May 2024 Volume 6

OPERATIONS & MANAGEMENT

Insights into Property & Casualty Insurance Trends: Navigating the Landscape in the Forging Industry By Katie Hensley, AIC

Source: CIAB Market Index Report

When an insurance market turns “hard,” the result is the buyer is put in a worse position to protect their company. The insurers increase rates along with deductibles and decrease coverages. However, there is one other position an insurer takes in a hard market and that is pulling out of offering insurance to a specific industry segment. This is true for forges, as more insurance companies are limiting insur ance coverages for your industry segment. For 2024, our metals team at Cottingham & Butler is seeing insur ance companies who were long-standing insurers for forges drop ping or significantly limiting insurance coverage for their operations. Some members of the Forging Industry Association may have already experienced getting the dreaded “non-renewal notice” letter. In the last year, more than one national insurance company decided to non renew the majority of the forges they were insuring leaving many of those forges without options because their agent/broker was ill equipped to find an alternative. The reasons these insurers are pulling out is multi-faceted but they all revolve around money. Each carrier buys re-insurance and the amount of re-insurance available in the market is less for certain clas

sifications of property. Some insurers were hit by claims over the past several years and simply decided they couldn’t charge enough premium to stay competitive and make a profit. We can go round and round on an insurer’s position but once upper management makes the decision, there’s little you can do except find another insurance company. So, what can you do? First, get out ahead of your renewal. Start your renewal process six months to nine months in advance of the expiration date. Second, talk to your broker and ask them the following questions: 1. How does my current insurance company and underwriter view my risk profile? 2. Will they be offering a renewal this year? Do you have that in writing? 3. If they non-renew my insurance, then what insurance compa nies are my back-up markets? 4. Are those admitted insurance carriers or are they in the excess and surplus lines market?

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