Over the last couple of years, insurance seems different. Some areas have seen premium increases, and some lines of business have found it harder to get the same coverage previously available. A few insurance companies have even left states that they found unprofitable. We call this scenario a “Hard Market.” And it affects all of us.
The real question is: why? What has changed that made insurance feel differently than it did before? Here are some reasons that can help shed light on this unfortunate reality:
- Unavoidable Disasters – The last five years have seen tremendous disasters hit our country: Hurricanes, wildfires, and COVID-19. These challenges hit the insurance industry with massive costs and changed the shape of the economy.
- Economic Fluctuations – The economy has changed, forcing the insurance industry to adapt. Issues like supply chain breakdowns and the high cost of housing have driven up the cost of claims and coverage.
These two factors and a general challenge for insurance companies to stay profitable can help explain why costs may be up for some of us. These may not be the only factors involved, but they give a good idea of why you may feel a difference in your insurance experience.
Source: agencyrevolution.com
