2013 started the year with most insurance carriers already in full swing to be more disciplined underwriters and pricing accounts above the prior rate levels. Many market indicators were showing rate increases of five to ten percent depending on the line of business and region of the country with property rates and workers compensation rates firming the heaviest. But as we wound up 2013 it appeared that rate increases were losing steam and underwriters weren’t sure what direction pricing was headed. We called it a somewhat “a lukewarm marketplace”; it is neither hot nor cold, but somewhere in the middle with no predictable direction.
Globally, reinsurance pricing should be somewhat reduced this cycle due to the lack of disastrous hurricanes or storms in the property market – but low interest rates do affect long term investment income for insurers, so it may be that insurers are somewhat sitting on the sidelines not sure what direction to push rates into 2014.
While an individual account may experience renewal pricing that deviates somewhat from the averages, the majority of accounts do face up and down rate swings depending on the gravity of the marketplace. But as my good friend Tim Hile (@zekemsu2h) recently tweeted “Bidding and Quoting is not Risk Management. Long term premium reduction can be achieved through RM360– don’t get averaged out like the rest”. RM 360 is his firm’s risk management and commercial insurance platform, which is similar to The Coyle Group Approach. We both subscribe to the fact that clients with an organized and disciplined approach to managing risk will outperform their peers who do not manage risk in several ways:
- They will experience lower insurance premiums over the longer term,
- They will reduce both direct and indirect cost of losses,
- They will generally operate in a safer and more productive fashion.
All of which rolls up to improved bottom line performance.
While we go through this somewhat “lukewarm marketplace” will your firm’s renewal program be “averaged out” with everyone else, as Tim suggests? Or, will you have a more strategic process to leveraging your risk management assets to out-perform your peers? If you believe that bidding and quoting is your most effect cost control measure then it might be time to talk to us so we can show you how to leverage the marketplace to your advantage. The Coyle Group Approach as well as Tim’s RM360 process put YOU, not your broker in the driver’s seat of your corporate coverage program.
For more information, please contact us for a no-obligation, no-pressure, no-sales pitch conversation!