It’s a new year, and the world is certainly ready for some positive changes. While the future is hopeful, many of the economic challenges that started in 2020 are continuing to impact organizations in 2021. This includes a hard insurance market. As always, proactive business leaders find ways to overcome obstacles, deliver value, and maintain creativity as they navigate a changing and challenging environment. With so many new considerations related to a return to the workplace, it’s easy to see why insurance can get put on the back burner.
But as circumstances change and the market continues to harden, it’s time to dust off the old binder or open that neglected file and get to work on your insurance program.
Unfortunately, pandemic-related macro shifts and litigation trends have further impacted what is a tough placement when it comes to insurance. The market is quickly reacting to this as it continues to harden across all lines of coverage (except for workers’ compensation).
As PSA Financial explains, “A string of natural disasters and the residual effects of the economic downturn have been the main causes for this change in the insurance cycle from soft to hard market conditions.”
Pair this with an increase in wealth disparity, massive monetary jury verdicts, and general societal changes, and it’s not surprising that underwriters are tightening up their guidelines. As a result, some clients are receiving non-renewal letters. Others are seeing changes to their terms, and most are facing significantly higher prices. Adding to this, the CDC reports eight deaths per day due to distracted driving. As a net result of these factors, some of the most profitable accounts are leaving the traditional market in pursuit of alternative risk financing.
More than ever, it’s critical that business leaders take proactive steps to ensure the best possible outcome for their insurance terms and spend.
While there are plenty of distractions, challenges, and changes that organizations must deal with on a day-to-day (and sometimes minute-to-minute) basis, insurance and risk management must not fall to the wayside. Now that changes in terms and pricing is bringing insurance to the forefront, it’s critical to take a good look at where you stand—the sooner, the better.
You may not be able to change hard market conditions, but you can make sure you’re best positioned for a successful renewal in 2021.
This article originally appeared on www.finishandcoating.com.
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