What’s Happening in the Builders Risk Market

Builders risk is moving fast right now and if you’re a retail agent, that can be a gift or a trap depending on how you play it. We’re seeing softer property conditions, abundant capacity, and genuinely competitive pricing, but the market is still picky where it counts: renovations, flood considerations, technology-driven projects, and the steady grind of attritional losses. We break down what’s really driving the shift and where the leverage is hiding for agents who know how to use it.

We’re joined by CRC Specialty brokers Philip Young and Randy Van Horn to talk through what the marketplace looks like in the real world. The E&S builders risk marketplace is no longer a last resort; it can be a relevant, flexible source of capacity that helps fill gaps, follow form, or support quota share placements on complex construction. We also explain why CRC’s exclusive Insurisk Builders Risk facility can be a differentiator when speed, insight, and meaningful capacity decide who wins. If you’re placing builders risk insurance or any kind of construction insurance, listen now, share this with a teammate, and subscribe for more. 

Visit REDYIndex.com for critical pricing analysis and a snapshot of the marketplace.

Do you want to take your career to the next level? Join #TeamCRC to get access to best-in-class tools, data, exclusive programs, and more! Send your resume to resumes@crcgroup.com today!

Transcript

Welcome And Market Setup

Amanda Knight 0:22

Welcome back to Placing You First, CRC's podcast dedicated to helping retail agents win more business and navigate complex markets with confidence. I'm Amanda Knight.

Scott Gordon 0:32

And I'm Scott Gordon. Today we're diving into one of the most active and opportunity-rich segments in property right now, and that is the builder's risk market.

Amanda Knight 0:43

That's right. We're seeing a lot of movement, softer property conditions, abundant capacity, competitive pricing, but also some very real underwriting discipline around things like flood, technology-driven projects, and attritional losses.

Scott Gordon 0:58

Yep, and here to help us break it all down, we brought in two of CRC's specialties brokers, not just any brokers. These guys know more than a little bit about filters risk, and it's Philip Young and Randy Van Horn.

Dynamic And Competitive By Design

Amanda Knight 1:12

This is the Placing Your First Podcast from CRC Group. This podcast features news and insights from a vast knowledge base of more than 5,500 associates who write more than 30 billion in premium annually.org.

Scott Gordon 1:36

Welcome to the podcast. Well, let's start big picture. Philip, if you could describe the builder's risk market in one word right now, what would it be?

Amanda Knight 1:47

Keep it clean. It's it's this show's for kids. Just kidding.

Phillip Young 1:51

One word. I would describe it as dynamic. Brandy, you've got a one-worker.

Randy Van Horn 1:56

I like competitive. Competitive, yeah. I mean everything's kind of on the table. Dynamic kind of, I guess gets both of those, so it's a good word.

Phillip Young 2:04

Hang on, let me get the thesaurus out of my bottom drawer.

Scott Gordon 2:06

Right, right. Well, we're trying to drive into what's driving this competitiveness. I mean, in a nutshell.

Amanda Knight 2:13

Are we seeing also increased competition among carriers and MGAs?

Capacity Surge And Falling Rates

Randy Van Horn 2:19

Yeah. I mean, three years ago it took on a $50 million deal, it took us three to four markets. Now we have multiple markets that are able to do the full limits. There's carriers putting out 100 million now. Um, so just that influx of capacity with the in the MGA space just drives competition, and there's I guess not enough projects to go around. So everyone's fighting over the same projects, and it's driving rates down, terms more favorable.

Amanda Knight 2:46

But are there any areas where you all are still seeing some pushback when it comes to builders risk?

Phillip Young 2:51

Randy, I think you may be the better one on this just because I think the only one I could think of would be the renovations. I think you probably do a little bit more of the urban renovations than I do, frankly. I mean, we do some rural renovations, but not the urban ones you see.

Randy Van Horn 3:04

Yeah, I agree. I mean, the frame marketplace, if ground up frame, used to be the tough ENS play, um, but that has become so competitive. There's so many markets doing it now. Um, it's the tougher renovations, whether that's frame renovations or structural renovations with heavy work. Um, there's a lot more information required up front. There's fewer carriers that have the expertise to do it. But with the competition in the market, there's more carriers getting into it, I guess. So, like the rest of the market, it's becoming more competitive, just a little slower than we are seeing on the ground up side. And then, like as far as the ground up side, I would say we're actually seeing some of the better construction projects get we're getting closer to the admitteds on them. We're still not writing a ton of them, but we are getting closer where, I mean, they used to be three to five cents, and now it seems like we're almost meeting in the middle, around like eight to ten on a lot of these. So we're seeing those as well, where historically we couldn't compete.

Renovations Still Take More Work

Phillip Young 4:00

Yeah, I would just say on to your question on is there any part of the market that's tough and responding to what Brandy said, the renovation market continues to be difficult, mainly centered around valuation for existing structures and the abundance of information that you need initially on the project from multiple carriers that might need different data inputs to be able to accurately underwrite the account. Um, and so there is still capacity in that market, but it's it's stringent capacity. Um and line size is a little bit more protected there than it is on other classes of business and other projects we see.

Amanda Knight 4:36

And what about maybe you guys can talk to us a little bit about um frequency losses? Are those still driving underwriting decisions?

Phillip Young 4:46

I would just say that pricing has uh been more driven based off of technical analysis and modeling and less off of loss analysis and uh maybe some recency bias for claims. Um there certainly are still pockets of the market that have experienced wildfire claims. What'd you say, Randy, on fires on just general frame construction?

Randy Van Horn 5:05

Yeah, I mean, we're seeing more flexibility. I mean, they're still happening. We still see them in the news. There's articles out there, there's still these large frame projects that are burning down in the final phase, um, which is unfortunate for the market, but it doesn't seem to be shifting it like it once did. Um, so we are seeing AOP deductibles start. You can negotiate them down depending on the risk. Um, water damage is still one of the loss drivers in the industry. So, I mean, carriers still want to see a higher water damage deductible, but like Philip said, I mean, it's becoming more competitive everywhere. So, what was 250k? You may be able to get 150k now. Maybe 100, but you're I mean you're not going to see it down at 25k typically, but there's flexibility where there wasn't before.

Scott Gordon 5:47

So are buyers still taking on more risk?

Loss Drivers And Deductible Flexibility

Phillip Young 5:51

I would say that buyers don't have to take on more risk in this market because generally the deductibles that they're offered are very low retentions. And pricing is such that even when they're offered, say, a higher water damage deductible, for instance, they're able to go to a secondary market and buy that deductible down relatively cheaply if they want to, to really lower their retentions.

Randy Van Horn 6:13

Yeah, I mean, we've quoted a ton of water damage deductibles and AOP buy-downs. I honestly have only bound a couple, and we've quoted many, probably, I don't know, in the teens, twenties, thirties, and I think we've bound one or two. It's just it seems to be like the options there if they need it. They just don't seem to see the trade-off being sure uh profitable, I guess.

Amanda Knight 6:37

So what about? I mean, we are seeing complex construction in the news a lot lately when it comes to things like stadiums, AI data centers, um, these large-scale or high value projects. Um what about those? Does do those conditions still translate, or are we seeing something a little more specialized there?

Data Centers And Mega Project Limits

Phillip Young 6:57

I would say that those specialized projects, the ENS marketplace used to be thought of as a secondary market for those type of projects. And what I think is unique now is that we can bring capacity to the table and be very relevant on those projects, along with the direct to retail markets. So, for instance, for data centers, ENS carriers are now able to offer $50, $100 million limits on projects, even higher in some cases, to be relevant in quota share placements on those or on buybacks for specific perils. Um, we certainly are seeing more projects come to the forefront that we're able to participate on when it comes to infrastructure work, uh government uh entity work, and we're able to bring a relevant offering that's competitive with expanded coverage and potentially better pricing than what the standard market's able to offer in some cases. So I think it's a really growing area, something that we're not thought of that we need to be because we're really competitive there uh at the moment.

Randy Van Horn 8:00

Yeah, the the market of frame only, essentially. We're we're now being kind of considered for some of these larger, more specialized projects. And they are still typically being led by the large um admitted capacity. So we're offering capacity following their terms, which is great for our market because there aren't a ton of specialists because it is a newer exposure. So um we're able to offer, like Philip said, those $50, $100 million lines where before, I mean, it would have been five or 10 two years ago that wouldn't have been helpful to get these done. So I guess we have meaningful capacity now, um especially with our exclusive Builders Risk Plus facility, to offer on these more technical projects that we historically weren't competitive on in the past. So we're filling gaps, whether that's on the DIC side or just on the large limits excess, because I mean these data centers are huge. They're multi-year projects that um not every market can handle, but I guess we finally have the kind of capacity and resources available to be able to help out on them.

Why Expertise Wins In A Soft Market

Amanda Knight 8:58

Yeah, and and to pick up on what both of you said, Philip and Randy, it sounds like you know, we we joke about how ENS used to be the marketplace of last resort, but um you've got the capacity. ENS has the flexibility, right? Um we also have brokers who truly know the space, right? And I think that makes a big difference. ENS brokers are used to working in um these kinds of areas, and there's also nuance nuance, there's also nuance in understanding which markets are gonna be competitive and which aren't. Um and so it seems to me that on the ENS side it's not just about the capacity or the flexibility, but also about that collaboration piece. Right? Retail agents want markets that will engage, they want brokers that will engage. Um so I mean, do you does that make sense to you guys, that collaborative piece of it? Because this isn't like a one size fits all scenario, it sounds like it sounds like there's some some instrument interesting pieces here that you can't just you know put in a put in a box. Does that make sense?

Randy Van Horn 10:01

Yeah, I mean, I would say expertise is almost more important in the software market because there's multiple options available, where in the hard market kind of got a lead and you needed every market. So you didn't really get to dictate the terms or the pricing. Whereas now having someone who specializes, um you're able to ask for the better pricing, the better terms that are available in the market that you may not even know if you don't do these projects every day, essentially. So we have with all the flexibility, you have to know what you can get essentially to help the insured or what the insured is looking for, which helps when you have someone who specializes in it there to negotiate on your behalf.

Phillip Young 10:37

Following up on what Randy said there, I think that what we were able to bring to the table in terms of specialization on some of those is that we we know the markets that are gonna be best suited to lead and the forms that are gonna be best suited for each individual project. And we've already seen all the pitfalls that can occur with bar prior experience. And so we're able to help our agents avoid those and get to the lead terms quicker, which is going to allow us to backfill the capacity we need for each project a lot quicker and really be able to offer a product that's gonna be impactful out of the gate versus having to rework a deal multiple times as it changes. Um, and also we've already seen some of the things that may come up during the course of negotiations on a construction project that we know are questions we need to ask initially, that we're not gonna have to come back and ask later and have our agents go back to the contractor, the developer, whoever it may be, multiple times in the process.

Randy Van Horn 11:30

Yeah, and to what Philip said, like we know what happens throughout the construction project as well. So we know the carriers that can be difficult on inspection recs, the carriers that may push bad on it on inspect on extensions and look to at increased rates, versus the carriers that are very agreeable and willing to work with you and the insured, um, whether that's limit increases, extensions, um, inspection recs that always seem to come back very similar, but um, you know, the carriers that are gonna give you five days to answer versus kind of work with the insured there, which helps a lot, avoid any issues midterm, which uh saves everyone a lot of stress.

Builders Risk Plus Facility Advantage

Amanda Knight 12:06

I mean, how many times have we all heard underwriting really loves going back and forth 18 times, right? Nobody said nobody ever. Um so Philip, talk to us a little bit about, or maybe it was you, Randy, who mentioned Builders Risk Plus. Um, we all know what that is because it's an exclusive to CRC. Um, but it's a product for Builders Risk available only through our specialty brokers. So can you guys maybe talk with us a little bit about why that facility is such a differentiator for you?

Randy Van Horn 12:38

Yeah, I mean I can certainly start off here. So Builders Risk Plus uh started, I think, two and a half years ago when Ryan came over from AIG. So his expertise, sorry if I'm not allowed to say that, but um his expertise or experience in the industry has helped a lot. And honestly, not on just projects they can write for us, but other projects where I may be looking for market expertise on. He's been in the industry for a while, so he's been able to help direct me where to go. And then having an in-house facility that can put up 60 million of wood frame or I think up to 200 million of non-combustible construction we've seen. Um, whether that's in a lead or quota stare position, has been a huge help because if sometimes these on a lot of these mid-sized projects, it's out to the contractors bidding on it, the developer. So there's multiple wholesalers involved in that space, and having an exclusive product where we can quote one carrier doing the whole thing is very helpful.

Phillip Young 13:31

Yeah, I think Builders Risk Plus has been a huge advantage for us at CRC in being able to bring meaningful capacity to the table on projects quickly. And so we're able to bring a lead quote to the table on both small, medium, and large-size projects under one product heading. And also we're able to provide quota share capacity that is able to follow form of almost any carrier we deal with. And the response time being in-house is great. So we're no longer waiting on two or three carriers to get back to us to fill out a project or to lead a project. We've got an in-house group that's able to turn around something quickly for us. Um, and the expertise that they're able to provide via their prior experience for previous carriers is unparalleled in the market.

Randy Van Horn 14:14

Yeah, and I can say from experience, they have just helped me find a $55 million ground up project. They did the whole thing. Um, and they've also quoted follow capacity on some large renovation projects that has helped us win the deal.

Amanda Knight 14:27

And I mean, not to shamelessly plug insure risk, but it is only available through CRC specialty producers.

Phillip Young 14:33

That's correct.

Amanda Knight 14:34

Right?

Phillip Young 14:34

That's right.

Practical Advice For Retail Agents

Amanda Knight 14:35

So you definitely want to reach out. All right. So let's make this actionable. If you are a retail agent, you're listening today, from your perspective, Philip and Randy, what should you be, what should they be doing right now?

Phillip Young 14:49

I think our retail producers in the construction marketplace shouldn't be afraid to pick up the phone and call us on any project they're looking at. I I think that we can provide expertise and advice, even if it's not something that ends up in our marketplace or that we write. Uh, for instance, we've seen a number of housing developments, uh, clubhouse, amenity projects, and what used to be more your garden variety standard marketplace that we've been able to come in and provide competitive pricing on and provide meaningful capacity where they might not have thought of us in that way before. So I would encourage our retail clients to pick up the phone and call us. They might be surprised at what we can offer compared to what we've been able to in the past.

Randy Van Horn 15:28

Yeah, and to Philip's point, I just had one that came in Friday because they couldn't get a response from their underwriter. They had a direct quote, they just wanted to make sure all the subjectivity checked out, couldn't get a response. I looked at the quote, I was like, we can beat this, and we ended up beating it and it just bound uh 20 minutes ago. So um, like he said, use like think of us for stuff you haven't always in the past, engage a wholesaler early, and leverage competition because there's a ton of it out there, a ton of capacity. So letting us kind of help guide you to the best terms for your insured, I think is a great way to utilize us and us to utilize the market.

Rapid Fire!

Scott Gordon 16:05

We talk all the time about how deep the bench is and how deep the knowledge is here at CRC. So use us the more you know, and we know a lot. So is there anything else we want to cover before we get into fun things, Amanda?

Amanda Knight 16:18

I think we're good, unless Philip and Randy have anything else they want to share.

Phillip Young 16:23

What are your fun things list?

Scott Gordon 16:25

Well, not that builders risk is not fun, Philip. I mean, come on. Uh, we've learned a lot here, but we have this little feature that we like to do called rapid fire, where we just ask you a question and you tell us the first thing off the top of your head. What do you say?

Amanda Knight 16:40

Are you guys game? Exactly. My favorite part. Okay, ready? You can pick only one phone call email or text.

Phillip Young 16:51

Phone call and call.

Amanda Knight 16:52

Really? Did you say phone call too, Randy?

Phillip Young 16:54

I did.

Amanda Knight 16:55

I mean, I think I pick email, maybe. I don't know. I mean, it's set my inbox is a dumpster fire, so what's one more email? Scott, what would you pick?

Scott Gordon 17:07

I would pick none. Uh psychic connection is the way to go. All right, question number two. What is your go-to comfort food?

Randy Van Horn 17:15

So I'm gonna say fish tacos, and that may be because I'm getting ready to go on vacation. So I'm I'm thinking something tropical.

Phillip Young 17:23

Such a loaded question right now. I just got back from the doctor and he told me to go on a Mediterranean diet. So thank you.

Amanda Knight 17:31

Oh man.

Phillip Young 17:32

Go-to comfort is pizza.

Amanda Knight 17:34

Yeah, and you don't have to make that, you can just order that even better.

Phillip Young 17:37

Oh, but I love making it.

Amanda Knight 17:39

Really? Do you have a pizza oven?

Phillip Young 17:41

A green egg, which converts to a pizza oven. Oh, yeah.

Scott Gordon 17:44

That works. That's right.

Amanda Knight 17:46

You know who else loves a pizza? Jeff Dunn. We talk about it every time he's on the podcast.

Scott Gordon 17:51

That is correct. He really does. Yeah. Um, question number three, our final question. Um, what is one habit or life hack that keeps you so darn productive?

Amanda Knight 18:04

What is saving you right now? It could be saving you. A really good nanny. It could be I don't know, just life advice out your email and just not looking at it anymore.

Randy Van Horn 18:19

I wish we could do that. Can't can't do that one, but uh I would say uh staying active, whether it's in the morning, if you're working from home, getting out at lunch, after work, whatever works for you, um helps keep everybody sane.

Amanda Knight 18:33

Philip, that can go with your Mediterranean diet.

Phillip Young 18:35

That's right. Uh I think clearing clearing emails and voicemails by the end of the day is the one thing that keeps me sane and productive and knowing that I'm staying on check.

Amanda Knight 18:45

Got it. So no procrastinating for either of you on any front.

Randy Van Horn 18:49

I didn't say that, but no. Try not to.

Final Takeaways And How To Connect

Amanda Knight 18:54

Philip and Randy, thank you so much for joining us today. Um, being good sports and also sharing with us about builder's risk. We appreciate it.

Scott Gordon 19:02

Thank you. Thank you. And to our retail partners, if you're working on a builder's risk opportunity, especially complex, layered, or cat exposed projects, anything that involves someone with a lot of knowledge, connect with your CRC producer. And don't forget to ask about the Insure Risk Builder's Risk Plus.

Amanda Knight 19:23

At CRC, our goal is simple to help you win more business while placing you first.

Scott Gordon 19:28

Thank you for listening to Placing You First, and we'll see you next time.