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Hard Property Market to Continue in 2021

February 25, 2021

The property insurance market will continue to harden through 2021 with rising exposures and reinsurance costs driving primary rates higher, per a report from wholesale broker Risk Placement Services (RPS).

Today, we are well into a hard market across most insurance lines effecting nearly all industries. RPS expects rate increases in the high-single digits to 15% range on clean accounts. Increases are expected to be higher on accounts with losses. The premium hikes are no surprise, given the effect of climate change on natural disasters and increased rebuilding costs.

“The majority of businesses and organizations will feel the effects of the firming market,” said Avery Risk Manager, Nick Aube. “In addition to increasing rates the insurance carriers are becoming more strict with their underwriting guidelines.”

Insurers have implemented tougher underwriting disciplines and have begun to introduce new exclusions for communicable diseases and strike/riot/civil commotion. The report also cited a shift from flat-dollar catastrophe deductibles to percentages as high as 5 percent. Buyers should also expect to see restrictions on business interruption coverages.

RPS emphasized the impact reinsurance has on primary rates, with property insurers seeing hikes of 15% to 20% at the January 1 renewals. A key focus for 2021 will be improving accuracy of valuations. RPS explained higher rebuilding costs have pushed many claims into the excess layers of coverage, taking excess carriers by surprise and prompting insurers to price risks up to 40% higher than catastrophe models would suggest.

The hard property market will shift agents and brokers into overdrive, requiring extra time to identify creative solutions to fit their clients’ budgets, RPS predicted.

Experience and relationships matter more than ever. Avery has deep affiliations with the most highly respected insurance companies in the industry. Even in a challenging market, Avery can provide the most competitive solutions. “By starting the renewal process early, we have time to effectively navigate this hard market,” continued Aube.  

Avery will deliver a customized solution to reflect the unique exposures, tolerances, and budgets specific to your company.  Call us to explore the value Avery can add to your risk management program.

Portsmouth: 603.766.3733

Wolfeboro: 603.569.2515

New Orleans: 800.759.7579





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