Hardening Insurance Market – The Importance of Preparing Now Businessowners should get ready for a more challenging insurance environment.The insurance market is showing signs of hardening, and this could make obtaining coverage more difficult for businessowners.Hard markets aren’t unusual, however, and there are steps you can take to minimize the impact.

The key is to start preparing now.Why should businessowners care about hard insurance markets? You need the right insurance coverage, with the right limits, to protect your business.During a hard insurance market, getting that coverage may be trickier than usual.

Hard and soft insurance markets tend to occur in cycles.During soft insurance markets, insurers are incentivized to write lots of policies.As a result, businessowners can get high limits while enjoying relaxed underwriting.

During hard insurance markets, however, insurers get stricter about underwriting requirements.As a result, businessowners may have a harder time obtaining coverage, rates may be higher and the available limits might be lower.What’s happening now? Right now, the insurance market is showing signs of hardening.

Insurance markets can harden for multiple reasons.In some cases, it has to do with the overall economy and investment performances.Other times, it has more to do with a spike in losses.

The latter appears to be what’s happening now.Whether it’s because people are driving more or because they’re more distracted, crashes have increased in recent years.Data from NHTSA shows a slight decrease in fatal crash rates since 2018, but figures are still higher than they were in 2009.

At the same time, high-tech vehicle parts are making repairs much more expensive.Taken together, auto insurance claims have skyrocketed.Natural disasters have also been taking their toll on the insurance market.

In 2019, there were 14 weather events with losses that exceeded $1 billion each, according to the National Centers for Environmental Information.On top of these major issues, we have increasing cyber risks, including data privacy, ransomware attacks, and hackable smart devices.There’s also the issue of so-called nuclear verdicts, in which juries punish defendants with enormous awards.

So how is the insurance market responding to all of this? Well, according to MarketScout, commercial rates increased 4 percent in the third quarter of 2019.Commercial auto rates were up 6.5 percent.  Prepare Now The market appears to be hardening, but there’s still time to position your company attractively – as long as you act now.

There are two main areas to focus on.Conduct a risk assessment.This is no time to throw caution to the wind.

Do an assessment of your company’s risks, and then take proactive steps to reduce those risks.Secure your insurance coverage.Getting the right coverage may become more difficult in the future, so work on this now.