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11:43 AM
Nathan Golia
Nathan Golia
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Not Everyone is Happy with Hardening P&C Market

Higher premiums are needed after a big year for losses, but consumers are going to push back.

Property insurance rates have been falling for some time, but according to Marsh, this quarter could mark the beginning of a turnaround.

Several outlets report that following the very active catastrophe year, nearly half of the property insurance policies renewed in Q4 did so with a 1% or more premium increase. This follows Marsh numbers from the third quarter that showed rate declines stopped, according to Reuters.

But if Netflix has taught us nothing, it's that companies are notoriously clunky in terms of explaining the rationale for price increases when they have to implement them. In Fort Lauderdale, Fla., Sun-Sentinel blogger Julie Patel asked: "Why are Florida insurance premiums rising despite six hurricane-free years?" noting that "The federal government declared more than 85 major disasters this year, surpassing the previous annual record of 81 in 2010. None were in Florida."

The I.I.I. told Patel, "Insurers know the cycle won’t last and that the costs associated with a hurricane’s long tail require building up the reserves to pay those damages." Let's hope the industry is better at communicating this point to customers in every state than Netflix was in explaining its need to address higher streaming rights fees.

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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