After 2017, Will Insurance Rates Rise?
THE MARKET RESPONDS TO LAST YEAR’S DISASTERS
Last year, an unprecedented rash of natural catastrophes ripped through the United States and beyond. Between Hurricanes Irma, Maria, and Harvey devastating cities and leveling Caribbean islands, vicious firestorms scorching the California landscape, catastrophic Mexican earthquakes, and a slew of other extreme weather events, the U.S. alone racked up record-breaking weather-related damages last year. These disasters tore apart homes, reduced cities’ infrastructure to rubble, and tragically ended hundreds of lives throughout the world. Certainly, the shockwaves of these terrible events aren’t likely to subside anytime soon. But there’s one consequence of the late- 2017 devastation that many Americans haven’t considered: rising insurance rates.
growth for the vast majority of insurance companies in 2017. As a result, analysts expect carriers to raise prices in order to offset losses. Starting in the property market, these price hikes are likely to spread throughout the insurance landscape over the coming months, with projections in industries like construction expected to rise as much as 5–10 percent. The question is whether these increases will last. Barring an onslaught of catastrophic events that reach the unprecedented costs of 2017, USI writes, “Sustaining the magnitude of these increases will be a challenge [for insurance companies].” The future of the insurance industry remains to be seen, and it’s largely dependent on whether these massive disasters are the new norm or an isolated anomaly. One thing’s for sure, though: As the insurance world changes, it’s more important than ever to have a trusted, experienced insurance advisor by your side.
According to USI’s “2018 Insurance Market Outlook” report published last February, losses and expenses began to outpace
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