Economic turmoil, shifting workforce dynamics, extreme weather events, geopolitical unrest, and a litigious environment – if there is anything organizations and individuals have come to expect in recent memory, it is the unexpected. With volatility shaping current events and becoming the new normal, now more than ever before, we all need to think about how we plan for the unplanned.
Just like everyone else, insurance companies are also having to grapple with and adapt to the events that are transforming the world. In 2023, a shifting property and casualty (P&C) insurance and employee benefits marketplace continues to shape coverage terms, deductibles, and premiums in ways that impact organizations’ and individuals’ financial resiliency and ability to withstand ongoing instability. In the employee benefits landscape, employers continue to feel the financial pressures of balancing skyrocketing healthcare costs with employees’ benefits expectations.
In this State of the Market report, we discuss the challenges and trends impacting businesses, individuals, and the insurance industry, and explore emerging trends and risks while highlighting strategies and solutions that can help you mitigate risk and achieve your goals.
Commercial Risk
In the commercial risk space, some market segments and industries are still seeing hardened conditions as a result of continued underwriting losses. This means that carrier capacity is diminished, insurers are retracting from riskier markets, premiums are higher, and underwriting scrutiny is heightened. Fortunately, other market segments have begun to soften, with rate increases still present but moderating. Through 2023, it is likely that insurance carriers will remain disciplined in the underwriting process for all markets.
Employee Benefits
For employee benefits, in an evolving employment landscape, every year it seems that employees expect more perks and benefits, and employers have had to find strategies to contain these costs in light of inflationary pressures. With necessity being the mother of invention, in 2023 we are seeing more employers leverage cost containment strategies and technological advancements to offer benefits that keep employees satisfied while reining in the costs.
Private Client
Much like the commercial P&C marketplace, the private client insurance market remains tight. Carriers’ risk appetites have changed in a continued hardened market, with the property market being particularly challenged. More carriers are leaving disaster-prone areas, leaving thousands of homeowners unprotected from the destruction of natural disasters.
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Ultimately, the availability, rates, and terms of coverage for insureds will vary greatly by insurance line, loss history, geographic location, and implementation of loss prevention. Businesses and individuals with a preferred risk profile that have a good loss history and an ability to demonstrate how they can recover from triggering events will be strongly positioned to get the best rates and terms. Continuing to face upward rate pressure will be those with poor risk profiles, exposures to natural catastrophes, losses, and large industry-specific exposures.
There is no doubt that the current socioeconomic environment and insurance marketplace conditions have posed significant challenges. However, risk exists, even in times of economic prosperity. For any business and person, the ability to pivot and manage risk in the present and as it evolves is crucial for long-term profitability, stability, and success.
Now is the time to think about how your exposures can affect your goals and which actions you can take to manage them for a positive outcome. You might have to reimagine certain processes or restructure your operations so that you are able to not only get better terms for insurance coverage, but also stabilize, overcome ongoing uncertainty, and capitalize on opportunities as they become available. And even if you have experienced losses and have a challenging risk profile, there are steps you can take to help you rebound.
No matter what the current state of the market may be, BRP’s Advisor and Client Experience teams are focused on delivering the best results for your risk profile and operational DNA. Though a challenging insurance market and economy highlight the importance of working with the right broker, a strong broker relationship provides benefits that are valuable for you at any given time. Our Commercial Risk, Employee Benefits, and Private Risk advisors come to you with specialized expertise of both insurance and a wide array of industries, and are here to provide personalized, innovative, and sound recommendations that can help you transform challenges into opportunities.
