Underwriting book can convey more with better info, art

As rising property catastrophe insurance prices are prompting many real estate companies to provide more exposure information to underwriters, a risk manager of one real estate firm is using the same technique he's used for nearly 20 years.

Throughout his career, Stephan Upshaw, vp of risk management at Equity Residential in Chicago, has put together property/casualty renewal books detailing his employer's exposures for underwriters.

Mr. Upshaw recalls that early in his career, there was little art to the way real estate companies' exposure information was presented to underwriters. “You spend millions of dollars on insurance purchases, and back then you were working on really crude spreadsheets,” he said.

It struck him as “crazy that all these household-name companies and their consumer groups would put out these really fancy books, and their investor groups would put out their investor books, and then you'd have these really crummy PDFs,” Mr. Upshaw said.

Mr. Upshaw works closely with Equity Residential's investor relations department in developing the underwriting books. Those books ultimately look much like those the company prepares for investors.

The property insurance renewal book is a concise—the 2012 book was 16 pages—and attractive document that quickly explains what distinguishes Equity Residential as a company, the company's economic and financial fundamentals, details about its property holdings and insured values, an overview of its loss history, and a discussion of key risk management factors. The booklet is illustrated with high-quality images of Equity Residential properties.

“We're a very large cat risk. I have to differentiate us from all our competitors, which I think these do,” Mr. Upshaw said. Given the size of his company's account, he said, he often deals with senior-level people at the insurers he works with, which makes “the ability to give them in 10 minutes what they're looking for” significant.

Mr. Upshaw's earliest underwriting books were assembled using clip art. They've evolved considerably since then.

“I've had underwriters say this is just fantastic,” he said.