THE MARKET
What If In A Hard Market , We Persevere With Hard Optimism ?
BY : LAURA DEELEY BREN , CIC , ASLI PRESIDENT
The year 2022 introduced significant volatility into the insurance market : war , fractured energy markets , 40-year-high inflation , interest rate hikes , depleted capital , and Hurricane Ian , the second-most expensive U . S . natural disaster ever . This begins to explain the current hard market , which is part of a cyclical condition .
In a hard market , insurance availability decreases , coverage terms tighten , and premiums increase . It ’ s like running into the headwinds . You ’ re moving forward , but it takes persistence , energy , and a keep-going mentality .
Depending on the type of business you have , you ’ ve probably been hearing about the hard market and may be asking : What if my coverage will no longer “ cover it ”? What if a cost increase cuts into profitability ? Can I afford to buy the same insurance I had before ? Will I need to make changes to how I spend my insurance premium dollars ?
We ’ re here to tell you that although the hard market is real , this too shall pass . Working through this cycle forces innovation and collaboration , and we recognize the value of relationships and coming together to get the job done .
Our goal is to be thorough and creative in our marketing approach and keep you informed along the way . Our crew thinks way outside the box to get the best solution possible . Together , we ’ ll draw on all our connections at renewal time . Let ’ s walk through some questions you may have on your mind .
WHY IS CAT PROPERTY INSURANCE SO TOUGH ?
It can feel like the world is becoming a riskier place to live , work , and play . But this is nothing new . The environment is always changing , and with change comes challenges and then creativity as we navigate tough times to find fresh solutions .
The catastrophic event ( CAT ) property insurance market we are experiencing is in uncharted territory . CAT deductibles are different from traditional property insurance as they apply to specific perils : named storm , hurricane , flood , and earthquake . CAT property coverage allows us to insure coastal properties that are considered high-risk for most traditional insurance carriers .
Since 1929 , Deeley Insurance Group has been committed to commercial coastal property , and we have developed deep expertise in this complex insurance space . For over 40 years , we have maintained direct relationships with Lloyds of London — a unique market expertise for a retail agent — to help us place this CAT coverage for our coastal community .
WHAT IS GOING ON WITH THE REINSURANCE MARKET ?
Reinsurance is basically insurance for insurance carriers — when an insurer transfers all or part of a risk to another insurer to support them in the risks they are taking .
Hurricane Ian played a significant role in hardening the reinsurance market . When Ian made landfall in Florida , demand for reinsurance escalated for CAT property insurance and capital providers that support reinsurers pulled back .
With approximately half of the U . S . CAT property reinsurance renewals renewing in January , the market changed greatly at the beginning of this year . Insurance carriers looked closely at their portfolios and made tough decisions about how they would deploy their capacity , what protection their reinsurance would still provide , and many made big changes . The cost of that reinsurance they bought in January increased by approximately 50 %.
Again , going back to innovation and relationships , a hard market requires careful navigation , which is possible when you partner with advisors you trust . At Deeley Insurance Group , we also rely on our trusted carrier partners including specialty insurer Michael Egan , program director at NSM Insurance Group , who has worked in the property insurance market for 34 years .
“ The important message is to take a long-term approach to your insurance ,” he says , “ and entrust in an insurance partner who is doing more than dropping off a policy . Take care of properties and do preventive maintenance to avoid losses . Being a good insured is the best way to protect yourself from the ups and downs of the market .”
How do we approach the hard market ? Our answer : Hard Optimism . We ’ ll find a solution . We ’ ve got your back . +
Ask The Questions
• Why are insurance carriers increasing property values ?
• What updates and repairs can you make to the property to help prevent losses ?
• How is your insurance agent proactively addressing potential premium hikes and helping you understand the cyclical market so you can ride it out together ?
Laura Deeley Bren is a principal of Deeley Insurance Group and a second generation insurance agent . With over 20 years of insurance and leadership experience , Laura devotes her time to developing the vision for the firm and working closely with her team to make it a reality . Laura is a Director for the Bank of Delmarva . Laura resides in Ocean City , MD and can be found surfing or boating with her husband and 2 sons . 410.213.5567 • Ibren @ deeleyinsurance . com
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