Market rates are rising, while availability of markets and limits of insurance are decreasing.
We are in what our industry refers to as a ‘hard market’, meaning pricing is increasing and availability is decreasing. This article from Business Insurance outlines the fact that each line of coverage in Q3 2020 saw an increase. A number of factors contribute to this market, including but not limited to catastrophic weather losses, reinsurance pricing increases, and a trend towards higher awards, judgements, and settlements on liability claims.
D&O rates increased by 11.5 percent, followed by umbrella and excess liability up 8.5 percent in a quarter in which the average rate increase was 6.25%, MarketScout said in a statement. The average rate increase in the second quarter was 4.8%. Workers compensation rates rose by 0.5% — the first increase this line of business has seen in over five years.
Credit: Business Insurance
Education… There are a number of ways you and your agent/broker can help mitigate or reduce rate increases. Below is a list of several ways risk management best practices allows underwriters to favorably price renewals/new business opportunities.
- Provide detailed explanation of prior loss history.
- Provide and implement risk transfer agreements/contracts.
- Provide documentation of safety training/safety programs.
- Provide directed care/return to work programs (work comp related).
- Provide other market options when significant rate increases are based on a carrier’s lack of appetite/desire to get out of a specific industry.
- Provide attention to detail on your company’s Total Cost of Risk (see article here)
Please simply send us a note if this is something you want to discuss further! If your insurance renewal takes place between late November-early March, now is the time to start a conversation! Email me at: email@example.com.