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The Hard Insurance Market: Seven Steps to a Successful Renewal

March 5, 2021

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.

Seven Steps to a Successful Renewal

  • Now is the time to put your risk manager (if you have one) to work.
    • Make time well outside your renewal period (ideally six months out) to meet with your insurance broker’s loss control consultant.
    • This will identify any issues that could negatively impact your risk profile and underwriting comfort with your business.
  • Work with your team and broker to ensure that claims are managed appropriately before renewal and any outstanding reserves are negotiated as favorably as possible.
    • Start by writing narratives around the larger claims to give the carrier’s underwriter a thorough understanding of what happened and how to ensure it doesn’t happen again.
  • Begin working on your next insurance renewal 180 days out or earlier, especially if your last renewal was challenging.
    • In some cases, an optimum renewal can even require beginning the planning process for the next year’s renewal immediately after the current year’s renewal is complete.
    • If you’re behind this timeline, you can still achieve a favorable outcome if you get to work as soon as possible.
  • Look at alternative risk financing strategies which allow you to rely less on insurance and more on risk management.
    • Evaluate higher deductible alternatives, retentions, and captive options.
  • Be strategic and thorough with your insurance purchasing process.
    • Simply “shopping your insurance” has proven ineffective.
    • Take a thorough and specific approach to position your business to the insurance marketplace as a “best-in-class risk.”
    • Provide the supporting information that speaks to your business’ true story to achieve the most competitive options available.
    • Cost is always important, but make sure you understand the terms, exclusions, and how your policy responds to emerging and management risks (cyber, social engineering, D&O, crime, etc.).
  • Coordinate guided calls/visits with underwriters to ensure they understand your risks and the true story around how you’re managing those risks.
    • This kind of information simply cannot be conveyed in a simple application.
    • The underwriter is largely responsible for pricing and selecting the terms of your insurance policy, so they should be included in your renewal process.
  • Drive the best competitive environment by using only one broker to access the marketplace.
    • This lets you leverage your incumbent carrier against the entire spectrum of carriers who will be competing to write your business.
    • Multiple brokers accessing the marketplace confuses the market, reduces underwriter desire to quote your business, and fragments the marketplace instead of driving to the highest competitive level.
    • Make sure to select a broker who has a process you’re comfortable with in accessing the market and selling your risk to underwriters.

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

For more information, please contact me directly or learn more on our Property & Casualty page.

Steve Carey
Risk Strategist, Property & Casualty


(Sources: PSA Financial, CDC – Distracted Driving)

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