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Property & Casualty Market Outlook for 2019-2020

UPDATE:  This market outlook provided our reaction to market trends and some pricing expectations.  With Q3 and Q4 of 2019 now behind us, we thought it would be beneficial to share an update with new insights and observations to better prepare our clients for current pricing pressures and provide guidance for managing the net impact.  Read our Property & Casualty Market Update (January 2020) here.

At Scott Insurance, our clients often ask us to predict how their property & casualty insurance costs will change year-over-year. While each company has their own unique characteristics that affect pricing, we can make some general market observations to help clients prepare for the future.

Looking back, 2017 brought near-record highs in U.S. catastrophe losses due to the hurricane trifecta of Harvey, Irma and Maria. While 2018 saw a reduction in these losses (down to $37 billion versus $53 billion*), hurricane Michael and historic wildfires in California made it the second highest loss year since 2011. Despite two near-record-setting catastrophe loss years, carriers are posting lower combined ratios due to a combination of diligent underwriting discipline, moderate price increases, favorable loss development and higher interest rates.  Continue reading

Addressing the Exposures of the Low-Income Housing Tax Credit

A topic of continual discussion with our Affordable Housing clients is the Low-Income Housing Tax Credit (LIHTC).  This critical tool is fundamental to success in the industry, but as it is currently administered, it creates significant exposures that must be addressed – both with proper insurance coverage and also with appropriate lobbying efforts to hopefully foster future change to alleviate some of the risk.

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Managing Cash Flow in Construction

“We were always focused on our profit and loss statement. But cash flow was not a regularly discussed topic. It was as if we were driving along, watching only the speedometer, when in fact we were running out of gas.”  – Michael Dell, Founder & CEO of Dell Technologies

It takes a broad skill-set to run a successful construction business and navigate the significant risks inherent in the industry.  Not only do you need to know the ins and outs of construction, you must also be skilled at business management and finance.  From executing contracts to understanding the bid process to managing resources, not the least of which is cash. The quote above from Michael Dell about cash flow is very timely and applicable for contractors.  A large surety company recently listed its “Top 10 Reasons Contractors are at Risk of Failing,” with Insufficient Cash Flow as #4 on the list.  Cash flow issues have historically been at the top of similar lists of construction industry risks.  The ability to quickly access cash is the universal resource to fix just about any issue that arises.

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Five Lies About Multitasking While Driving

Many drivers are convinced that it is okay to multitask while driving, but crash statistics and studies on distracted driving indicate it is not safe.  The National Safety Council estimates that cell phone use alone accounts for at least 25% of crashes.  It is estimated that at a typical daylight moment, about 416,000 passenger vehicle drivers are using handheld cell phones while driving. 

April is Distracted Driving Awareness Month, and in this blog post we debunk five lies concerning multitasking while driving that many drivers believe as truth:

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Reference-Based Pricing: Employer Considerations

There is a lot of noise in the marketplace regarding referenced-based pricing (RBP) as a viable payment model for employer-sponsored health plans.  RBP is a payment model that does not utilize a network of providers, but rather bases reimbursement for claims on a percentage of Medicare, which serves as the “reference” point. The advantage of RBP to an employer is clear as most employers see savings ranging from 20% – 40%.  The RBP model can be applied across the board, or just for inpatient and outpatient facility charges.   Continue reading