Okay, so let's talk about what is the REDY Index? What is it for people who haven't heard about it?
0:01:42.4 NK: Yeah. Well, at a high level, it really just charts pricing changes in various classes of business that we see a lot of in the wholesale space. So there's several indices out there charting overall price changes or price changes in the general commercial space. But we saw a real need for something that is charting changes in price specifically in stuff that wholesale brokers see. So that you can take that data that's available about the overall market or about maybe standard market placements. And when you have an account that maybe tends more towards the wholesale markets to be using that index that we're starting to publish and put out to judge those risks and understand what's happening in the pricing environment there.
0:02:26.3 DW: Alright. So Neil, obviously a big database we're one of the biggest, if not the biggest wholesaler in the United States right now. So what does that mean for the data? Like the size of it, and the reports here for REDY Index, how does that all relate together?
0:02:43.6 NK: Yeah, great question. We definitely are the biggest wholesale data source out there, that I could tell you. We've been capturing this data, as I mentioned for a number of years, and we actually capture it on every single time we're buying an account. Our teams are entering the exposure information, they're entering the underlying information, entering information about how the account played out from a placement perspective, and entering some loss information as well. So we're capturing all three legs of the stool that way, and we're doing that hundreds of thousands of times every year. So it's a big data set, it's growing a lot, and it gives us a lot of good insights to deploy on the behalf of our retailers.
0:03:24.6 DW: Yeah. And so I think it's important to know, it's not five or six accounts, man, this is a lot of data there. And Garrett, how do we synthesise all that data? How do we analyse it?
0:03:36.9 Garrett Koehn: Well, for the index, we have to make sure it's a very consistent data. So we make sure it's the same account year over year, we gotta make sure it's the same limit or tension year over year. So we wind up taking a lot of accounts out of the data on that front, that doesn't change. Additionally, we have to get rid of some of the outliers. So we drop a small percentage off the top and a small percentage off the bottom to make it more consistent, so there's something that is kind of matches the fiscal norm as those get removed from the data. So it becomes a pretty statistically relevant solid data set due to the numbers that Neil was mentioning you were asking about. We're able to do that and publish some more of the data this way.
0:04:21.6 DW: How do you think retail agents are best going to utilize this information? This pricing information that we're putting out through the REDY Index?
0:04:29.6 GK: Right. For the retailers, it's a nice tool. So in the areas where we have a high volume and we have a large amount of data, like Neil was saying, we're able to capture and show the retail agent really what's happening in that marketplace on a month to month basis, it's super dynamic. And so it allows the retailer to be able to speak to an area like Cyber, that's very complicated right now, or excess casualty, which is difficult, or private D&O, and those are the three we've done so far in a way that they could say, yes, maybe you had an increase, but so we have this percent of other clients, or your increase is this much, but maybe the market is doing this much. So it really helps to level set what's happening in the market place on a dynamic basis so that they can give better information to their clients about what's happening.
0:05:22.1 NK: I think it's also about being in front of the renewals. We're doing it all the time with our clients, and so are our retail agents trying to talk about insureds about what's coming up and what to expect. Right, Garrett?
0:05:31.6 GK: Yeah, for sure. And especially in... All these areas are difficult areas right now, but using cyber as an example, that's a really tough one. So if you're a retail agent, you really don't wanna walk into a meeting cold without your client expecting something might change. And so as they're going to the renewal meetings, to go and be able to say, "You know, last month cyber premiums went up on average 37%," is a useful tool so that agents understand it's a certain level of setting on expectations with their customer that, "Hey this might not be a pretty one."
0:06:05.1 DW: And this seems like information that you could use on an ongoing basis, right? Do you think that this is something that an agent... How often are we putting these out first of all? Or how often is the REDY Index released?
0:06:16.7 NK: Well, we're updating it every month, but we'll publish it every quarter to start on our website via our tools and intel of a special edition of that newsletter every quarter, and we'll try to put it out at least once a quarter for all the classes we're targeting.
0:06:30.1 DW: It could become a quarterly update with your re-sale agents, right? This is what's going on in cyber or private D&O. I guess that's how one of the ways you could use it, right?
0:06:41.3 GK: Yeah, it's a pretty easy... We publish it in a single page PDF, it gets posted on LinkedIn, so it's not too difficult to find. Our brokers send it out their customers. It is a very easy way... And whether the market is going up or going down, it's good to tell your client both. So, right now, all the ones we're talking about today are kinda moving up, but most of my career was spent in a market that was going down. And you want your customer to hear it first from you that, "Hey, the market's going down," rather than one of your competitors. So we'll keep our customers abreast of that and they can work on managing their clients [0:07:20.8] ____
0:07:22.8 NK: And we try to keep it short. There's a lot of very long format articles out there that you can find and research and do a lot on, but we've tried to keep this to one page and really just hit the high points and be sure folks can make it through that pretty quickly and understand what's going on. And we do put out other longer format articles regularly, and then we do put out our longer state of the market articles that these are adjacent to.
0:07:51.1 DW: So Garrett, you said that we have cyber, private D&O, and we've also got Excess and Umbrella. So far in the six months, seven months we've been producing these, have you noticed any... Are there any trends or anything that's worth noting from it?
0:08:07.4 GK: Yeah. I mean, all three have their own nuances. The one that's most stable right now but increasing at a steady pace is the Excess casualty area, and that's being impacted by things like social inflation, litigation funding, so we're seeing a pretty steady, between 15 and 20% increases there. And in private D&O, it's also been trending between 14 and 20%. The last couple of months are down, but it's hard to say yet whether that's a trend or not. We do anecdotally see some stabilizing on private D&O, but rates are still going up there as well. And then the most dynamic or the biggest change is cyber right now. So cyber had been steady for probably years of 3% increases, 5% increases, nothing too crazy. If we look back a year ago it looked like that. It started trending up last fall nine, 10% increases. The first quarter started going up more over 20%. And in June the last month that we've calculated so far, we have 37% on average with well over 50% of the customers having an increase of over 20%.
0:09:29.7 DW: We've got those three areas so far, private D&O, cyber, Excess and Umbrella, are there any future plans to do other types of business, other industries, other coverages? What's the future hold here for REDY and the REDY Index?
0:09:44.8 NK: Yeah, for sure. I think we're constantly evaluating those and we're constantly putting around in a thoughtful way. We wanna put them out in a way that we've done our research and we can stand behind the results. And we're just being kind of methodical about developing them and putting them out. I'd like to see one come out on property. That's an area we're spending some time right now and trying to harness in some of our data there to really see what's going on trend-wise. If there's another active storm season this year, which... Hard to predict, but so far it looks active. It could be an interesting time to have some baselines for that market.
0:10:20.9 NK: The only other thing I'll point out, Dan, is even when you see... Not as increasing as much like, for example, on private company D&O or being stable, that still means that prices are going up. So just because it's not up as much as it was last month, or up as much as it was last quarter, prices are still going up and that's up this year on top of the renewal last year, and often top of the renewal the year before, so yeah. I think that's really the key part here is, this has been kind of a growing trend and really driven by the marketplace reaction to a number of different factors that we've covered in-depth in our various articles and newsletters over the last year or two, but don't think that just because when Garrett pointed out that it's not going up as much, it's still going up. So Garrett, I don't know what you would add to that.
0:11:12.8 GK: Yeah, I know, that's true. The acceleration has slowed.
0:11:17.8 NK: But it's still up, and that's still a lot of increase.
0:11:20.9 GK: Still increasing, but at a more steady rate, whereas cyber is accelerating up right now, so...
0:11:26.1 NK: Cyber's got a big old hockey stick going there, which is not surprising if you follow what's going on in that marketplace, so.
0:11:34.1 DW: Exactly how does an agent or anybody who's interested really get access to this REDY Index?
0:11:40.6 NK: Yeah, you can call your favorite CRC broker or underwriter, they'd be happy to share it with you, and you can also download it from our website at crcgroup.com.
0:11:50.3 DW: Yeah, and I thought I'd mention up there, I noticed that we have a handy little filter that has all of the REDY Indexes. You just click one button and you get all of them.
0:12:01.1 NK: That's super convenient.
0:12:02.7 DW: Yeah, it's super convenient.
0:12:07.8 NK: We've also gotten some good press in publications like the insurer and whatnot, about some of the rate trends we've put out, so you can also follow it there I'm sure.