3 Trends Creating Uncertainty in the Insurance Market, and Where Risk Managers Can Find Stability
This year, it seems that the only thing certain is uncertainty. The pandemic has thrown the world into a tailspin and left many companies hustling to adapt, often dramatically shifting their risk profiles in the process.
While COVID-19 undoubtedly occupies a large proportion of risk manager’s thoughts, it is not the only factor bringing volatility to the business landscape. The same trends driving a hardening insurance market over the past several years – namely, social inflation and increased natural catastrophe losses – continue unabated.
The convergence of these three factors has produced some instability in both property and casualty insurance markets. Carriers are seeking to make up for years of insufficient rate while limiting their exposure to these global risks. In some cases, carriers have exited challenging sectors altogether.
Insureds are left facing significantly higher premiums, limited capacity and curtailed terms and conditions at a time when they have an acute need for flexibility.
“Companies are finding it more difficult to obtain the capacity they need at a rate they can afford in the admitted marketplace, both for property and casualty risks,” said Tom Jurgens, Senior Vice President, E&S Brokerage Underwriting, Nationwide. “What they need now more than ever from the insurance market is stability.”
Here’s how three global trends are increasing insurance uncertainty for businesses, and where they can find the capacity and stability they’re looking for:
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