State of the current insurance market

two ladies having a business discussion on a laptop

April 22^nd, 2024

Rates are increasing, coverage is difficult to find, and the insurance industry is still changing more frequently than normal. The last 18 months have seen inflation, supply chain issues, and more weather-related claims than normal. Additionally, insurance companies that back, reinsure, or share the risk with insurance carriers, are facing significant investing challenges.

These are the primary reasons why rates have been increasing, but not the only ones. Insurance is a complicated business.

This cycle will eventually pass, however, we are expecting no change for 2024!

Let’s Dive in a Little Deeper

The property and casualty insurance industry cycle is characterized by periods of soft market conditions, in which premium rates are stable or falling and insurance is readily available, and by periods of hard market conditions, where rates rise, and coverage may be more difficult to find.

We are currently in a hard market. Perhaps one of the hardest markets that has been seen in recent times.

Insurance carriers are experiencing more frequent claims and higher claims payouts, which hurts their bottom line. Insurers attribute much of this to supply chain issues, which means it takes longer to repair or replace damaged property at much higher costs; larger catastrophic weather events, which increase claims payments; and what are termed as “social inflation,” which is the willingness of jurors to award largely unexpected sums of money at trial, forcing insurers to settle claims they may have traditionally taken to trial.

With less capital available, insurers reduce their underwriting appetite. This includes the amount of coverage they will write for certain classes and in what areas they will provide coverage. For example, property coverage may be harder to find in catastrophe-prone areas, or certain lines of coverage may not be readily available, such as commercial auto for transportation firms. Insurers who specialize in a niche, for example, excess liability, may reduce their footprint or leave that coverage area entirely.

With less insurer competition, available coverage becomes more costly.

So what can we do to tackle these challenges?

First and always, have proper risk management practices in your household to reduce your exposure.

Keep open communication with your trusted insurance advisor.

Document everything. Now is a great time to take an inventory video or photos of your personal property and the condition of your assets.

When it comes to your policies renewing, plan accordingly. Expect premium increases, expect longer than usual time to find coverages, and expect that there may be no other option available at this time.

Know that with Trailstone Insurance Group, your renewal goes through our 24-point Trailstone Renewal Assurance Certification process, TRAC for short. This is so you can have peace of mind knowing that you are in the right place and if we can find you a better option, we will let you know, every year.

If you are able to switch carriers, during a hard market, think carefully before making the change. Insurance carriers may decline to offer a policy to customers with short history with their prior carriers. Moving every 6 months or a year may increase your premiums in the long term.

Look for opportunities to save on cost in other ways if premium savings are not an option such as increasing your deductibles or self-insuring certain coverages.

If Trailstone is unable to find you savings this year, please don’t hesitate to reach out to us if you are open to exploring other cost-saving opportunities.

We are here to help!

You may be tempted to cut back on coverage or eliminate certain policies altogether. Please be careful! Doing so might create huge risks that could lead to serious financial hardship if you have a claim.

Here are some articles on the internet and from our website that may help with understanding.

Why Choose Trailstone Insurance?

You will be treated just as we would want to be treated.
Providing you with excellent service is our commitment to you, in all we do.
You are our most valuable asset.
We’re your Ramsey Trusted pro in multiple states.

Over 40 financially strong “A” Rated insurance carriers.
As an independent insurance Agency, we work for you… not the insurance company.
Self-Service technology is available for you if preferred.
Personal, commercial, and life insurance solutions in one place.

State of the Current Insurance Market