7/17 Panel Recap & Financial Insights

This blog serves as a recap of the virtual event hosted on July 17, 2024. Watch the full replay here: Seubert Financial Panel

Navigating the Hard Insurance Market of Summer 2024: Insights from Seubert’s Quarterly Panel Discussion

Stepping into summer 2024, the insurance landscape continues to present challenges and opportunities for businesses across the board. Recently, Seubert hosted its quarterly panel discussion, where industry leaders gathered to delve deep into the nuances of the current hard insurance market. Led by Richard Mansfield, CPA, Seubert’s Chief Financial Officer & Chief Operating Officer, Tyler Lyster, CPCU, ARM-E, AINS, Vice President of Operations with nearly ten years of insurance brokerage experience, and Kristie Lulich, CIC, CRM, CRIS, MLIS, TRIP, ERIS, Director of Commercial Operations, boasting almost two decades in the field.

 

Understanding the Hard Market

The session kicked off with an exploration of what defines a hard insurance market, outlined by Tyler. In essence, a hard market is akin to a “seller’s market” where premiums rise, coverage terms tighten, and capacity decreases. This contrasts sharply with the more favorable conditions of a soft market characterized by stable or decreasing premiums, broader coverage terms, and increased insurer competition.

“We’ve been in the current hard market since 2019,” Tyler explained, “following a prolonged period of stability post-September 11. While we’ve seen some easing in certain coverage areas in 2023, the overall market remains challenging.”

 

Contributors to this hardening included catastrophic losses from floods, hurricanes, and wildfires, as well as poor underwriting profits, low investment returns due to historic interest rate lows, and the societal impact of rising claims and lawsuits—a phenomenon known as social inflation.

 

Impact on Renewals & Market Expectations

Kristie then broke down the specific impacts on various insurance segments, from commercial property to cyber and general liability. For instance, commercial property rates have surged by double digits due to natural disasters and inflation, while commercial auto faces hikes fueled by driver shortages and escalating repair costs.

“Cyber insurance, though volatile, shows signs of stabilizing,” Kristie noted, “as insurers adapt to evolving technology and threats.”

 

Risk Mitigation & Cost Control Strategies

The panel concluded by focusing on proactive risk management strategies amidst these challenges. Kristie emphasized the importance of a robust risk management plan to mitigate losses and secure favorable insurance terms. Key components included the following:

1. Identify your individual organization’s exposures or potential cost drivers.
2. Evaluate the best loss control solutions that match your individual risk appetite.
3. Create a business continuity plan to account for disasters and unpredictable risks.
4. Build and upkeep a corporate culture focused on personal and workplace safety.
5. Proactively avoid claims, but if they do occur, have a plan to efficiently manage and minimize costs.
6. Working alongside an experienced insurance broker to create a customized insurance program.

Tyler expanded on innovative risk financing options, such as captive insurance programs and increased deductible plans, designed to give businesses greater control over their insurance costs and coverages.

“Captives and self-insurance can be game changers for businesses with predictable risk profiles,” Tyler explained, “offering an exit from the standard market and greater financial flexibility.”

 

Key Takeaways & Final Thoughts

As the discussion ended, Richard underscored the importance of proactive engagement with insurance brokers and continuous evaluation of risk management strategies. Whether through optimizing insurance structures or exploring alternative risk financing, businesses were encouraged to stay agile and informed in navigating the ongoing challenges of the hard market.

“Be very proactive with your current broker in having these types of discussions, pre-planning meetings, evaluating alternative solutions, etc.” Richard advises, “making you less susceptible to hard market conditions and ultimately taking risk management into your own hands.”

This Seubert quarterly panel discussion provided a comprehensive overview of the summer 2024 insurance landscape, highlighting both the complexities and opportunities facing businesses today. As we move forward, adapting to these market conditions with foresight and innovation will be crucial in ensuring resilience and sustainability.

Informed decision-making and proactive risk management remain powerful tools in mitigating the impact of a hard insurance market. Stay tuned for more insights as we continue to navigate this dynamic environment together. If you’d like to take a closer look at the strategies Seubert could implement to help your business Minimize Risk. Maximize Potential. Get in touch today! You can also sign up to hear about future events by completing this form.

 

Richard Mansfield | Chief Financial Officer & Chief Operating Officer
[email protected] | 412-223-1417 | connect on LinkedIn

Kristie Lulich | Director of Commercial Operations
[email protected] | 412-223-1424 | connect on LinkedIn

Tyler Lyster | Vice President of Operations
[email protected] | 412-223-1451 | connect on LinkedIn