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Commercial brokers face pressure to add value amid soft pricing
Insurance Business reports catastrophe property pricing has decelerated faster than in the past 31 years, intensifying discount competition.
Commercial insurance pricing is softening and capacity is expanding, forcing brokers to rethink how they pursue additional quotes, according to Insurance Business. The outlet describes a growing tension between finding a cheaper deal and securing a placement that is truly better, not just lower-priced.
Arrowhead Intermediaries CEO Stephen Boyd said brokers feel constant pressure because “every account they have is under attack” when the market turns. Boyd pointed to catastrophe property as particularly notable, saying the current price movement is one of the most aggressive decelerations he has seen in 31 years after years of sharp increases.
Insurance Business also highlighted how established insurers with long claims track records are being challenged by newer capacity willing to underprice incumbents by substantial margins. Boyd contrasted the stability of markets that have decades of experience and hurricane experience with scenarios where a less proven entrant undercuts pricing.
Patrick Sullivan, CEO of Union Bay Risk Advisors, said conversations with carriers increasingly center on price and the ability to negotiate rather than requiring brokers to constantly re-shop accounts. He described an approach where clients can bring back better pricing to be revisited, while also warning that shopping indefinitely does not necessarily improve outcomes, given tools now available to support remarketing.
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