The Hard Market
Dana Coates
Strategic Partnerships

Just like the weather changes from sunny to stormy, the insurance world also goes through its own sunny and stormy seasons. These ups and downs in the insurance world usually last between two and seven years.

Right now, after the challenges brought by the pandemic and as of the end of 2023, we're in a stormy period for personal insurance like home and car policies, and it’s getting a rough for business insurance too. However, things are still pretty calm for workers’ comp and employee benefits. But this may change in the next 12 months.

So, what do we mean by 'stormy' and 'calm' periods in insurance?

During calm times in insurance:

- Costs for insurance are lower, which is great for your wallet.

- You get more bang for your buck with broader coverage.

- It's easier to get insurance because insurance carrier gatekeepers aren't as strict.

- Insurance companies can offer more policies and better terms because they’re doing well financially.

- There’s a lot of competition among insurance companies, which can lead to better deals for families like yours.

- This is true for business insurance buyers too.

On the other hand, during stormy times:

- Insurance costs more.

- Insurance companies rely more on what’s called reinsurance to help manage their risks, which can drive costs up.

- It's tougher to get insurance because companies are more careful about who they cover.

- There are fewer insurance options available, and what is available can be pricier.

- You might find fewer brokers who can help you navigate these tougher conditions.

Why are we in a stormy period now? Well, a bunch of natural disasters and worries about the economy have made insurance companies more cautious. And the insurance that insurance carriers buy to hedge their bets, called reinsurance, has become super pricy. This has been fueled by climate and natural disasters around the globe, as well as the skyrocketing costs of court settlements.

So, what can you do to make this stormy phase a bit easier for your family?

- It’s smart to be ready for some price increases, but there are ways to manage them. For example, you can focus on being safe at home—watch out when cooking and remind your teenage drivers to be extra careful. If unsure, opting for a ride from services like Uber might be safer.

- Get involved in managing the risks your family faces, just like how businesses do. Simple steps can help a lot.

- Start thinking about your insurance renewal about 60 days early and ask your agent to shop for you.

- Keep a good eye on your finances and make sure you keep up with payments since insurance companies might check credit scores  more closely during stormy periods.

We at UWIB are here to help you navigate through these challenging times, supporting your business and your family to grow and thrive despite the bumps.