No surprise to anyone, the pandemic, civil unrest, economic uncertainty and an abundance of disastrous weather events influenced losses of over $1 billion in 2020, accelerating an already hardening insurance marketplace – one that is less friendly to insurance buyers. You can expect double digit increases at renewal – but your hands aren’t tied. In this article, CBIZ Insurance Services provides a 2021 Trends Alert and suggests how you can manage your risk profile to achieve your lowest cost of risk.

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E
ach year, property owners approach their insurance
brokers with a common question – are my insurance
premiums going up? No surprise to anyone, the
pandemic, civil unrest, economic uncertainty and an
abundance of disastrous weather events influenced
losses of over $1 billion in 2020, accelerating an
already hardening insurance marketplace – one that is
less friendly to insurance buyers. Reinsurance is more
expensive, capacity is decreasing with many providers
exiting the market, underwriters have become stricter
and premiums are on the rise for all insurance lines.
The Council of Insurance Agents & Brokers (CIAB) Q1
2021 Commercial Property/Casualty Market Index
reports that premiums continued to rise across all-sized
accounts. The average increase in premium prices
was 10% in Q1 2021, the 14th consecutive quarter of
increased prices. Large accounts were most impacted,
with an average increase of 12.9%.
By mid-year you may be tired of hearing that “especially
this year,” business owners who educate themselves
on the trends that influence their insurance will have a
greater understanding of what can be done to influence
their insurance rates. But as renewals approach, it’s still
solid advice, and there are also some fairly standard
practices that will help you achieve your lowest total cost
of risk.
Ensure Your Risk Profile and Data Are Accurate
A careful assessment of unique exposures and
establishing effective, well-documented risk management
practices can make an organization more attractive to
insurance carriers. A robust risk management program
reduces the likelihood of expensive claims and minimizes
unexpected event losses.
Another important consideration is the quality of your
data. Property insurance underwriters want a complete
ManagingInsuranceCoverages
&Costs–YourHandsAren’tTied!
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CBIZ Manufacturing
& Distribution

2. (Continued from page 1)
and accurate picture of the property they’re insuring.
Properly representing your risk (and risk management
policies) to the carrier will directly affect the rates and
terms offered.
The condition of the property and surrounding
neighborhood, age, deferred maintenance, environmental
issues, ingress/egress issues, vacancies and other
factors specific to an industry sector all impact
underwriting (and property tax assessments, by the way).
Review and confirm key statistics like square footage,
statement of value (SOV) and construction occupancy
protection exposure (COPE) data. If you are more than
five years out from your last appraisal and you continue
to use Consumer Price Index (CPI) adjustments on your
SOV, you risk misstating real property value. Adjustments
for CPI do not take into account local changes, such as
increased climate activity, economic/social changes
that cause building costs to increase/decrease, and
exhaustion of local resources that escalate the cost of
obtaining raw material.
By simply cleaning up your key information elements and
presenting accurate appraised values, you’ll help better
position your organization for the best possible coverage
rates and terms.
2021 Trends Alert
Insurance experts often examine how outside influences
and trends affect the insurance marketplace, and
businesses should follow suit to determine what factors
impact their insurance coverage. For 2021, there are a
number of sweeping market developments to consider.
Rates continue to be affected by “social inflation” (i.e.,
the impact of societal trends and views toward increased
litigation, broader contract interpretations, plaintiff-
friendly legal decisions and larger jury awards).
Extreme weather events, such as hurricanes, tornadoes,
hailstorms and wildfires continue to make headlines as
they become increasingly devastating and costly. Many
experts believe severe storms, extreme temperatures,
wildfires and flooding are the new norm. As these
catastrophes become more frequent, the insurance
industry will need to create innovative solutions to keep
up with weather-related losses. Expect to see more
emphasis around weather readiness, especially from an
insurer’s perspective.
Social movements that have risen to prominence in the
last decade and throughout 2020 are expected to affect
organizations for years to come. Nationwide protests,
civil unrest regarding racial equality and diversity within
the workforce, the #MeToo movement and the Asian
American and Pacific Islander heritage movement all
continue the trend of increased corporate accountability
in regard to social issues. For insurers, this raises the risk
of employment-related claims, alleging discrimination,
harassment or other forms of unfair treatment.
Policyholders who take the necessary actions to avoid
such claims by documenting workplace inclusivity,
diversity and social awareness initiatives may reap the
benefits of reduced premiums.
And of course, in 2020 and into 2021, COVID-19 has
led to many complications in the insurance market –
additional exposures across practically every line of
coverage, elevated underwriting losses and various
policy restriction developments. Although the vaccine
offers hope for eventual return to normalcy, many of the
pandemic’s ramifications are expected to continue for
years to come.
(Continued on page 3)
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3. (Continued from page 2) 2021 Market Outlook Forecast by Line of Coverage
Below is a high-level overview of 2021 forecasted rate
trends per line of coverage. For detailed insights by line
of coverage, access CBIZ’s 2021 Property & Casualty
Market Outlook.
Additional Resources
■ What’s Next Podcast Episode 15: How COVID-19
Affects Future Enterprise Risk Planning
■ What’s Next Podcast Episode 12: The Rising Cost
of Insurance & Insurable Values
■ Strive To Be the Risk Profile the Underwriters
Want to See (article)
■ Six Steps to Minimize Business Interruptions
(article)
■ Revisiting Your Plan for the Unexpected (article)
■ Cybersecurity Quick Assessment (2-minute
online test of your cyber threat readiness)
Your Team
You need more than basic commercial insurance to
protect your business assets. That is why our risk
consultants partner with you to develop a plan tailored
to cover your particular exposures. If you have questions
about your risk profile or your current coverage, contact
the CBIZ Insurance Services Manufacturing Team or your
CBIZ advisor.
Line of Coverage Forecast Trends*
Commercial Property
■ Non-CAT exposed: +5% to +20%
■ CAT exposed: +10% to +25%
■ CAT exposed with poor loss history: +25% to +40%
General Liability ■ Overall: +5% to +15%
Commercial Auto ■ Overall: +5% to +25%
Workers’ Compensation ■ Overall: Flat to +5%
Cyber Liability ■ Overall: +10% to +30%
Directors & Officers Liability
■ Public entities: +20% to +70% or more
■ Private/non-profit entities: +10% to +50%
Employment Practices Liability ■ Overall: +10% to +30%
Excess & Umbrella Liability
■ High risk: +50% or more
■ Low to moderate risk: +30% or more
*
Price forecasts are based on industry reports for individual lines of insurance. Forecasts are subject to change and are not a
guarantee of premium rates. Insurance premiums are determined by a multitude of factors and differ per organization. These
forecasts should be viewed as general information and not insurance or legal advice.
Underwriter scrutiny is at an all-time high. Every aspect
of policyholders’ risk profiles is being closely reviewed.
In fact, some underwriters are altogether refusing to
consider businesses with elevated COVID-19 exposures.
While deductible and premium costs are rising, capacity
has decreased with more stringent coverage conditions
and policy exclusions emerging for pandemic-related
losses.
Overall, COVID-19 has significantly tested the
preparedness of businesses everywhere. Moving
forward, it is critical to take a hard look at business
continuity and disaster response plans. Also, partner with
experts who understand your industry’s daily risks and
can help you prepare for the unexpected.
Cyber attacks are now in the urgent risk category
across all industries and the attack range is growing.
Cybercriminals are using an ever-evolving and
sophisticated array of tactics, targeting employees at all
levels of and roles at an organization to gain access to
your data. The manufacturing and distribution sectors
have continued to implement highly sophisticated
technology solutions to manage both process and
logistics. While these solutions offer critical benefits,
they also present new vulnerabilities to cyberattacks.
Underwriters have taken note. Mitigation should involve
both cyber risk management and insurance coverage.
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