State of the Commercial Insurance Marketplace – Tips to help you prepare for the 2016 market cycle

State of the Commercial Insurance Marketplace from 2014 – 2016

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The Theme is “Great news!”

Going back to quarter three and quarter four of 2014, we have continued to see a downward spiral in insurance rates and premiums. This downward spiral is typically in the double-digit percentage rate range of 10-15%. In quarter one and quarter two of 2015, we saw extremely high M&A (mergers and acquisitions) activity in the insurance industry. These mergers and acquisitions have led to a broadening of products and services, as well as coverage terms and conditions available in the marketplace. The expansion of products, services, coverage terms, and conditions has continued to keep rates low across the board.

If we focus our attention on carriers that operate in niche businesses, such as: nonprofits, entertainment, hospitality and bio-tech; we have seen a rate uptick in the 5-10% rate range. We believe this uptick is because brokers aren’t shopping the business.

So What Does that Mean for Quarter Four of 2015?
Carriers are aggressive right now wanting to put up big numbers for year-end, making it a very good time to market your account.

Looking into 2016
We don’t expect anything to change in terms of capacity in the liability marketplace. This will lead to a continuation of aggressive rates offered.

Property Line of Coverage
Regarding the property line of coverage, we have seen historical lows the last two years. This means there is no place to go but up. You can anticipate flat renewals or slight increases in your property renewals this coming year.

DIC (Difference-in-Conditions) Marketplace
Investors are looking to get returns on their dollars somewhere other than the stock marketplace; the DIC marketplace is where they are looking to do that. This means that if you have a Grade-A facility that has been retrofitted, you can anticipate very aggressive rates moving forward. If you don’t have a new building or a retrofitted property, you can anticipate property rates going up with less capacity being offered.

You Should be in the Marketplace
Work with your broker on a strategy to capitalize on the rate savings that are available right now. Get Creative. With property rates at an all-time low, they can only go up. Meet with your broker and the carrier to negotiate two or three year rate locks to continue to capitalize on the rate savings that are available right now.

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The Commercial Insurance Division of The Partners Group caters to the unique needs of our clients, with the wide variety of services we offer along with the fully integrated options we bring to help address risk management issues. Our people also distinguish us with their unusual ability to connect on a personal level, while focusing on a problem-solving approach. | Email | 800-722-6339

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Jordan Stair and Paul Vlcek, Account Executives of The Partners Group Commercial Insurance Division.

jstair       Paul Vlcek, Commercial Insurance Account Executive

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