Message from Brett Halsey, QBE NA Head of Credit & Surety
As we work through the winter grind of Q1 2016, I wanted to take a look back over the past year and reflect on our operations and growth. Our continued support from our insureds, the broker community and our internal/external business partners has been extraordinary, and we are very grateful to each and every one of you. As a result of our relationships and underwriting, 2015 was a year of record growth in new business writings. We grew our overall top line by 30%, we built a strong foundation in policy count, we improved our hit rates on quoted submissions, we successfully launched Surety in the NY/NJ/Florida regions, and we officially opened our trade credit practice in Sao Paulo, Brazil. With all this growth, we were able to meet our bottom line targets as well, due in large part to prudent underwriting and tailoring our policy structure specifically to our clients' needs.
We look forward to 2016 being similar, which will require increased face time with our relationships in the market, meeting with our clients, and visiting buyers that will help provide the ultimate value for our customers. We expect to add additional staff to our Group Risk Management team to support Mills Ramsay in his new role, and augment more bench strength to our trade credit and surety underwriting teams in 2016. We do anticipate a more volatile year when it comes to claims activity, as we are already seeing increases in claims cases in correlation with the global economy (China specifically) and with issues facing the commodities markets (Oil, Energy, Steel). In this issue, we will:
- Provide a Trade Credit & Surety overview
- Present an overview of our claims handling and include our claims brochure for ease of use
- Spotlight and profile Donna Messick, our Senior Claims Handler in Specialty claims
I want to personally thank each and every one of you for your continued support of our Credit & Surety team and product lines, which continue to lead to excellent results and build out of our book. It is because of you that we are able to succeed, and we look forward to working with you throughout 2016. If you have any questions, please contact me.
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Trade Credit news
2015 ended as an outstanding year for Trade Credit by every financial measure:
- Gross Written Premium set a record, representing an increase of 26% over 2014 and exceeding our 2015 goal by 18%.
- Our policy count exceeded 200 policies for the first time, beating our 2014 level by 23%.
- Submission flow by our broker partners topped 1,400, a 15% increase over 2014.
- Our all-important bind rate on quoted business hit an impressive 34%, several points over our 2014 bind rate.
On the negative side, we continued to see a decline in premium rates throughout 2015, although the rate of decline has slowed considerably. We also saw an uptick in claims frequency in the second half of 2015 that has continued into 2016.
The current year will present challenges to keep our growth rate climbing. Our premium rates are beginning to firm as a by-product of higher claims volume. The depressed pricing in the metals, commodities, and energy markets, along with the climbing rate of insolvencies in China and Brazil are increasing our caution in underwriting. With the continuing support of our broker partners, we are optimistic that 2016 will be an even better year than 2015.
We look forward to working with you, and I look forward to hearing from you.
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Surety news
2015 was a good year for our Surety infrastructure build out as we continued to focus on the execution of our Surety business plan and concentrated on developing strong relationships while providing excellent service to our brokers and clients. We are extremely pleased with our new business efforts and support from our producers. During the year we expanded our team by adding four new members including our newest addition, Mike Carson, who joined us as our Senior Surety Claims Examiner and has already been a big contributor.
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| | The site and foundation work for this 12-story, 200,000 square foot building. Our client is the general contractor for the project. |
During the fourth quarter, we bonded a $45,000,000+ mixed-use residential and retail project in New York City. Barry Shabashkevich and John Hunter visited the job site with our agent and contractor and saw firsthand the excavation and foundation progress, including heavy machinery actively working the site in preparation of the next concrete pour. Surety is planning to open other locations and will continue to add bench strength to our existing locations by adding additional staff. For 2016, we will look at the possibility of opening several new offices, and we are actively looking to attract the right people to lead our efforts in new areas. We are currently planning to broaden our footprint in the New England, Middle Atlantic and Southeast areas, and we are excited about our future as we expand our infrastructure.
Please let us know if we can help you with any of your new business opportunities.
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Claims overview and brochure
At QBE, our claims staff is committed to providing the best service to our customers by making the claims process simple and seamless. Open communication and building a strong relationship with our customers and brokers is essential in achieving that goal. In doing so, we build a partnership which enables us to work together as a team, rather than simply an insured/insurer relationship.
Over the past year, claims has become a shared service within QBE, which we believe is beneficial to our customers since we now have additional resources to assist in the claims process across all lines of business. For instance, we can rely upon other claims professionals to share their expertise in a particular trade sector or market if and when the need arises with a Trade Credit claim. Having accessibility to this knowledge can often be helpful in moving the claims process along without taking our customers away from running their day-to-day business. During the last quarter of 2015 and the beginning of 2016, we have seen an increase in both the amount of claims filed and past dues, resulting primarily from default situations with a buyer. In particular, we are seeing a higher volume of claims in the food sector partially due to the drop in commodity prices on certain items. While we expect prices to stabilize over the course of the next few months, there could be further negative impact. We recommend that once a buyer begins to default, early intervention is essential to minimizing the loss, and increases the possibility of working through the non-payment for optimal results. Reporting past due situations to QBE promptly, as required under the policy, can also be crucial in developing a strategy to collect from the buyer. Often, it becomes necessary to engage the services of an outside collection agency or attorney to assist in collecting past due balances, especially when buyers are located outside the U.S. Since QBE has offices in various countries, we may be able to provide a contact in a particular country. For further information on Trade Credit claims, please contact Donna Messick, QBE Trade Credit Claims Manager at 347.703.3728 or donna.messick@us.qbe.com.
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C&S employee profile
 Who is Donna Messick?I am a Baltimore girl born and raised. That being said, I cheer for my sports teams, win or lose. I look forward to warm weather because I love my Maryland blue crabs and being outside. I am a wife and a mother, both of which are full-time jobs, and loving every minute. I'm a grandmother, which isn't always a full-time job, though I wouldn't mind. I'm also an equestrian, and when I'm not busy with work and family, I love to spend as much time as possible with my horse, Toby.
What is your role within QBE and favorite part of your job?
I am the Sr. Claims Handler for all Trade Credit claims. Learning the ins and outs of the various industries that we underwrite is very interesting, but the most rewarding part of my job is hearing the relief in a customer's voice when we are able to help them through a very difficult situation with a buyer; whether that means the buyers pays or we pay the claim.
What makes QBE special to you?
The Trade Credit team is just that... a true team. It is a pleasure working with people who have a "can do" attitude and are willing to roll up their sleeves and get in the trenches every day. That level of support is difficult to find and often underestimated. QBE cares about their employees and is always looking for ways to improve the daily work life for everyone.
What do you like to do outside of work... interests, hobbies?
Outside of work, I love spending time with my family. We are a very close family and it is not uncommon to find us gathered at my home multiple days of the week. I consider myself an expert shopper. Recently, I have recruited my 86-year-old father as my shopping partner in crime, and I admit the student may be surpassing the teacher. As I mentioned before, I am the owner of a beautiful horse named Toby, and when time allows I enjoy nothing more than spending time him. He can be incredibly stubborn, but as I have always been told by my trainer, a perfect horse never made a horseman. I relish the time we have together and embrace the challenges that come with riding horses. As Winston Churchill so accurately stated, "There is something about the outside of a horse that is good for the inside of a man." Anyone who has ever taken a quiet, peaceful trail ride knows exactly that feeling.
If you were a super hero, who would you be and why?
If I were a superhero I think I would choose to be Batman. Why, you ask? Well, the answer is really quite simple. If I'm going to fight crime, I'm going to drive a fast car, and I'm surely going to know how to accessorize.
What talent do you have that many people don't know about?
Wow... this is a tough one as I'm not sure if I have a talent that many people don't know about. I mean let's face it, what good is having a talent if you don't share it with others? My children would say my best talent is keeping our family close. I try to make sure that we never forget how important family is and how lucky we are to have one another. So I don't think it's a talent that many people don't know about, but it's certainly the talent I am most proud of.
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