Looking Ahead to What’s in Store
for the Insurance Market
December 10, 2012 – Orange County, California
Over the years, those of us that have been in the industry longer than ten years have experienced both a hard insurance market, and, over the recent five to six years, a soft market. In the early years, from around 2002 to mid-to-late 2006, the market was hard, business was humming along, there was a shortage of qualified labor, and general liability was higher than it was in the years 2007 to mid year 2012. Over these past 5 years, commercial insurance rates dropped anywhere from 40% to 50%, and, in some classes, it may have dropped even more. Over the past couple of months, and in talking with several underwriters from various insurance companies, the tide is starting to turn and rates are trending higher. Most of the increases in rates are in the 5 to 8 percent range, but some classes are seeing a rate increase as much as 15+ percent. Another factor affecting rates are insurers’ decisions to no longer provide insurance for certain classes of risks. This is very evident in the construction field. Many carriers are no longer insuring these classes, and that, alone, will contribute to higher rates. Also evident is that certain coverages that were once included in the previous policies are now, either added with an additional premium charge, or those coverages are no longer offered in many cases.