Ask the Expert: Lauren Tredinnick

Service is the heart of what we do at Preferred, administered by Public Risk Underwriters. We are constantly looking for ways to help our members overcome the risk and insurance challenges they face. One of the ways we do this is by sharing the expertise we have with you. Please enjoy our inaugural “Ask the Expert.”

Our Expert: Lauren Tredinnick, President – Public Entity Risk Solutions – Munich Re Specialty Insurance

What is a major emerging exposure that all of us in the public sector should learn more about? Why?

In terms of Casualty coverage, PFAS, or “forever chemicals,” are receiving increased attention from carriers. PFAS are a group of manufactured chemicals, and these chemicals are used to create foams for fighting fires. The foams are commonly used at airports, in the military, and in municipal firefighting operations. The product has been required at military bases and airports for decades, but its frequent use in training exercises and emergencies has elevated PFAS levels in surrounding groundwater and drinking water. These firefighting foams and PFAS are now the source of increasing litigation.

For Property coverage, the concern is around the increase in frequency and severity of natural catastrophes. Perils we considered secondary perils (Severe Convective Storm) are causing as much damage as primary perils (Hurricane). These catastrophes are causing more and more insured losses. These CATs also having an impact on infrastructure that is already outdated in many parts of the country.

Why is it important for public entities to have up to date, comprehensive property appraisals?

Insureds with up-to-date, comprehensive property appraisals are viewed as a more favorable risk. From the underwriting side, a carrier will be more comfortable with the risk as a whole. They will have more confidence in their modeling because the values are what drive loss expectancies. If the values are wrong, then the loss expectancies are wrong. More confidence in loss expectancies can result in carriers being more confident in providing more capacity. Some carriers will avoid programs that do not have scheduled limit or margin clauses, and that are not properly insured to value. Not properly insuring to value can lead to gaps in coverage. When a public entity is underinsured, they will have a hard time recovering after a loss – which can be devastating. Ultimately, having up-to-date comprehensive property appraisals leads to good data. Good data drives the confidence in the review and approach. When underwriters are more confident in the data/loss expectancies, there is less need to build in conservatism.

What is the one question that is most asked of you by your clients?

Our clients always ask us, “Are your other clients seeing this?” Or “How are your other clients addressing X?” We strive to collaborate with our clients, foster relationships with experts, and facilitate conversation across clients and the industry. Round tables, peer group discussion and affinity or conference group participation are key ways to connect.

What is the one thing that you wish all your clients knew, did or practiced?

One specific thing for all of us to understand is that social inflation is vastly different from economic inflation. Economic inflation can be planned and prepared for, and therefore can be accounted for in the underwriting process. Social inflation is unpredictable, and generally challenging to account for in the underwriting process. However social inflation is a current driver of claim activity across the country.

The best way to be prepared is to have an informed approach to risk management. Practice traditional loss control methods and consider innovative risk mitigation tools such as use of cameras, data and sensor technology.

About our expert

Lauren Tredinnick is the president of Public Entity Risk Solutions within Munich Re Specialty Insurance. She joined Munich Re in 2008 and has worked in the company’s public entity client group since 2011. She has a CPCU designation and double majored in Actuarial Science and Risk Management & Insurance at University of Wisconsin – Madison. She earned her Master of Business Administration at DePaul University in Chicago. Lauren has served in the Wisconsin Army National Guard since 2003 and currently holds the rank of Sergeant First Class.