Insurance Industry Updates

IMPORTANT UPDATES 
 

We hope this newsletter finds you in good health and high spirits. In recent years, the personal lines property and casualty insurance market has been impacted and is still undergoing significant changes. Not nearly as much though as it has in the last 6 months. From the increasing frequency of major loss events such as wildfires, hail and wind storms, to inflation affecting rebuild costs, our industry is facing unprecedented challenges. In this letter, we aim to shed light on the evolving insurance landscape and provide insights into what you can expect in the near future.

  1. Rising Frequency of Major Loss Events

The insurance industry has always dealt with natural disasters, but recent years have seen a surge in the frequency and severity of these events. Wildfires, hailstorms, windstorms, and flooding are occurring more often than ever before. Climate change, urban development in high-risk areas, and various other factors have contributed to this concerning trend. As a result, insurance carriers have experienced losses that surpass any previous projections.

  1. Inflation’s Impact on Rebuild Costs

Inflation isn’t limited to everyday expenses; it’s also affecting the cost of rebuilding homes and repairing damages. The rising prices of construction materials, labor, and other factors have led to increased costs for insurers when it comes to settling claims. These inflated rebuild costs are a significant concern for both insurance companies and policyholders.

Even more so felt on the auto side where cost of vehicles, their repairs and the frequency of liability (lawsuit) loss are up tremendously.

What Does This Mean for You?

As the personal lines P&C insurance market faces unprecedented challenges, it’s essential to understand how these changes will impact both the insurance market as a whole and you, our valued clients. Some of the effects we can anticipate:

  1. Rate Increases:

 The increase in major loss events and rising rebuild costs will result in rate adjustments. Clients can expect higher premiums, especially for properties located in high-risk areas. It’s crucial to prepare for potential increases in your insurance costs and budget accordingly.

  1. Less Carrier Availability in the Market:

With insurance carriers grappling with losses that exceed projections, some may decide to reduce their presence in certain markets or limit the types of policies they offer. This could lead to reduced options for clients when it comes to selecting an insurance provider.

 

APCIA Says Property Insurance Market ‘Hardest in a Generation’ March 28, 2023

https://www.claimsjournal.com/news/national/2023/03/28/316110.htm

 

Nationwide to go through re-underwriting initiatives to further improve its book June 13, 2023

https://www.reinsurancene.ws/nationwide-to-go-through-re-underwriting-initiatives-to-further-improve-its-book/

 

State Farm hit with record $13.2 billion underwriting loss in 2022 February 27,2023

https://www.wglt.org/local-news/2023-02-27/state-farm-hit-with-record-13-2-billion-underwriting-loss-in-2022

 

Kemper Exits Preferred Home and Auto Business Immediately August 8, 2023

https://www.insurancejournal.com/news/national/2023/08/08/734476.htm

 

State Farm, Allstate, Other Home Writers Facing Same Consumer Price Index Pressures July 14, 2023

P&C Specialist’s Post; Subscription required; full article can be sent upon request

 

Big Personal Lines Carriers Restructure Biz Ops: A Timeline September 6, 2023

P&C Specialist’s Post; Subscription required; full article can be sent upon request

 

Home Insurance ‘Bubble’ Closer to Popping as Climate Risks Mount September 20, 2023

Bloomberg News; Subscription required; full article can be sent upon request

 

Farmers Plans to Drop 67K Home Policies in Texas October 16,2023

P&C Specialist’s Post; Subscription required; full article can be sent upon request

 

 

Did you Know?

We offer a wide variety of insurance products to include Home, Auto, Life, Annuities, Motorcycle, RV, ATV, Boat, Small Business, Rental, Umbrella, and Equine Mortality/Major Medical coverage.
 
Galvin Agency is here to help you with insurance questions, needs, and claims. We are here to assist you and our job is to make sure you feel protected and knowledgeable. Thank you for your business and we look forward to talking with you soon!

No person associated with this news letter receives any form of compensation for any products mentioned, nor should any mention of a particular product be considered an endorsement of that product. This newsletter is for informational purposes only and should not be considered authoritative on any topic. Please seek advice from an appropriate professional on any specific issue.

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