The commercial insurance market changes constantly. As one of the largest privately held brokers, we understand industry issues and trends and how they could impact business insurance premiums and coverage availability.
Here are some of the insights on current market conditions that we have gathered. To download your complimentary copy of our insurance industry trends report, complete and submit the form that follows this blog post.
Year-Over-Year Premium Rates: A Mixed Bag
A range of factors, from risk type to technology and environmental impacts to industry-specific vulnerabilities, all play a role in premium pricing. Over the past 12 months, the automobile insurance market has seen the highest trending premium pricing, ranging on average from 5 percent to 15 percent. According to The Council of Insurance Agents & Brokers, the second quarter of 2018 represented the 28th consecutive quarter of rate increases for this market. Automobile premiums are predicted to continue to rise, due to an uptick in loss frequency and severity.
Environmental risks and workers’ compensation fall at the low end of the spectrum, with rates remaining flat or decreasing. Improved risk control measures, as well as support for employee health and wellness programs, are contributing to overall lower workers’ comp claim frequency.
Employment Practices Liability: #Metoo and #TimesUp May Mean #HigherRates
Claim activity surrounding sexual harassment and equal pay is on the rise. As a result, employment practices liability insurance underwriters are increasing their retentions in difficult states and reducing capacity for large employers. Depending on exposure changes and loss history, companies can expect premium increases to continue.
Cyber Insurance: Industry Makes a Difference
In terms of the number of data breaches and the number of records exposed, 2017 was the worst year ever for the United States. Depending on the study being referenced, the average cost of a cyber event ranges between $400 thousand and $11.7 million. Despite this, premiums are expected to remain stable for most companies, due to market capacity. However, for those industries most vulnerable to cyberattacks, namely healthcare and public entities, premiums likely will continue to rise.
Group Captives: Attractive Alternative for Best-in-Class Risk Managers
As premiums increase, best-in-class middle-market companies are seeking better ways to manage and finance their risks. Group captive members can significantly reduce their insurance costs over time, better manage premium volatility, capture investment income and underwriting profits, and leverage cash flow advantages. Hylant’s middle-market, heterogenous captive, Haven Re, launched in the third quarter of this year.
Property: Catastrophic Weather Impact
There is good news, and there is predictable news. The good news is that ample capacity remains at an all-time high. The predictable news is that carriers are seeking rate increases because of events such as Hurricane Florence ($11.2 billion in estimated losses) and Hurricane Michael ($10 billion in estimated losses). Those organizations with catastrophe loss exposures could see premium increases as high as 10 percent.
If you have questions about your commercial insurance, contact your Hylant service team member or your local Hylant risk management expert.
The above information does not constitute advice. Always contact your insurance broker or trusted adviser for insurance-related questions.
Helping you stay informed of trends in the market is just one of the ways we show our commitment to you and your business. To download your complimentary copy of “Market Update: Commercial Insurance State of the Industry, Third Quarter, 2018,” and to receive similar information in the future, complete and submit this form.