Insurance
Home›Insurance›Industry & Deals›Mutual insurers look to expand commercial lines to red…
Mutual insurers look to expand commercial lines to reduce concentration risk
The Mutual Group CEO said mutuals are seeking faster growth in commercial products than personal lines, citing catastrophe risk that can hit any state.
Small US mutual insurers are targeting faster growth in commercial lines as they try to reduce risk from concentrated books of business, Insurance Business reports. The shift is expected to add more carrier capacity for commercial accounts placed through independent agents, a dominant distribution route among mutuals by company count.
The Mutual Group CEO Tom Troy said concentration of risk is a top concern, noting that catastrophes are not limited to coastal areas and can occur in any state. He linked the push to a broader effort by locally focused carriers to diversify while maintaining community ties.
According to the outlet, the diversification effort is especially relevant for mutuals with roots in personal lines or farm insurance, where policies historically combined commercial exposures with homes and vehicles on the same property. Troy said many mutuals are seeking a stronger balance between personal and commercial business, with some expecting commercial products to grow at a quicker pace.
Insurance Business also noted that expanding product offerings brings execution costs, including expenses to develop and launch new coverage and complications from legacy systems that can affect implementation and pricing. The Mutual Group said carriers are weighing the pace of technology investment needed to support customers and distribution partners without letting modernization costs run unchecked into premiums.