3/1/2023 Insurance Market Update
Owner/Operator Business Education On The Changing Insurance Landscape
3/1/2023 Insurance Market Update
Owner/Operator Business Education On The Changing Insurance Landscape
IN THE BUSINESS OF HELPING OTHERS
The world is changing and we are here to help you with your upcoming insurance renewal(s).
Whether a client or not, we are here to help!
Please reach out no matter your situation or status - we will do our best to help you and your business.
PURPOSE
Overview
The purpose of this web site is for our clients to have one location with information to help them plan for 2023 and beyond related to insurance in an unprecedented time period. We started this web site in September 2022 and will update it daily through 3/1/2023.
Current Events
We Need Your Help
If you have additional questions, please contact your Dedicated Client Manager with that feedback or information so we can update this web site for the benefit of the entire system.
NEWS - INSURANCE MARKET
Macro Impacts on Rising Premium
PROPERTY
Inflation
- property values have increased and most claim values have increased too
- social inflation has also added to costs
Supply Change and Labor Shortages
- it takes longer to rebuild and open after events increasing losses
Interest Rates
- capital/money leaving insurance and going to alternative places of higher yield
- premium finance rates follow interest rates which have nearly doubled this year
- US currency appreciation / exchange rates
Losses/Claims
- 5 years of losses in the insurance industry - even before Hurricane Ian
Global Catastrophes
- learn more here - last year was 76 percent above the 21st century average
- Ian in 2022, even when adjusted for inflation, is 2+ times the cost of Hurricane Andrew
- Turkey/Syria Earthquake
- Much more...Top 10 Here
Climate
- climate changes have created a new normal of higher cost events
Density
- areas continue to grow in density so when events happen, they cost more
LIABILITY
Judicial/Liability Hot Spots
- See States and Areas - click here
- Florida specific
Litigation/Attorney Fees
- Florida among other States
Nuclear Verdicts
- Learn more here (Florida California, New York, Texas, and More)
"Insurance Capacity"
- This is a very important term you will hear in 2023 as the availability of property insurance (especially after 1/1) tightened dramatically due to multiple unprecedented events above happening in parallel.
- The “capacity” is indicated to be down by perhaps 50% in Coastal States and less in other States. Capacity is like availability. Meaning, if 50% of homes, gas, eggs, milk, etc. are not available, then people would either pay very high prices for what is available (supply/demand) OR they would go without these items. In insurance, those that can self-insure might choose this option. For example, if you have a home with no loans, you could choose to not carry certain insurance. However, your restaurants require insurance and at certain coverage limits determined by others. As a result, you will fight for what insurance is in the market at a higher price.
- The way insurance companies will navigate this first is to simply non-renew policies most at risk for claims or that have had claims. After this, then they will determine higher pricing for remaining accounts knowing that some will then not renew due to cost.
- The current market conditions have not been seen since after 9/11 and in the 1980’s, but obviously we have much more to insure now than we did back then.
US Weather Events and Data Tools
- Ian in 2022, even when adjusted for inflation, is 2 times the cost of Hurricane Andrew
Severe Storms/Tornado/Hail/etc.
- visualizing climate and weather datasets
Earthquakes
Latest News
Florida Property Insurance News
Turkey hit by M7.8 earthquake - 6 Feb. 2023
Renewals See Hardest Property-Catastrophe Insurance Rates in a Generation - 23 - Jan. 2023
Florida Homeowners Insurance Expected To Average 40% Increase - 19 - Jan. 2023
- we are personally hearing of non-renewals and 100% increases as a norm
Property insurance rates to keep surging in 2023 - 10 Jan. 2023
Catastrophe exposed rates continuing to rise fast - 9 Jan. 2023
Rates now 165% higher than 2017 lows - 4 Jan. 2023
No ILS capital coming to the rescue - Steve Evans | 20 Dec. 2022
Attachment doubling, US renewals close with holes - 20 Dec. 2022
Florida Property Surplus Down 23%, Loss Ratio at 147% - Steve Evans | 12 Dec. 2022
Hurricane Ian's influence will be felt by all - Steve Evans (Swiss Re) | 9 Dec. 2022
50%+ rate rise for US Property Reinsurance - Steve Evans (Goldman Sachs) | 8 Dec. 2022
Hard insurance market will spell end for many - Fiona Robertson | 6 Dec. 2022
Inflation will make 1/1 reinsurance renewals challenging - Market Insight | 6 December 2022
Grim picture for January 1 property reinsurance renewals - Bethan Moorcraft | 30 Sept. 2022
Frequently Asked Questions (FAQ)
The Property Insurance market has changed dramatically and will impact all US Owner/Operators renewal premiums. As an example, only 2 of the 5 property insurance options offered to you in 2022 will be back in the system in 2023.
Besides your claims/losses, premium are also driven by your Property Values and Sales. Even if rates were flat/same in a given year, if your Restaurants Building/Contents are worth more vs. last year and/or your Sales have risen, then you should expect that minimum % increase in your premium.
For example, lets' use your homeowners insurance as many understand this best. If
your homes value goes up 10% in a given year and thus you increased the value of
your home with your insurance company by 10%, your homeowners premium would
rise at least 10%.
Longevity of the broker and their respective insurance companies/markets is important. Leaving a long-term partner has left many over the years in tough positions. How long a Property insurance company has been supporting Owner/Operators is a great indicator of a programs abilities within the insurance marketplace and their long-term value to Owner/Operators. Remember, more than half of the brokers will be presenting a brand new insurance company/market this year.
NOIT Glossary:
Click Here or visit https://noit.com/resources/glossary/
Other Terms:
ALS: Actual Loss Sustained
BI: Bodily Injury Read More
BI Coverage: Business Interruption Coverage Read More
BINDER: A legal agreement issued by either an agent or an insurer to provide temporary evidence of insurance until a policy can be issued. Read Full Definition
CAPACITY (insurance): The largest amount of insurance/reinsurance available from a given insurance company/market. Learn More
D&O: Directors and Officers
EPLI: Employment Practices Liability Insurance
EPRMA: Employment Practices Risk Management Association
FIP: Florida Insurance Program
GL: General Liability
NOIT: National Operators Insurance Team
ORMA: Owners Risk Management Association
PML: Probable Maximum Loss Read Full Definition
PUBLIC ADJUSTER: https://noit.com/resources/report-a-claim/#PublicAdjustersFAQ
TIV: Total Insured Value (which usually includes Building, Contents, and Business Interruption)
TLPG: Tort Litigation Practice Group
Annual Insurance Timeline
Owner/Operator
Loss Prevention Review
- mid-year reviews, making your business a lower risk
Review Claims/Losses (at least monthly)
- managing claims is important as those with the lowest claims, usually get the best rates
Plan/Budget for 2023
Submit Insurance Application
- 2/1 thru 2/21
Receives Insurance Proposal(s)
Reviews Proposal With Agent
Renews with Approved Broker
Approved Broker
Begin Working on the 2023 Renewal
- 4/1/2022 thru 2/1/2023
Partner With Clients Throughout the Year
Corp. Approval Process (Property/General Liability Only)
- Required Corp. Meetings (In-Person Chicago) with all Brokers and Insurers
- Corp. Provides New Broker and Insurer Agreements (Early-October) - 11/18
- Brokers Finalize Insurance Markets
- solutions must meet or exceed draft insurer agreement requirement
- Brokers Submit To Corp. Required Approval Items (Mid-October) - 12/2
- Corp. Approval of Broker/Insurers (Early-November) - 12/24 (est.)
- Execute/sign of all Annual Agreements (Mid-November) - 12/24 (est.)
- Brokers provided high-level email on the renewal (November) - 12/21
- Brokers provided full renewal terms for: - 12/22
Umbrella, D&O, EPLI, Cyber, and Earthquake
- Brokers provide other required items to Corp. by January 1
Final Negotiation of Terms, Options, Other Coverages, and Premiums
Clients Updated On Renewal, Expectations, etc.
Update Application Process, Rate, Quote Systems with the latest information, taxes, etc.
Begin Sending Proposals
- revise/correct proposals as needed <- System Is Here
- continued premium negotiations with insurance markets/companies <- System Is Here
- 2/15-2/17 Final Underwriting/Pricing Meetings with Markets
Bind Coverages / Send Confirmations of Coverage to Owner/Operators
Collect Deposits/Premiums and Remaining Paperwork
Brokers Receive Policies
Broker Reviews Policies
Broker Sends Policies to Owner/Operators
Copyright © 2022 Besnard Insurance LLC and Dean Villella Agency - All Rights Reserved.
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