2022 was a year where many experienced increases to insurance premiums for both personal and commercial policies. Social inflation, a continued rise in building replacement costs, and a return more normal auto mileage were large factors in the rise to insurance costs. As we enter the new year, what can we expect to see in 2023?
The past year brought natural disasters that caused widespread destruction to many areas of the state and the country. This means that insurance companies paid out more in claims. New vehicles and vehicle parts have been harder to come by and more expensive which means that auto insurance rates also adjusted for higher losses and values. Continued social and economic inflation, supply chain disruptions, employment challenges, and global uncertainty all will contribute to a further rise in insurance costs for 2023. Cyber threats will continue to impact businesses and cyber liability insurance options should strongly be considered if not already in place.
This may sound bleak, but this forecast only reiterates the importance of working with a team of insurance advisors and professionals that can help you and your business navigate the challenges ahead. We can’t deny that these challenges exist, but instead we need to be proactive on how best to understand any vulnerabilities and to provide options for protection and maximization of profitability for each business. There will be more underwriting scrutiny in 2023 as insurance carriers try to maintain their own financial stability. There are risk management solutions that can not only help you make you more appealing to insurance providers but also help your business minimize risk and control costs.