Risk & Business Magazine JGS Insurance Risk & Business Magazine Spring 2018 - Page 3

Welcome! T wo thousand seventeen was a year for the record books. In addition to four Category 4 hurricanes making landfall on the United States and its territories (first time ever), California suffered from devastating wildfires that were the most destructive on record, destroying more than 1,381,405 acres. This included five of the twenty most destructive fires in the state’s history. We also dealt with massive floods and earthquakes, making 2017 out to be one of the worst loss years on record for the global reinsurance market. According to the recent Willis Re 1st View (January 1, 2018) reinsurance report, recent catastrophe loss estimates in the United States alone are in excess of $136 billion. Fortunately, traditional reinsurers were well-capitalized and strongly regulated so that they can absorb the historic losses, but many in the marketplace expect that reinsurers will try and recoup some of these losses by way of increased pricing in 2018. A majority of the losses in 2017 were property losses (in the $100 billion range), and this is where it is expected we will see the biggest rate increases in 2018. According to the report, here are some key price predictions for 2018: LETTER FROM THE PRESIDENT PROPERTY: Non-cat risks: Flat to +5% Cat-exposed risks: +10% to 20% Cat-exposed with losses: +20% to 25% CASUALTY: General liability: Flat to +3% Umbrella: Flat Workers comp: -2% to +2% Automobile: +3% to +8% Much of New Jersey is considered to be located in Cat-exposed areas (catastrophe exposed due to the coastal exposures). The biggest increases will be seen by those property-driven accounts with coastal exposures and that have bad loss ratios and claims experience, with rates increasing 20 to 25 percent and the possibility of reduced coverage. As of this writing, we are not experiencing these types of increases yet, but it will take some time for the market to correct. We do expect to see some increases by the end of the first quarter into the second. We also expect that the July 1 renewals and third and fourth quarter renewals to see the increases as many property reinsurance contracts will renew effective July 1. I bring this to your attention so that you can plan and properly adjust your budgets for insurance for the coming year. Here at JGS Insurance, we were very fortunate in December 2017 to be recognized once again as a finalist for the NJBIZ Business of the Year! We attended the celebratory dinner on December 4, 2017, and unfortunately did not win this year, but we are working hard to correct that in 2018. Congratulations to our team on a very successful year in the many ways we were recognized (Elite Agency, Insurance Journal Top 100, Top Specialist Broker, Top 250 Privately Held Company, and Business of the Year)! And thank you all for a successful year with our publication JGS Insurance Risk & Business! We are now entering our second year of publication, and we look forward to a great 2018! Sincerely, Vinnie Hager, President www.JGSINSURANCE.com 3