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Tuesday Morning Insurance Tidbit - The Hydra-Hardmarket

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Happiest of Tuesdays to you!!!

     Have you wondered where I have been … did you notice I have not posted in a while … maybe you have, maybe you have not, but rest assured, I am still here protecting the insurance-verse for you and the other denizens here on the forums.

     Suffice to say, between being a fulltime superhero, work, and living my cover life as a mild-mannered citizen, things have been rather wild and busy.  Some family issues, travel, etc., it has kept me busy and with little time to do anything.  With that said though, it is a new month, and I am resolved in finding some spare time to pen these much anticipated Tuesday Morning Insurance Tidbits of goodness for you, dear reader.

     With that, I am going to keep it relatively short and, I must warn you … not very sweet.  Bitter in fact in many ways.  I know you have read my updates concerning market cycles, brush fire scores, etc., and unfortunately and fortunately I am going to speak about this a bit more in this TMIT since you need to be aware as to what is on the horizon.

     We are deep in the throws of a double hard market, impacted by claims, and rates impacted by inflation, Covid, and ridiculous brush fire scores.  Let us take these one-by-one, shall we???

     Let’s start with the double hard market.  As you know from past musings, hard markets are cyclical and run from a 3 to 5, up to a 7 year cycle.  The good news here is that I am not foreseeing a 5 or 7 year cycle.  I do think we need to settle in though for 3 years of “not super pleasant times”.  I have been doing this for 20+ years and have a pretty good “gut” for this kind of thing as well as market statistical analysis that I am basing this on.

     A double hard market is like a supervillain with extra superpowers!!!  Not only are they dangerous, they also have the supercharge chutzpah to back it up!  Basically, a double hard market (my term, not theirs … you know, them …) come in the way of rate and underwriting.  First, rates are on the rise, and second, certain things that they would slip past underwriting in the past they no longer are willing to do.  This spells a bit of trouble on the horizon for those purchasing distillery insurance, or renewing past policies.  I have seen rate on the rise of anywhere from 7%-20% depending on the carrier, coverage, location, litigiousness of Liquor Liability claims in states, etc.  As well, speaking of underwriting, I have not only seen carriers choose to not renew policies in certain states altogether, but I have also seen them putting a moratorium on writing any NEW business in a state.  This means that even if they had previously written coverage in a certain state, they are not offing to continue to write it anymore.  In some cases, they will partner this along with making the renewal so expensive that it leaves the current clients with no other choice than to shop for a new carrier.  Basically a “cancellation” of sorts simply due to prohibitive costs.  DIABOLICAL!!!

     Then we have claims history.  Not only is this weighed individually, but also by state, and as a whole.  Liquor Liability claims have been on the rise over the past few years, and that is having a heckuva impact on certain states, in particular.  If you are in Alabama for instance … best of luck.  Actually, I have found a few carriers that will provide it, but it can be a costly endeavor for sure.  Like 3 to 4 times more than most any other state.  As well, our friends in California are seeing carriers not taking on any new liquor liability business.  This compounded with the aforementioned makes operating in certain places rather difficult.  No worries though, I am still here fighting the good fight for all of you, and I can assist you with my ultra-super-insurance powers.

     I will briefly touch on inflation and Covid as we are all sick and tired of hearing about and feeling the impacts from these items.  Inflation effects everything, including insurance rates.  It is not due to supply-chain however, but dollars are simply not going as far as they use to.  Then, “the ‘Vid”.  The “’VID” has had an impact due to being short staffed, people not going back to work at insurance companies, on and on and on.  ‘Nough said.

     Last but certainly not least is the crazy brush fire scores that we are seeing throughout the country.  Drought, past wildfires this last year throughout the country, and the prediction of an unseasonably dry year have underwriters shaking in their 3-piece suits, or pantsuits … either way.  They take the past information as well as the predictory “crystal-ball” information that actuaries provide them with (an aside here.  If you don’t know any actuaries, let me tell you, they are like morticians mixed with accountants, mixed with a log, but lacking the personality!  I jest … kind of).  All indications point to dry and fire-y year, and that is not a good combo for actuaries and underwriters.  Some carriers, in fact, have chosen to not underwrite property of any kind in certain areas.  Those that are writing it are getting a premium for it (pun intended), like a BIG premium.

     At this point in the writing, I feel like I am the bearer of bad news, and that was not my intent at all, rather, I simply want to inform you and make you aware of what is happening in the insurance-verse.  Alas, worry not dearest reader, I am here to assist and serve.  I have carriers that will do anything, anywhere, albeit, for a cost.  I also have the VERY BEST carriers in the world that will look to make sense of things and try to make the round peg fit in the square hole when possible.

     If you are facing this “Hydra-Hardmarket” (I am copywriting that right now as I have never heard that in the past and just came up with it, and it sounds like just the kind of super-monster fit for InsuranceMan2.0!!! to battle!!!) give me a call, shoot me an email, turn on the InsurnaceMan2.0!!! sky-floodlight-thingy.  Whatever works for you.  I am ready and willing to assist each and everyone here, big or small I will protect you all.  Until next time, truth-seekers …


Stay Vigilant,

Aaron Linden

a.k.a.  InsuranceMan2.0


aaron@roaringforkins.com        or       insuranceman2.0@yahoo.com

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