If you received a shocking renewal rate, you aren’t alone.
After a decade of flat or declining rates, insurers have raised prices aggressively over the past year – and there’s no relief in sight. Increases of 30% or more are not uncommon for commercial property renewals, depending on geographic location, loss history, and exposure.
Years of catastrophic losses and low investment returns have driven insurers to cut back on property capacity, increase retentions, and restrict coverage, along with increasing rates. Some carriers are even pulling out of high-risk areas altogether in an effort to limit their exposure. The pressure is now on buyers to make smart decisions about constructing insurance programs.
Here are 5 ways a RMIS can help.
- Pay for what you need and only what you need. You don’t want to risk underinsuring a property. But you also don’t want to pay for excessive coverage at the expense of funding future growth. A RMIS gives you immediate access to every detail about your properties, the coverage, and the status so you can quickly identify any duplications or gaps in coverage and make sure you have exactly what you need.
- Visualize complex insurance programs. With lower limits being imposed by carriers, more buyers may need to self-insure or add carriers to their programs. A RMIS converts complex information about layers, limits, and erosion into easy-to-understand graphics at the click of a mouse.
- Increase your underwriting credibility. Carriers are ramping up their due diligence around valuations to make sure they don’t get burned paying a claim on an undervalued property. A RMIS gives you a clear record of values and methodologies used, along with market-ready reports to share with underwriters. Complete, high-quality data gives underwriters confidence in the accuracy of your data – which can translate into more favorable premiums.
- Allocate costs appropriately. In an environment of rising prices, every penny counts. Holding managers accountable for their own losses can be a powerful motivator to be mindful of safety, claims, and other factors that contribute to premium rates. A RMIS provides a consistent, precise – and credible – structure to accurately and efficiently allocate premiums based on actual experience.
- Explore options. In this market, insurers want to make sure they collect every bit of premium, while restricting every chance of payout. A RMIS gives you a clear picture of where your risks are so you can make smart decisions about the future, such as adding or eliminating locations, for instance. You can map property values against geographical risk data such as earthquakes, weather and fire hazards, produce loss-ratio reports, and identify possible new areas for loss prevention. In short, a RMIS puts everything you need to make informed decisions right at your fingertips.
A hardening insurance market is no time to be asleep at the wheel. While a RMIS can’t reverse market trends, it can give you the data and insights to successfully navigate this challenging market.
For more discussion on the hardening insurance market, register now for our webinar, “Breaking Through the Hard Insurance Market,” on March 19.
For more information on purchasing a RMIS, download our e-book, Risk Management Information Systems: The Buyer’s Guide.