Expert advice on how to manage your insurance portfolio during years of insurance industry rate increases.
Atlantic Canada, well realistically the entire world, is entering what the insurance industry refers to as a “hard market”. And it really is that, It’s hard. It is difficult, and hard to talk about. General gist, it means that rates are going up.
We’ve tacked this subject in a previous post about auto rates in the province of NB, but we need to talk about it again. The reality is, rates are continuing to increase on all types of insurance, and no one knows how long this will last.
Hard Market vs. Soft Market: Some History
As with many industries, the insurance industry goes through cycles of hard and soft markets. The industry loves a soft market. During the last one, from 2006 to 2016, insurance rates were low, and competition was fierce. We were able to source fantastic rates for our customers. Life was good.
Unfortunately, the tides began to change in 2016, and we started seeing the market lose some of its softness. Insurance companies began to pay out more and more in losses, and reached a point where many were paying out more in claims than they were collecting in premiums. Most people in the industry agree that the increase in repair costs and the staggering number of claims due to major weather incidents are two of the biggest contributing factors.
How to Handle the Hard Market
Until insurance companies return to a point of profitability, we will see rates going up on both home and auto insurance. Important to remember, however, the insurance industry is open, and still quite competitive. Your hands are not tied in making sure that your insurance portfolio is well managed. We’ve compiled our top four tips to adapt to the current market situation.
- Call your broker. There is absolutely no better time to be with an insurance broker than now. With the direct providers, like the banks, you are stuck to their product, and their rate. You are not provided with options. Your insurance broker, on the other hand, can take the time to remarket your insurance portfolio. At Kent & White, we represent some of the largest insurance providers in the country, and always have an option to move your portfolio to another provider. If you are a current customer, call us. We are happy to help you with this! We have an excellent view of the market and can check with almost 10 different companies with one application.
- If you are not with a broker, find a good one! We fully admit that this is self-serving, but the advice is good never-the-less. Whether you choose us in Atlantic Canada or would like for us to recommend a fantastic broker in another province, an insurance broker will get you through this market. They will work with you to find the best possible balance between coverage and price, and they can shop your rate for you anytime that you like.
- Find a GOOD one! Yes, this is slightly repetitive to our second point, but we cannot stress it enough. Not all brokers are created equal. In our office, one of our core values is around continuous learning. Many brokerages invest in the minimum education requirements for their staff. Kent & White invests heavily in training our people (as do a number of others!). Our team invests in education directly with the insurers, ongoing broker training, and multiple communication tools to assist our brokers in sharing knowledge.
- GROUP PROGRAMS! Maybe this should have been our first point, but group programs provide an extremely high level of value! At Kent & White, we have group programs for the Chaleur, Edmundston, and Haut-Madawaska Chambers of Commerce, as well as United Steel Workers (USW) and SOAR. All employee who works for a member company of the Chamber plans mentioned above, or any USW union member, or retiree have access to some of the best rates in the country for them and their family. Many of our new clients are thrilled to find out that they end up qualifying for one of our group programs.
The insurance market will soften again, but our guidance for managing your insurance will remain sound. A good broker will always be your greatest advocate in the industry. We shop the best rates across the country with one application, and we are not limited to one product, or one rate like the direct providers. We are completely independent from your insurance provider, and mandated to represent our clients, NOT the insurer.
As always, we will continue to provide our customers with information that we feel is relevant. Here is a link to some additional reading that may help to explain the current insurance market: