Summer’s here, and it looks like the pandemic is finally starting to ebb. As states relax COVID-related regulations, restaurants and retailers across the country may be back at full capacity very soon. This is all great news for our agencies and our commercial insurance clients
The pandemic’s dramatic effect on the economy put pressure on insurance companies over the past year. Experts predict commercial insurance premiums will rise this year, and umbrella coverage may become more popular as protection against uncertainty. Technology and insurance will continue to intersect, too. Here’s a look at what to expect from the rest of 2021.
Premiums Will Continue to Rise
The pandemic was an enormous and unexpected shock to the US economy. State shutdowns forced many businesses to lay off workers or close temporarily. Many small businesses across the country closed for good.
While the full effects of the pandemic on the economy have yet to be fully realized, the events of last year have already started to impact commercial insurance premiums. Most experts predict commercial insurance premiums for commercial liability, casualty, and worker’s compensation will be higher this year than the last few years. This may be especially true for excess and surplus lines. In this case, independent agents will benefit from having relationships with multiple specialty lines carriers, including those in the Smart Choice® Express Markets™ program.
Umbrella Coverage Will Protect Against Uncertainty
Between the pandemic, civil unrest, and severe weather, 2020 taught us that preparing for the unexpected is more important than ever. Commercial umbrella policies offer businesses extra liability coverage in case the worst happens. Given the events of the last 18 months, expect your commercial customers to ask you about commercial umbrella options, and know which carriers offer competitive rates on umbrella coverage.
Custom Policies Will Be More Popular
Custom polices are becoming more popular in personal lines and commercial lines markets as customers demand more choice and carriers realize offering custom coverage can cut costs. Personalized coverage offers customers flexibility and choice in their policies, often based on their past insurance history. Expect to help your customer pick and choose the type and amount of coverage they need in 2021.
Customers Will Use Technology to Interact with Carriers
Carrier apps and telematics are big trends in personal lines insurance right now, so it is no surprise that these technologies are transforming the commercial lines market, too. Carrier apps make it easy for busy business people to manage their policies and file claims on the go, while telematics can help cut down on the cost to insure vehicle fleets. Commercial lines carriers may also start to offer customer support through their social media accounts this year, just as personal lines carriers do.
Companies Will Demand Cyber Security Coverage
With many employees now working remotely, cyber security is a growing priority for businesses. Cyber security insurance coverage can cover the costs of a data breach or other cyber disaster. Be prepared to quote cyber security policies for your commercial customers this year. If you do not have a relationship with a cyber security carrier, get in touch with your State Director. This year is likely to bring changes to the commercial lines market, just as it has with the personal lines market.
Smart Choice® is here to help you navigate these trends and help you make the most of 2021. For help finding carriers and growing your agency, reach out to your State Director.
An Evolving Commercial Marketplace
Businesses in the future will definitively want to be prepared with emergency plans in place for future interruptions. Insurers will want to see that small businesses have better business continuity plans in place – which most will after surviving 2020. Check out the 2021 Issue 3 of Smart Choice Magazine to see how independent agents can help businesses and commercial clients hit the reset button and navigate an evolving insurance marketplace as we move forward.