As we continue to progress through 2020, it is becoming more clear that the insurance market is “hardening.” In other words, the insurance industry is expecting to see an overall rise in premium costs for most businesses this year. Some of these increases in premium rates will be pretty significant, too.
There are a number of factors influencing the rising rates within the insurance market, including catastrophic losses, inconsistent underwriting profits, eroding investment returns, the economy, the cost of reinsurance, and more. There are also factors that specifically impact your insurance rates, like the coverage you’re seeking, the size of your business, the industry that you operate in, the location of your business, your claims history, and more. Learning about which of these factors could be influencing your insurance costs is beneficial when trying to prevent significant increases in your rates.
At Wells Insurance, we want to provide you with helpful information and advice on how you can take action to help minimize any increases to your insurance costs as a result of the hardening insurance market.
Thanks to a Zywave report entitled “2020 Property & Casualty Market Outlook,” there are predictions out there for the increase in rates that we might see in the near future and what can be done to help prevent these increases. In regard to moving forward, this is what the report had to say:
“It can sometimes seem as if the forces determining your insurance rates are beyond your control. But, as
an insurance buyer, it’s important to know how your premiums are calculated, what trends influence
the market and what you can do to get the best price.
Your claims history—which you can control—has an enormous impact on whether your rates go up or
down. That’s where implementing a solid risk management plan will help steer your pricing in a more
favorable direction, both now and in future renewal periods.
The following are five key components of a successful risk management strategy:
- Pinpoint your exposure and cost drivers.
- Identify the best loss control solutions to address your unique risks.
- Create a solid business continuity plan to account for disasters and other unpredictable risks.
- Build a company culture focused on safety.
- Manage claims efficiently to keep costs down.
In addition to implementing the above risk management strategies, working alongside an experienced
insurance broker is equally crucial. Qualified brokers can help their clients analyze their business,
understand their exposures and establish a suite of customized insurance policies that act as a last line
of defense against claims. A broker will also thoroughly explain your policies, notifying you of any
additional considerations to keep in mind.
Remember, the insurance landscape is complex, and while the predictions found in this outlook are
based on expert research, they are subject to change. Fortunately, your partners at Wells Insurance are
diligently monitoring the market throughout the year and will keep you informed of any changes that
might affect your business.”
For a more detailed look at the 2020 predictions and tips for specific segments of the insurance market, check out the full Zywave report by clicking on the link below or by looking at other blogs on our website.