Insurance Prices Rising

The July renewal season is effectively over and premiums are going up.

So far, most of the increases seem to be in property insurance.  The cost of insuring buildings and contents are increasing between five and two-hundred percent.

Yes, two-hundred percent!

I am getting reports that the insurance on commercial properties in areas unprotected by fire-hydrants and modern fire-fighting equipment are increasing as much as 200%.  (Think rural areas more than a few miles from a fire department and without municipal fire hydrants.)

This does not affect very many bank properties. It certainly will impact some of your commercial customers. (Want to make a friend for your bank?  Have your loan officers start talking to rural business owners about property insurance premium increases. Suggest that they talk with their insurance agent very early in the renewal process.)

Properties anywhere near the Atlantic and Gulf Coast are seeing ten to twenty percent increases.

So far I have not seen much change in bank specialty insurance (the fraud-bond and management liability). Cyber liability insurance continues to be renewing at about the same premium as the expiring policies.

That could change but I really don’t think it will for a while – at least for financially strong banks with few losses.  All indications are that bank specialty insurance continues to be profitable and there are almost always several insurers willing to provide proposals. The competition will help keep premiums down.

A key part of any insurance strategy MUST be early work on policy renewals.  You must insist that your agent provide quotes 30 days before your policy expires. I start talking about renewals five months out. I often suggest that insurers provide estimates of premiums to my bank clients two or three months out.

The earlier you get your renewal premiums the better able you are able to respond to changes.

General Rule: Fire an agent who brings you a renewal quote the day before a policy expires.