Here's my read of the current marketplace for upcoming business insurance renewals:
Renewal Premiums: -5%
Renewal Coverages: Liberal Terms
Buyer's Outlook: Long-Term: Prices Flat
I have seen no real change in the insurance marketplace this month. I am, however, changing the premium part of the index to -5%. Since July I have shown "-5% to flat." I'm not convinced, in hindsight, that flat is really where the market has been / is. Competition still will push your premium down.
I was interviewed a few days ago for a business website. I said, "If an entrepreneur renews his insurance with the same agent and the same insurer with no "push-back," his renewal premiums will increase @5%. Renewing with the same agent/insurer with push-back will result in a slight reduction or a flat renewal. Competitive bidding will result in a 10 to 20% reduction in premium. The trick is how you manage the bid process."
I also talked about the magic of six words, "Is that really your best price?"
The writer expressed surprise that business insurance premiums are negotiable. They sure are. Most underwriters can increase or decrease base rates by 25%. That's a 50 point swing!
I have long said that a great deal of the discretionary part of premiums is dependent on how the insured appears to the underwriter. Is the insured an attractive risk? Does the agent present the account in a favorable way?
The insurance press continues to predict a soft market for the rest of this year. I agree. I am urging my bank clients to lock in the bond and directors' and officers' premiums for 3 years.
Prices will go up. The problem is predicting when. I do know that bringing competition into your renewal will improve your coverage and premium.
Renewal Premiums: -5%
Renewal Coverages: Liberal Terms
Buyer's Outlook: Long-Term: Prices Flat
I have seen no real change in the insurance marketplace this month. I am, however, changing the premium part of the index to -5%. Since July I have shown "-5% to flat." I'm not convinced, in hindsight, that flat is really where the market has been / is. Competition still will push your premium down.
I was interviewed a few days ago for a business website. I said, "If an entrepreneur renews his insurance with the same agent and the same insurer with no "push-back," his renewal premiums will increase @5%. Renewing with the same agent/insurer with push-back will result in a slight reduction or a flat renewal. Competitive bidding will result in a 10 to 20% reduction in premium. The trick is how you manage the bid process."
I also talked about the magic of six words, "Is that really your best price?"
The writer expressed surprise that business insurance premiums are negotiable. They sure are. Most underwriters can increase or decrease base rates by 25%. That's a 50 point swing!
I have long said that a great deal of the discretionary part of premiums is dependent on how the insured appears to the underwriter. Is the insured an attractive risk? Does the agent present the account in a favorable way?
The insurance press continues to predict a soft market for the rest of this year. I agree. I am urging my bank clients to lock in the bond and directors' and officers' premiums for 3 years.
Prices will go up. The problem is predicting when. I do know that bringing competition into your renewal will improve your coverage and premium.
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