State National Companies (SNC)’s Post

In this article written by Alex Wright for Risk & Insurance, he shares how inflation and supply chain issues are driving up replacement costs, causing many businesses to be underinsured. Inflation, spurred by factors like labor shortages and global conflicts, has significantly increased the cost of materials and repairs. Businesses also face higher costs from supply chain disruptions due to the pandemic and other global events. Construction material prices went up by 12.5% from 2021 to 2023, and vehicle repair costs surged by 23% in one year. Brokers and underwriters need to stay updated on these economic changes and communicate them to clients to prevent surprises and ensure proper coverage. Regularly reviewing and updating insurance policies and values is crucial for businesses to avoid financial risks. Read more: https://lnkd.in/gbfxAKBZ #Insurance #RiskManagement #Inflation #SupplyChain #Underinsurance #Construction #BusinessInsurance

The Excess & Surplus marketplace continued to grow in 2023, reaching nearly $100 billion in premium according to multiple estimates. 2024 is likely to continue the same trajectory. As the market continues to evolve, increased exposure will continue, especially surrounding accounts with Habitational, Liquor, Auto, and CAT Property exposure. Rising jury awards will also continue, supported by not only social and economic inflation, but third-party litigation funding that is roiling the market. Even with such churn, moderation can be expected to arrive in some sectors in 2024, as recently underscored by moderate January 1 reinsurance renewals and falling interest rates. Our latest Burns & Wilcox P&C Report, as contributed to by various subject matter experts, provides a forecast into the new year and depicts the role and value of surplus markets. Access these insights here: https://lnkd.in/ehBTrVfQ

Big thank you to Clyde & Co's Lizzie Whittingham and Chartered Insurance Institute for a great webinar on Claims Inflation today. Here are some key points: 🎈 Causes of Claims Inflation (Increased claims costs and expenses) 🇬🇧 Brexit - Specifically issues with supply chains 😷 COVID-19 Pandemic 💰 Cost of Living Crisis 🌐 Global Tensions and Conflicts - Increase cost of fuel & energy 🏡 The rise of Work From Home setups All of the above lead to an increase in underinsurance and in turn, this leads to further disputes 😡 which then lead to delays ⏱ in the claims process and poor outcomes for consumers. 📈 What do the stats say? - The McLarens Inflation Report shows a 20% increase to the cost of building repairs since pre-2020. - The ABI House Rebuilding Costs Index of June 2024, showed a 2.3% annual rise in material costs; specifically insulation, copper and wood. - RAC Fuel Watch showed wholesale fuel prices rose 88% form April 2020 to July 2022. - Commercial Property claims have fallen since 2020. - 🔥 Fire claims were the most common claim type pre 2020. - 💦 Escape of Water claims are now the most common claim type. Managing Risks & Claims Inflation - "Build Back Better" schemes to protect from ever increasing flood risks. - Ensure brokers are asking the right questions to policyholders at inception, in order to educate policyholders on risk management i.e. installation of CCTV, record keeping etc. - Always work on your fraud measures, to ensure minimal claims leakage due to increasingly inflated claims. #Insurance #CII #Webinar #BusinessInsurance #ClaimsInflation #Inflation #ClaimsManagement #Insurtech #InsuranceLaw #RiskManagement

Navigating this issue is getting more difficult by the year, and especially during the forecast of busiest named storm season in history. Have multiple properties and looking for strategies for your real estate portfolio for both commercial and residential? Let us know how we can help.

Stay informed about the changing dynamics of the property insurance market. Market cycle awareness and accurate risk assessment are essential for property owners to build resilience. https://lnkd.in/eEGZpW_T #InsuranceMarket #RiskAssessment

𝗖𝗹𝗶𝗲𝗻𝘁𝘀 𝘂𝘀𝗶𝗻𝗴 𝗮𝗹𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝘃𝗲 𝗿𝗶𝘀𝗸 𝘁𝗿𝗮𝗻𝘀𝗳𝗲𝗿 𝗮𝘀 𝗨𝗦 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗿𝗮𝘁𝗲𝘀 𝗿𝗶𝘀𝗲 𝟯% Amid rising rates, clients in the US continue to retain more risk using alternative risk transfer. Clients favour parametric, structured solutions and captives, according to Marsh’s Global Insurance Market Index. Property rates rose 3% in the fourth quarter of last year - the 25th consecutive quarter in which rates rose. Limited capacity, strong demand and rising reinsurance costs are driving rate rises. In UK, rates were flat. The exception was UK motor, with rises between 7% and 20% as insurers combat claims inflation. https://shorturl.at/svzM5

The 2023 net combined ratio for the property & casualty industry is forecast to be 103.8, according to the latest underwriting projections by actuaries at the Insurance Information Institute (Triple-I) and Milliman. The projection is worse than the 102.2 combined ratio predicted earlier this year, which is, in part, due to severe convective storm losses being the highest in decades, the report said. Also, hard markets continue with 2023 net written premium growth forecast at 8.3% Read the full article below! https://hubs.la/Q028w6Z40

Insights on Probable Maximum Loss (PML) ☄️ Probable Maximum Loss (PML) 📉 refers to the maximum loss an insurer anticipates in the event of a claim on a policy. This term is commonly associated with property insurance policies, such as those covering fire or flood risks. 🔥💧 Importance of PML: Understanding PML is crucial for insurers as it represents the worst-case scenario they might face. It helps insurers assess potential financial liabilities and ensures they have adequate funds to cover potential losses. PML plays a vital role in shaping insurance policies and determining appropriate premiums. 💼💰 Example Illustration: Consider an insurance company underwriting a fire policy for a small business. Through modeling and risk assessment, the insurer calculates the PML for this policy to be $150,000. This means that in the worst-case scenario, where the small business's building is completely destroyed by fire, the insurer would expect a maximum payout of $150,000. 🏢🔥💸 In essence, PML acts as a financial benchmark, guiding insurers in managing underwriting risks, setting premiums, and maintaining financial stability. 📊👩💼 #BusinessInsurance #RiskManagement #InsuranceInsights 🌐✨

Price increases, record losses, insurance to value adequacy and supply chain hurdles are just some of the ever-evolving dynamics in the commercial property industry. HUB’s Property Practice leverages its deep industry knowledge and risk assessment expertise to create a tailored, yet comprehensive strategy for clients, applying both traditional and alternative risk solutions. Learn more: https://ow.ly/AqJw50QrR4l #Property #Insurance #CommercialPropertyInsurance

Price increases, record losses, insurance to value adequacy and supply chain hurdles are just some of the ever-evolving dynamics in the commercial property industry. HUB’s Property Practice leverages its deep industry knowledge and risk assessment expertise to create a tailored, yet comprehensive strategy for clients, applying both traditional and alternative risk solutions. Learn more: https://ow.ly/5t7W50Qsc4n #Property #Insurance #CommercialPropertyInsurance