These fast facts can help you explain to your customers why rates are increasing industry wide. Why are they doing this!?
- 2011 set a new record of 99 Federal Disaster Declarations (previous record was 81 set in 2010)
- 2011 total thunderstorm losses set a new record of over $25 Billion (Previous records were just over $10 Billion in 2008 & 2009)
- 2011 had the 2nd highest tornado count in US history at 1,893 (1st highest count was 2,194 in 2008)
- 2011 SPRING storm activity was the 4th most costly event in US P&C Insurance history at $21.3 Billion (9/11 was $24 Billion)
- 2011 underwriting losses for carriers will be the largest since 2001
2011 was indeed a bad year for losses, but weather related P&C losses have been trending upwards for the last 5 years. Factor this information with low investment revenue generated by carrier/reinsurance surpluses and the insurance carriers have no choice but to raise rates to keep their companies solvent. It’s important to communicate that they will be better off in the long run by sticking with their current carrier and continuing to build up longevity (loss history) rather than changing to a new carrier that will start the accrued premium over at $0 and risk cancellation for poor policy loss performance. It is also important to explain that the rate increases are industry wide, and that a carrier with a lower rate right now will probably be increasing their rates at next renewal. We share this information with you in hopes that your educated clients will know that your agency is providing them the best long-term service to prevent them from shopping with other venues during this changing market.