by Mitch Keller, Agent on Jan 14, 2021
What is on the horizon for business insurance prices in 2021? You’ve been creative and resilient as you continue to weather the COVID-19 economic storm. Controlling operating costs may be high on your list. The good news is, insurance markets appear to be at the tail end of the increasing rate cycle that is characterized by tightened underwriting, lower risk capacity and higher than normal rate increases (a “hard” market). As the economy recovers and heats up in the second half of 2021, this cycle may break under the pressure of increased competition for market share by competing insurance companies.
At American Insurance we are already seeing some cracks in the increasing premium rate cycle. When some businesses were offered unreasonable rate increases, we quoted their coverage in many other companies and were able to reduce the premium rate. We represent or have access to a broad range of top insurance companies that all compete for your business. Competition is the best way to find the lowest rates in the insurance marketplace.
The 2020 fourth quarter composite rate increase for US property and casualty commercial insurance was up +7.1% according to MarketScout. Hardest hit by increases of 10% or more has been Commercial Umbrellas (Excess Liability), Directors & Officers Liability and Commercial Auto lines of insurance. Overall, the composite rate increase for 2020 was 5.6%. This increasing rate trend is likely to continue the first half of 2021 but then stabilize and begin to moderate later in the year. A noted exception is Workers Compensation that has seen modest rate decreases the last three years but is now level in pricing.
American Insurance invites our friends and neighbors to contact their Agent to review your business insurance options. We can submit your business insurance to many different companies to find you the best rates and coverage available today.
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