December 23, 2020 by David Gambrill
Rowan Saunders, President, CEO, Economical Insurance
COVID-19 has had a profound impact on our lives and the industry, changing perceptions of our industry as well as customer and regulatory expectations. A solid and stable insurer that brings speed to market, convenience, and reliability is needed to deliver the new insurance experience.
The past year has unleashed so much uncertainty. We must evolve quickly and have increasingly important discussions to create greater clarity between acceptable and uninsurable risks. P&C insurers play a critical role in providing outstanding customer service with excellent insurance fundamentals.
Before the pandemic, the industry was experiencing a period of escalating insurance costs in combination with flattening investment returns, resulting in hard market conditions. For several reasons, we expect the market to remain hard for the next 12 to 24 months.
First, underlying inflationary trends continue to escalate. Vehicles and properties are more expensive to repair, litigation is lengthy and costly, and medical costs are increasing.
Second, weather events continue to increase in frequency and severity.
Third, worsening economic conditions positively correlates with increases in fraud.
Fourth, sustained lower investment yields require a greater focus on underwriting results.
Fifth, reinsurance capacity and rates are hardening due to escalating natural catastrophes and pandemic liabilities.
Looking into the future, we will continue to be resilient and implement solutions to better manage changes that COVID-19 might bring regarding cyber risk, industry consolidation, and rate adequacy.
For the past several years, Economical Insurance has focused its investments in innovation to fill gaps in the market with Sonnet, our digital direct channel, and Vyne, our modernized broker offering. We’ve strengthened our core insurance operations and act on meaningful trends that improve and transform broker and customer experience.