Risk & Business Magazine General Insurance Service - Page 28

HARD MARKET

How To Control Insurance Costs In A Hardening Market

BY NICOLE GARZA

The past few years have been challenging for both businesses and the insurance industry . After years of stability , many factors have led insurance companies to reevaluate their positions in the market . The increased frequency and severity of claims , social inflation , the COVID-19 pandemic , medical inflation , trends in cybercrime , the cost of reinsurance , natural disasters , and investment returns have all fundamentally reshaped the insurance market as we know it leading us into a hard insurance market . In the second half of 2021 , we saw a gradual softening of the insurance market for certain lines of coverage revealing positive indicators for businesses .

Going into 2022 , we expect a challenging insurance environment to remain but one that will look better than 2021 for many insurance buyers . However , there are a number of exceptions . Now more than ever , it ’ s essential for businesses to take a proactive approach to their risk management efforts and securing adequate insurance coverage . Although we are amid an insurance and risk environment with many unknowns , businesses should focus on addressing the factors they can influence .
One question often asked by business owners is “ Why did my premium go up ?” Many factors contribute to insurance pricing , but the following are common contributors to the current hardening market :
• Catastrophic losses such as floods , hurricanes , wildfires , and
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