During a recent interview, AAIS VP of Products John Kadous discussed the current trends affecting insurance companies and offered some advice for insurers moving forward into 2023.
"Inflation is on everyone's mind whether it's an insurance company or any other business, or in our personal lines, but on the insurance side it can have a profound impact with property values going up," shared Kadous. "But, more pertinent to insurance carriers is what is happening with rebuilding costs, materials cost, and all of those are going up rapidly...and that is going to put some real pressure on companies if they don't stay ahead on rate."
He also explained that supply chain issues are going to impact anybody, but inland marine is one area where this issues hit hard. "As delivery slows down, it will definitely have an impact on the market," said Kadous. "Sometimes, when the deliveries slow down there is spoilage, and an impact on the goods that are being transported, creating additional losses for insurers."
"Mergers and acquisitions, the activity going on there is smaller companies being moved into groups, being picked up by larger carriers, and some of the challenges that come from that is creating a consistent look and feel for a product or an experience, and there are challenges there...and the advice we give folks is get it where you want it, get it to a point where you utilize a consistent program across all your products -- it's easier for you, and for your agents."
Kadous went on to also offer some advice for insurers moving forward, which included when dealing with inflation to understand where you are from a rating perspective, look at your own loss cost multipliers, and find out what you need to do to stay ahead.
To view the full interview from John Kadous, please click the video above.