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What to Expect This Year in Insurance

Over the last 18 months, the insurance market has been “hardening” up. A hard market in insurance means that insurance companies are increasing their premiums and reducing the amount of risks they cover. This has been especially apparent on property (i.e., homes, buildings, rentals, etc.) and auto risks.

Catastrophic events are often the driver for this in the property marketplace. Wildfires, hurricanes, tornadoes, hail, and more can bring large losses and frequently in concentrated geographic areas. In the auto insurance marketplace, higher cost for parts, slower repair completion, more expensive replacements for electronics (e.g., hybrids, EV, microchips, etc.) have resulted in a similar increase in rates. Many companies have also reduced their offerings in the market as well.

When insurance companies pay out these larger claims, their profitability takes a hit. In fact, the property and casualty insurance industry as a whole experienced unprofitable years in 2022 and 2023, having a combined ratio of over 100% (under 100% traditionally means profit).1 While many expect a return to industry profitability sometime this year, the impacts are still taking place. Companies are charging more to insure property, whether it is a home, business building, or otherwise.

So, why should you care if insurance companies make a profit? Certainly, these are large corporations, some of which are worth billions. But they still support millions (almost 3 million in 20222) of people and provide safeguards for almost every individual and business in this country. The insurance industry is needed for our economy to function.

In 2024, it is likely that rates will continue to climb, but possibly at a slower rate. Then we anticipate that things may begin to “soften” as the year progresses. But you do have options as a consumer. Independent insurance agencies – like we are at Ownby Insurance Service – can shop your coverage for you with other insurance companies. Those that directly write insurance for national companies can’t offer that.

Our agents can discuss your options and help you find the coverage that’s best for you. Let us help you weather the hard market!

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