As with most Pennsylvania industries, the insurance industry is cyclical. As an insurance buyer, it’s important to know what factors determine the cost of coverage and how the insurance pricing cycle works.
The insurance industry pricing cycle alternates between periods of soft and hard market conditions. In a hard market, coverage is harder to place and premiums grow. A soft market indicates premiums are stable or falling, and insurance may be more readily available.
A variety of factors influence price, including economic downturns, catastrophic events, insurers' claim reserve dollars, and supply and demand. Supply is tied to the amount of policyholder surplus in the industry, and demand is the appetite of the insurance-buying community to transfer risk.
Between lines of coverage and geographic locations, pricing cycles can also vary. For example, pricing and underwriting for coverages based in hurricane area is much different than locations elsewhere.
Although premiums vary due to market pressure, your true cost of price is determined by your claims history. Our consultative approach can help identify risks, help with safety programs and reviewing coverages to ensure your properly covered.
Contact Premier Group Insurance to review your insurance strategies and see the ways we can help in your insurance future.