Industry experts have issued stark warnings to North American commercial buyers about the coming years. Insurance broker Willis Towers Watson recently released their 2020 Insurance Marketplace Realities Report. This report brought a number of issues into sharp focus.
It’s a sellers market that buyers are stuck square in the middle of. As a result, experts no less than 19 different lines to see price increases over the next year. Of those lines, the most notable include property and umbrella.
Joe Peiser, global head of Broking, Willis Towers Watson spoke with the Insurance Journal about these forecasts. “We’re seeing the biggest upward price shift in years. We expect rate hikes and capacity constrictions will continue throughout 2020 and likely into 2021, but a more orderly market to emerge by mid-2020,” said Peiser.
There are a lot of factors that lead to a firming market, like the one we see currently. Low interest rates have hurt investment portfolios. Worsening extreme weather events have led to sustained escalation rates of commercial property lines. Self-driving cars have led auto liability to continue be unprofitable for both commercial and personal insurers. Cyber is becoming increasingly important, which means increasingly expensive.
All of this is to say that insurance hikes are on the horizon. “There’s work to be done in the short run to avoid the worst of the rate hikes,” Peiser adds. “Buyers should allot plenty of time to work with their advisers, provide robust risk information to potential risk takers, consider options across the global marketplace and take advantage of analytic tools. They should also continue to invest in risk control measures. The cheapest loss is the one avoided.”
As a consumer, it’s important to stay informed and work with your insurer to make sure your policies are up to date. To learn more about your current policies, or to see what your options for an entirely new policy are, reach out to TGS Insurance at www.tgsinsurance.com.