Arnold, Bruce & Doerfler Insurance Blog
2019 is a year full of hardships and challenges for commercial insurance. The recent surge of natural calamities and aviation losses lead to diminishing profits and rising premium rates across numerous insurance product lines. Here are some of the most impacted areas, and where you can expect rate increases.
Rate increases in aviation insurance increased from 10% to 25%, and its impact is not limited to manufacturers and operators of aircraft. The rate increases are also expected to have a secondary trickle effect on companies involved in the industry. For example, if you are a food-service provider of an airline company, then you are affected as well.
The Boeing 737 MAX passenger plane crashes of Lion Air and Ethiopian airlines, as well as the grounding of said models from aviation authorities not only in the U.S but all over the world, contributed to the rate hikes.
According to the mid-year report published by USI insurance services, natural catastrophes, such as bushfires and hurricanes have caused property losses upwards of $80 billion in 2018. Depending on the category, property insurance rates are rising by 10% to more than 40%
Insurance companies are reducing their natural calamity limits as their way to drive rates and manage exposure to risk. This change also impacts sub-limits and retentions and elevates risk selection as an essential part of the risk transfer process.
Primary General and Excess Liability
Multiple high jury verdicts and soft markets drive the cost of liability insurance, creating an ecosystem where liabilities cannot be recovered by premium rates, resulting in inadequate or insufficient return for some insurance companies.
With insurers reducing term limits and thresholds from an average of $25 million to $15 million with no corresponding rate decreases, then the problem gets exacerbated. In other words, the premium for a $25-million lead is now the same as the premium for a $15-million lead.
Commercial Auto Liability
High-tech cars, as well as the prevalence of distracted or bad drivers, drive the costs of auto insurance up. There is so much technology packed in a car than ever before. Now, when a car bumper is hit, you are not just fixing a plastic bumper. You have cameras, wiring, and other minute components to be attached, so damages, and verdicts, in turn, are greater than in the past.
Rate hikes can be combated by working with insurers for a long time and ensuring you present the best and most factual data as possible. When your story and data points hit the mark, then you will get the best conditions and coverage. Obtain commercial insurance now, to reap the benefits it offers.
At Arnold, Bruce & Doerfler Insurance, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (503) 222-1951 or Click Here to request a free quote.
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