If there is one thing has been consistent in the year 2020, it’s change. Every time you look around, the dynamics of social, political, economic and technological conditions are in motion this year. All of this change is affecting our lives and how we interact with the availability of products and services we need and use. It has also affected the market for insurance and employee benefits.
Premium rates for employee benefits and property and casualty insurance programs are experiencing constant change with current market conditions. The pandemic, natural disasters like hurricanes and wildfire, and widespread unemployment are among the complex factors impacting the cost of and access to insurance. Capacity, or the limitation of insurers to offer coverage based on their financial exposure to risks, can drive up rates and makes it difficult to provide coverage to everyone who wants it. When the economy creates greater competition for a scarcer number of customers, rates can come down.
The crisis we are living through now is also an opportunity to examine your alternatives, from employee benefits like Life, Disability and Dental plans, to Liability and Workers’ Compensation. Are you receiving the most up to date cost and terms from your broker?
For employee benefits, this could be the time to cast a wider net over the market to identify the potential for better rates and explore voluntary plans that allow employees to purchase a customized portfolio tailored to their family needs. There may also be opportunities in claims administration for self-funded coverages to decreases costs and improve service.
In property, liability and casualty programs, it is important to understand not only the rates but your total cost of risk. In pool programs, expenses can include your self-insured retention, and the confidence level set for expected losses that could result in additional assessments. Finally, you could be paying for packaged loss control services you may not need.
In evaluating your insurance programs, you may need assistance presenting the nature of your exposures and, more importantly, those you don’t have. The objective is a program that secures protection for your district’s finances and only paying for ancillary services you utilize. This approach provides greater control over your total cost of risk and better value from your premium dollars.