The insurance industry is cyclical in nature based on carriers loss and profitability results. Both hard and soft markets are considered a normal part of the business cycle of insurance and typically run in 8 – 10 year cycles. Several years of quiet tropics have resulted in a soft market cycle more prevalent in coastal states resulting in:
- Relaxed underwriting criteria
- Increased carrier capacity
- Increased competition and additional market options
- Reduced pricing
As an agent, seeking the best coverage options for your client while at the same time retaining good business can be challenging as more markets enter the coastal states. Unless your client desires to purchase insurance strictly on price your decision to move an account should be thoroughly researched and evaluated including:
- Coverage forms – are the coverages offered equal to or better than the current policy? Are all hidden limitations revealed?
- Deductible options – “named storm” vs. straight deductible. Does your client understand the difference in paying a higher deductible for all storms vs. “Named storms”?
- Carrier financial stability – will carrier’s solvency become an issue in the event of a catastrophic event?
- Service levels- An insurance policy offers protection in the event of a loss due to covered perils. Does your current carrier offer exceptional claims service? Do you know if the alternate carrier has the resources available dedicated to claims service?
- Carrier responsibility – irresponsible pricing results in carriers jumping in and out of markets. Will your carrier remain consistent and available during hard market cycles?
Our underwriters are aware of the current market and will work with you to create a solution that meets your pricing and coverage requirements. It is our goal to assist you with various options while at the same time maintaining responsible UW practices to ensure a long term market option.