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Commercial Insurance Industry Trends

Mar 05, 2019 Market Update. Commercial Insurance. State of the Industry. Fourth Quarter. 2018

As 2018 drew to a close, we gathered the latest intelligence on commercial insurance trends and market conditions. To download your free copy of our insurance industry trends report, complete and submit the form that follows this blog post.

Here are a few highlights.

Challenging Conditions Driving Automobile Insurance Costs
According to The Council of Insurance Agents & Brokers, the third quarter of 2018 represented the 29th consecutive quarter of commercial auto rate increases. Premium rates are expected to increase anywhere from six percent to 12 percent, possibly more for those companies with poor loss histories. Those demonstrating robust driver safety programs (owned and non-owned), use of safety technology and other risk control initiatives will fare best.

Challenging underwriting conditions are driving the increases. Auto fatalities are rising due to distracted driving. The cost to repair cars and trucks is becoming more expensive due to the technology aboard today’s vehicles. Multimillion-dollar jury awards in single-plaintiff accidents are being imposed at an unprecedented rate. Premiums likely will continue to rise for the foreseeable future.

Emerging Reason to Consider Pollution Insurance Policies
Site pollution and contractor pollution liability coverage premiums are likely to remain flat for the foreseeable future, with two exceptions: (1) where substantial habitational mold risk exists, and (2) five- to 10-year insurance programs for former industrial sites where redevelopment is planned.

There also is growing concern around emerging contaminants, especially in drinking water. PFAS (perfluoroalkyl and polyfluoroalkyl substances) are an example where chemicals phased out decades ago are now being detected in groundwater—thanks to improvements in detection—and are posing human health risks. While it appears that there is no imminent federal regulation forthcoming under the Safe Drinking Water Act, state regulation of PFAS is moving more rapidly. Further, as science progresses, we will detect and see other commonly used chemicals correlate with human health problems and the degradation of natural resources, making them subject to future regulation and likely leading to exposure for claims related to remediation, bodily injury and property damage.

Decorative image. The Hylant Podcast. Industry Insights.

+ Listen to Episode 01 of The Hylant Podcast 
Environmental Risk Practice Leader Don Bryant discusses the
role of emerging contaminants like PFAS in environmental liability.

Food Industry Likely to Be Served Product Recall Premium Increases
Food recalls and alerts made the news regularly again last year. Losses related to food contamination have intensified as the use of social media has magnified negative publicity. Companies working with pet food, bulk grain, ground meat and food ingredients can expect to see the largest premium increases, possibly as much as 10 percent.

While large companies often make the headlines when the topic is salmonella-related food poisoning, this type of contamination very often originates from small- and middle-market food providers. Not surprisingly, product recall insurance carriers are evolving to service these smaller businesses as they consider how to manage their risks more effectively.

Learn More
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, Fourth Quarter, 2018,” and to receive similar information in the future, complete and submit this form.

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