Commercial insurance premium renewal rates increased in the mid-single digits for most lines in November, said insurance exchange Ivans Insurance Services. Last week you were reading How Can Insurers Tap Into The Black Friday Consumer Culture? This week we’re bringing you:
Heading Into 2022, P/C Insurers Face ‘Massive’ Political Risks, Economic Uncertainty*
Property/casualty insurers head into 2022 facing “massive” political risks, an expert with the Insurance Information Institute said on Dec. 2. Economic uncertainty will also continue despite recovery trends.
Some exist due to post-pandemic economic fallout, but many others are longstanding or worsening flashpoints in the U.S. and around the globe, noted Michel Leonard, vice president, senior economist and data scientist, and Head of the Economics and Analytics Department at III. He spoke during the III Joint Industry Forum 2021 in New York City.
Those risks, when listed together, are substantial. In the U.S., they include labor dislocation and the midterm elections, the continued institutional deadlock in Congress, worsening socioeconomic inequality and far right domestic radicalization. In the U.S. and around the world, these risks encompass anti-vax radicalization relating to the COVID-19 vaccines, far-left industrial sabotage relating to fossil fuels, and conflict with China over Taiwan and Hong Kong. Other flashpoint risks remain or are worsening in North Korea, Ukraine, Belarus, Latvia, India, China and Pakistan, Leonard noted.
Beyond that, there are also risks involving weaponized trade policies, state-sponsored cyber terrorism and warfare, and risks involving state and non-state interference in elections both in the U.S. and abroad.
Tackling the silent assassin of the liability insurance world*
Social inflation is a silent assassin in the insurance world. It is blamed for driving up loss costs, especially in long-tail and casualty lines, and, as such, is deemed a major contributor to the hard market conditions that are causing challenges for (re)insurers, intermediaries, and insurance buyers worldwide.
The term social inflation is somewhat ambiguous. It means different things to different people. In fact, many insurance professionals are still in the camp of: ‘Social inflation – what’s that?’ As a phrase, it’s best known in the United States, but the factors of loss frequency and severity in liability lines are prevalent worldwide – even if insurance professionals don’t wrap those trends up in the blanket term of social inflation.
After multiple interviews on the subject, I understand social inflation as a term used by insurers to describe the rising costs of insurance claims resulting from things like increasing litigation, broader definitions of liability, more plaintiff-friendly legal decisions, and larger compensatory jury awards.
The Insurance Information Institute, which is a leading source of data-driven insights and information on insurance in the United States, says: “Social inflation is an important issue to understand, as it has a direct effect on claims-related losses and insurance costs, especially for businesses. The term refers to rising litigation costs and their impact on insurers’ claim payouts, loss ratios and, ultimately, how much policyholders pay for coverage.”
Insurance premium renewal rates continue to rise*
Commercial insurance premium renewal rates increased in the mid-single digits for most lines in November, insurance exchange Ivans Insurance Services, a division of Tampa, Florida-based Applied Systems Inc., said Tuesday.
Commercial property saw the highest average rate increases at 5.77%, but that was down from 5.93% in October. Umbrella rates increases of 4.97% were also down slightly from the prior month.
Several other lines saw a slight uptick in rate hikes. Business owners policy rates increased 5.74%, up from 5.24% in October; commercial auto rose 4.89%, compared with 4.64%; and general liability rose 4.27%, up from 4.18%.
Finding highly affordable leads to keep sales coming in
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