Premiums should remain stable, perhaps begin to soften, in 2016. However, there are certain pressures we must consider. First, AM Best has re-calibrated the equation they use to determine if an insurance carrier has secured enough reinsurance. Certain carriers may be forced to secure additional reinsurance in order to retain their positive AM Best rankings. The effected carriers will need to pass along that cost to the insured. Thankfully, reinsurance costs are at historical lows – so impacts could be minimal.
Secondly, we are in an election year. Whoever takes the White House, how will their policies effect the insurance markets?
Lastly, we have the stock market. The increasing volatility could signal the emergence of a bear market. Financial companies appear to be leading this charge downward – at least when this post was drafted. Should the market cool substantially, the insurance carriers could lose investment income… which could force them to increase our premiums to make up for that loss. However, given the underwriting profits the carriers have appreciated over the past few years and the competition for market-share that exists presently on the street, premiums would likely remain level (depending on how low a bear market takes us, of course). Additionally, expect M&A activity to continue on both the carrier and agency-sides.
In all, 2016 will likely be a changeable year – especially in the 2nd half. We will stay on top of the carrier financial reporting and will continue to monitor the street. As the new curves in the market present themselves, we will make sure that our insured clients are prepared. Onward! -Scott H. Sutter, President of SRT
The past two winters have reminded us New Englanders how much snow can effect our businesses. Too much snow – property owners, residential associations, and municipalities blow through their snow removal budgets, hotels don’t fill beds, and restaurants have fewer customers. If the snow sticks around, golf courses can’t open, race tracks can’t host races, and amusement parks can’t welcome guests. On the opposite side of the spectrum, if New England has a mild winter, snow removal companies’ plow trucks stay parked. The Farmer’s Almanac suggests New England will see yet another snowy winter. Meanwhile, the balance of the forecasting community feel it’s too early to tell – as explained in this article on Philly.com.
If your business has been hindered by snow or the lack thereof, we have a solution. Strategic Risk Transfers can back-stop your budget’s exposure to weather-related losses through an insurance-derivative.
Other weather risk programs are available on the market – but beware. Since these products are insurance-derivatives, they are not regulated by your state’s insurance department. The program managers could literally take your money and run. We, however, only secure your coverage through a nationally recognized insurance carrier, whose regional offices are located in Simsbury, Connecticut.
Now is the time of year to consider a weather-risk program. Once November hits, it’s too late. If you are interested and would like to measure the economics, email SRT President Scott Sutter at firstname.lastname@example.org or at 508-304-6106.
NBC Connecticut recently featured SRT President, Scott Sutter, in an on-air interview. Scott was to compete in the 2015 Nutmeg Games and shared a little-known facet of his life with the event organizers – who invited Scott to share his story publicly. He agreed. “I am flattered by the storytelling of NBC-CT. The paralysis that I dealt with when I was younger is a story that I have rarely shared. J.W. Stewart did a wonderful job presenting the meaningfulness of the challenge I was able to overcome and I am endlessly thankful. My wish is that someone who really needs to hear this message sees this video, and it gives them hope.”
SRT Sponsors 15th Annual Somers Great Escape
Nearly 400-runners participated in this year’s Somers Great Escape – which is a true destination race. Immediately after the race, the 4-Town Parade kicks off, officially opening the 4-Town Fair… drawing tens of thousands of people to the quiet horse and tobacco farm town of Somers, Connecticut. This year, the race itself raised over $8,000 for the Somers Educational Foundation – a privately funded grant, that provides scholarships and classroom supplies for the Somers Public Schools. More info on the SEF can be found on their webiste: www.sefonline.org. More info on the race can be found on their website: www.SomersGreatEscape.com