Retail is evolving fast, and the insurance industry's approach to risk has kept pace. Brokers Trust's Sandra DiLecce (pictured) said that with the rise of omnichannel retail - from brick-and-mortar to e-commerce – transforming how retailers operate, underwriting has been shifting in step.
“Risk profile, in my eyes, doesn't really change, exposures always do,” she said. “There's a lot of underwriting criteria required... it's kind of difficult to decipher how our insuring partners now underwrite with this additional type of information.”
For brokers trying to navigate these complexities, that ambiguity makes their role even more critical. While insurers may still view the underlying exposures as static, DiLecce suggested that brokers are on the front lines of explaining how emerging risks intersect with traditional coverage.
Cyber remains the fastest-growing line of commercial risk, but, for brokers, it’s also the hardest to sell. “It’s simply because we need to do a better job in explaining to them where the risks lie,” DiLecce said. “We do that, but... it’s more of a coverage where, ‘Well, I'm not prone to that. That won't happen to me.’”
To bridge that gap, Brokers Trust has focused on planting seeds - asking clients foundational questions that expose blind spots. “You ask them a simple question of, ‘Do you have a multi factor authentication process in place?’” she said. “That, in itself, allows them to ask us a question, because some of them may not know what we're talking about.”
While those conversations may not result in an immediate sale, DiLecce stressed their long-term value. “We may not sell it today, but... they may consider looking at it at a different time,” she said. “We've started the conversation. And that’s, I think, the most important role that we can play as insurance brokers.”
The inflationary squeeze has pushed underwriters to reconsider long-held assumptions about property and inventory values, particularly for small to mid-size retail operations. DiLecce described the current market as a “vicious cycle,” with escalating repair costs, rising claims, and more frequent extreme weather events all contributing to pressure on margins.
“Insurers are actively re-evaluating risks right now. We're looking at deductibles, limits, and rates,” she said. “They’re truly working more as portfolio managers so that we can assess risk together.”
She said brokers must stay proactive to ensure retail clients aren't caught underinsured. “We’re constantly speaking with our clients... to see how their business is evolving,” she said. “We need to ensure that our clients are properly insured. We cannot have... limits incorrect.”
Insurers, she added, have responded constructively. “They are truly helping in that regard,” she said. “I think they're doing a really good job in being able to have conversations with them.”
