3/1/2023 Insurance Market Update

3/1/2023 Insurance Market Update3/1/2023 Insurance Market Update3/1/2023 Insurance Market Update

Owner/Operator Business Education On The Changing Insurance Landscape

3/1/2023 Insurance Market Update

3/1/2023 Insurance Market Update3/1/2023 Insurance Market Update3/1/2023 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

Owner/Operator and System Current Events (click here) 

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

Most Costly US Hurricanes

  • Ian in 2022, even when adjusted for inflation, is 2 times the cost of Hurricane Andrew


Billion Dollar Events

    Hurricane Events

    Wildfire Events

    Severe Storms/Tornado/Hail/etc.


Climate Reanalyzer

  • visualizing climate and weather datasets 

Historical Hurricane Tracks

Hurricane Statistics

Earthquakes

Earthquake and More

Latest News

Geopolitical News

Military and War News

Reinsurance News (Artemis)

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.  


Visit:  www.OtherCoveragesToConsider.com


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

EMP:   Electromagnetic Pulse

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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