If you missed last week’s RIMS (the risk management society®) conference in Atlanta, Georgia, or maybe just missed some sessions, here are a few of our team’s top takeaways from the sessions they attended:
A hard market is here to stay (for a while)
Often, when we experience an increase in the frequency and severity of natural disasters, we see a hard insurance market. In a hard insurance market, coverage is more difficult to attain and premiums are generally higher than normal. Industry analysts and thought leaders at RIMS 2023 believe the hard insurance market is here to stay, possibly for a decade or more.
Accurate data and valuations are critical for accurate insurance placement
In a hard insurance market, data and valuations become even more critical. Organizations which provide comprehensive building information, COPE data, CAT data, and third-party valuations are often looked upon more favorably by insurers. This is because insurers are able to get a much more complete, accurate, and trustworthy picture of the risk profile they’re insuring.
Parametric insurance is gaining popularity
Parametric insurance, which pays out a predetermined amount of money based on the occurrence of specific events with defined parameters, is becoming more popular. As an example of how it works, consider the occurrence of a windstorm; if the wind reaches a certain speed, that may trigger a payout of parametric insurance. A main reason parametric insurance is gaining in popularity because the payout can be particularly fast, addressing coverage gaps, and flexibility.
“Double, double, half” defines the current state of the insurance market
This is a new one to us but it’s catchy! We heard double, double, half mentioned a few times at RIMS 2023 and here’s what it represents: an insurance market that’s experiencing double the rate of claims, double the retention or amount of risk the insured is willing to self-insure, and half the capacity or amount of risk insurance companies are willing to assume. Talk about a hard market!
One percent (1%) of operational expense should go toward insurance
How much is your organization spending on insurance? Based on what we heard at RIMS 2023, a reasonable benchmark might be about 1% of your operational expense. We’d caution organizations to not feel too compelled to meet this benchmark though as it can actually vary greatly based on risk exposures and appetite for risk.
Share the knowledge
There you have it…a few takeaways from RIMS 2023. Have something that should be added? Email us at communications@centurisk.com and we can put it on the list to share with others!
Want to see how Centurisk’s AMP Property Risk Management software can help keep you prepared for tomorrow’s big risk challenges? Contact us for a demo.