Hard Insurance Market / Inflation Toolkit for Agents

Resources to Help Agents Navigate the Hard Insurance Market/Inflation

Content designed for you to use and share.

What’s Inside the Inflation/Hard Insurance Market Toolkit?

This toolkit was created to help you navigate the hard insurance market/inflation with your customers. Today, inflation is creating immense pressure on small commercial and property lines. It is increasing claim costs and exposure-liability trends, while challenging carriers to maintain adequate pricing. That’s why our customers are seeing a 15% Exposure Increase (building value) on renewals effective December 1, 2022. We vow to monitor inflation drivers and are committed to lowering our building exposure increases once we have achieved acceptable building limits for our insureds.

Our content collection below includes infographics, videos, case studies, blogs, social media posts, and more designed for you to utilize and help educate your customers about the impact inflation has had on insurance.

If you have questions about the Toolkit please reach out to Katie Gouldner, PR & Marketing Communications Specialist, by email here.

Content for Customers

Curated Content for You

This type of content resonates with people. Client education is all about helping your clients get more out of your services. Because it’s more customer-focused than sale-focused, it can go a long way in building loyalty and trust.

Insurance, Inflation & You

Property values are rising with inflation. If your policy limits aren’t, your coverage may be insufficient. Insuring to value protects your rental property business. Millers Mutual’s rental dwelling business coverage keeps up.

Case Study: When Coverage Doesn't Keep Up

When Roger and Giselle purchased a nice duplex and insured it for $180,000 in 2011, they knew it could be the key to a secure future for their children. Having revisited their policy limits in 2018, they expected their investment to be safe. However, nothing could have prepared them for the loss that resulted from not insuring their property to its current value.

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2022 Rebuilding Prices Reach New Heights

If your policy limits haven’t grown with rising costs, you could face unexpected out-of-pocket expenses for large claims. At Millers Mutual, we work closely with your agent to ensure you have the right coverage to protect your rental property business.

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Blog Posts for Customers

8 Solid Ways to Maximize Your Rental Income As You Combat Inflation

If you have a rental property, your goal is to make money… and as much as possible. Going into 2023, you should resolve to make the most of your rental property income, especially as you navigate the yucky waters of inflation. But what can you do to ensure you’re making the most of it?

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Why Adjust Building Value for Inflation

The price of everything has skyrocketed since 2020, making record inflation the news of the day. Between rising material costs and supply chain issues, building or renovating anything is a challenge right now. Many property owners have put off renovation and construction projects. But what if you have to rebuild?



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Can Your Insurance Keep Up With Inflation?

Your property insurance policy should help cover repair, replacement, and rebuilding costs when a covered event results in damages or loss. But during a time when inflation has prices for goods and services rising by staggering margins, how can you be sure your policy gives you adequate coverage?

READ MORE

Content for Agents

Understand and Communicate

The impact of inflation on the insurance industry is big, and not going away anytime soon. Below are resources we’ve created for our agents to better understand the impact of inflation on insurance.

Inflation Continues to Drive Increases in Building Valuation

Millers Mutual Customers Will See a 15% Building Valuation Increase on Renewals Effective 12/1/22.

Inflation is creating immense pressure on small commercial and property lines. It is increasing claim costs and exposure-liability trends, while challenging us to maintain adequate pricing. Read more to understand Millers response and find helpful data supporting our decision.

We made the decision to increase building values to 6.5% effective 8/1/22 based upon the available information from building valuation service providers. However, with the elevated levels of inflation continuing, we’ve determined this increase is not sufficient to address the concerns inflation is creating for us as a company and for our insureds as it relates to their levels of coverage on their properties. We must further increase our building values to continue providing an adequate amount of insurance for our customers’ properties.

Effective December 1, 2022, our insureds will see a 15% Exposure Increase (building value) on renewals. We will continue to monitor these inflation drivers and are committed to lowering our building exposure increases once we have achieved acceptable building limits for our insureds and obtained rate adequacy.

The following data points support our decision to increase our building values:

  • The Joint Center for Housing Studies of Harvard University reported the value of a landlord’s rental property increased by 16.8% by YE 2021 and hit 20-year high in early 2022, growing 22.5% year-over-year. According to this, the very asset our insureds are trying to protect has increased in value during 2021 alone to support the level of increase we are implementing.
  • According to the US Bureau of Labor Statistics, the Multifamily Residential Construction Producer Price Index increased 18.7% by year end of 2021 and saw another 15.7% increase just in the first half of 2022. (That equates to an astonishing 37%+ increase in cost of multifamily construction since 2020, which mirrors our observed increase in loss costs at Millers.) Costs of both materials and labor are driving these increases. Any insured who has recently considered or undergone capital construction projects should be quite familiar with these increased costs of construction.
  • The Joint Center for Housing Studies of Harvard University reported the YOY percentage increase in rent was 16.2% in the end of 2021. Insureds who stayed in step with the greater rental market should be able to absorb this increase in limits without seriously eroding their margins in order to continue providing adequate protection of their financial investment.

At Millers, we pride ourselves in understanding the intricacies of multifamily housing and being the carrier of choice for multifamily housing risks in our operating states. We will continue to provide the best possible coverage and services for our customers during these challenging times.

We wrote a helpful article explaining the reasons behind adjusting building values due to inflation, and how it is meant to protect our customers. You can access it here.

Should you have questions or concerns about this notice, please contact Joe Begyn, VP of Underwriting, at jbegyn@millersinsurance.com.

Sincerely,

Millers Mutual

Blog Posts for Agents

5 Strategies for Agents to Overcome Challenges of the Hard Insurance Market

Pressure to produce. Long hours. Difficult conversations. Hard insurance markets present many challenges for insurance agents. Historically, a hard market is part of the cyclical nature of the insurance industry. However, the last significant hard market occurred in 2001, making these uncharted waters for many insurance agents.

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Rising Property and Casualty Reinsurance Costs to Impact Customers

The current dynamics of the reinsurance market have led to reinsurers pushing for further price increases. In AM Best’s Market Segment Report, “Market Segment Outlook: Global Reinsurance,” AM Best states that the current market hardening will likely need to continue for at least a couple of years to have a meaningful impact on the segment. Additionally, pricing momentum will have to be sufficient to offset losses from previous years’ events.



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Why Adjust Building Value For Inflation?

The price of everything has skyrocketed since 2020, making record inflation the news of the day. Between rising material costs and supply chain issues, building or renovating anything is a challenge right now. Many property owners have put off renovation and construction projects. But what if you had to rebuild?

READ MORE

Social Media

Posts at Your Fingertips

We know how much time it takes to curate useful content to populate your social media feeds, so we’ve created posts you can easily copy and paste. Help yourself to our library of social media posts designed to be shared on your agency’s platforms. Simply download a graphic and copy the accompanying text provided. Or feel free to use text of your own with our premade graphics. Happy posting!

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Inflation presents many challenges for customers, including the increase in insurance costs. And because the last significant hard market was in 2001, it’s an unfamiliar territory for many. Our agents are skilled and ready to tackle the uncharted waters of inflation for you and your business today by working with Millers Mutual.

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Your property insurance policy should help cover repair, replacement, and rebuilding costs when a covered event results in damages or loss. But during a time when inflation has prices for goods and services rising by staggering margins, how can you be sure your policy gives you adequate coverage? Now would be a great time to review your policy limits with your insurance agent.

Apartment Building - Understand the Hard Insurance Market

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Hard insurance markets present many challenges for customers, but agents with a deep understanding of the market and close carrier relationships are best suited to help navigate insureds through the process.

Want more? Visit our Social Media Library for our full collection.

Visit the Social Media Library

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