We hope the attached newsletter finds all our clients well. With Thanksgiving, Christmas and the end of 2023 rapidly approaching, we hope that you are able to find time to spend with those you love and reflect on yet another blessed year.
The last few years have been difficult for most, with rising prices due to inflation and the lingering effects of the pandemic. The insurance industry is not exempt and has experienced a lot of change just in 2023. As we meet with our insurer representatives to discuss 3rd Quarter results, we find ourselves presented with valuable information that we believe should be shared with our clients. It is our responsibility as agents to be educators on the insurance industry--- even when the message may not be as positive as we wish.
Here are a few things you should know:
All our carriers are suffering a loss for 2023 and reporting loss ratios over 100. Most are reporting loss ratios around 120. That means for every one dollar of premium they receive, they are paying out $1.20 in claims expense.
Insurers are working to catch up with the economic inflation but are also experiencing more frequent claims. The main driver on the loss is weather claims, followed by fire claims. Unfortunately, there is not a way to prevent those weather claims.
As we are all aware, everything is costing more than it did just a few short years ago. The same is true for the insurance companies when they pay for claims. It now costs more to repair damage, rent vehicles, and pay for labor.
As agents, we are getting new changes from our carriers weekly. For the past month, it doesn’t seem like a week has gone by without significant changes in the insurance industry. Some of the most notable are:
Standard rate increases of 25-27%-- this is WITHOUT any claims or new MVR activity.
Moratorium on new business- meaning we cannot write new business with that carrier for a period of time.
Stricter underwriting guidelines, such as no longer writing homes over 100 years old or not writing a new auto account with more than 1 accident or violation in the household within the past 3 years.
What does this mean for you?
This “hard market” is going to be here for a while. While no one can be sure, the earliest we anticipate that the market will change is the end of 2024 or beginning of 2025. (Weather will be one of the biggest deciding factors.) As your independent agents, we can be more valuable to you now than ever before. We are working hard to keep up on with the changes and advise clients on the best path forward. Please do not hesitate to call, e-mail, or stop into the office to ask questions or discuss your policies. We want to partner with you to keep your assets covered!
As always, we want to thank you for your continued support of Fort Recovery Insurance Agency! We are looking forward to seeing you at the Fort Recovery Merchants Christmas Open House (if not sooner).