In many ways, 2020 has been a tumultuous year. The pandemic, civil unrest, natural disasters and cyberattacks have put pressure on businesses and the carriers that insure them. As we head into 2021, here’s a look at what to expect in the P&C commercial insurance market.
With so much attention focused on the pandemic, it may have been easy to overlook the growing threat of cyberattacks.
In October, the Cybersecurity & Infrastructure Security Agency (CISA) warned that cybercriminals were targeting the healthcare and public health sector with malware that could lead to ransomware attacks, data theft and disruption. In December, another alert from CISA described attacks against U.S. government agencies, as well as critical infrastructure entities and private sector organizations. These attacks are related to the compromised SolarWinds Orion products, but CISA has stated that there is evidence that the SolarWinds Orion platform is not the only initial access vector.
Cyber Florida at the University of South Florida says that ransomware attacks have increased 715% in 2020. Ransomware attacks have also become sophisticated, and they can target institutions of all sizes and sectors.
According to Insurance Journal, the Zurich North America and Advisen Cyber Survey reveals that 78% of risk managers now have cyber insurance, up from 34% in 2011, and 55% of risk managers have a standalone policy.
In 2018, a motorcyclist was injured in a 45-car pileup in Florida. According to FreightWaves, a television station reported that the incident occurred after a semi-truck jackknifed and set off a chain reaction of crashes after trying to avoid a collision. A Florida jury awarded the motorcyclist $411,726,608 in what may be the largest nuclear verdict against a single trucking company.
Nuclear verdicts have been a growing concern, especially for commercial trucking and commercial auto insurance. According to Property Casualty 360, verdicts are increasingly going above the $10 million mark.
While technology is leading to new cyberthreats, technology may also produce new solutions.
With telematics programs, fleet owners can determine whether their drivers are practicing safe habits and take corrective action when needed, possibly preventing a serious crash and even a nuclear verdict.
Fleet owners are interested. A study from Nationwide shows that 94% of business owners believe that telematics helps protect their employees on the road, and 91% think that telematics has a positive impact on operations. Additionally, nearly 90% of business owners agree that the benefits of telematics outweigh the financial cost.
A Hard Market
In 2020, the commercial insurance market experienced rising rates and a hardening market. In 2021, these trends will likely continue.
Business Insurance says that, based on information from MarketScout, commercial insurance rates increased in every line of coverage and industry class in the third quarter of 2020. The CEO of MarketScout said that aggressive rates in property, D&O and umbrella coverages were expected for the fourth quarter, as well.
According to Willis Towers Watson, the hard market we are currently experiencing – which may have been caused by natural catastrophes, declining prices and low interest rates – will likely continue throughout 2021.
Work with a Broker Who Will Advocate for You
Now more than ever, you need an experienced insurance partner who can help you navigate a tumultuous insurance climate. You also need a broker with access to multiple carriers so you can compare the choices available.
Wilson, Washburn & Forster is a boutique independent insurance agency that has been in business since 1961. As a local broker, we are experienced in helping Florida businesses manage their insurance exposures. You will find that our experience, claims handling, service, and community commitment is unrivaled.
With the hardening market, it’s important to shore up your loss prevention practices now, carefully monitor your open claim reserves and start your renewal process early.
Contact us today for a complimentary analysis of your current insurance program by an insurance specialist in this field at 786-454-8384.