The State of the Dealership Insurance Industry 2020
Remember the lyrics of the old Bob Dylan song… “for the times, they are a changin’”…
That is certainly true today as it has been a most unusual year for all of us! Everything in our world seems to have changed… including the insurance industry. All of which affect our bank accounts and profit margins.
Our post-COVID-19 insurance world includes substantial increases in Property (which includes Inventory), Liability, Umbrella/Excess (which follows Liability), Employment Practice Liability, Directors and Officers Liability, and Cyber.
This encompasses almost every area of Dealership insurance… and, we can expect those coverage lines not mentioned, like Workers Compensation, to follow the upward trend shortly. The reasons are rooted in litigation and instability. Our (insurance) market does not like either of these trends and reacts with increased premiums and a dwindling of capacity in the Reinsurance market.
It’s not terribly difficult to understand… Property markets were already askew and moving upward… litigation trends are exploding with billboards touting Plaintiff successes dotting the landscape… and, now, massive layoffs with the Pandemic.
It is truly an unusual time to be a business owner.
Because insurance is a huge part of your budget, it’s vital to understand the industry trends before the renewal premium arrives on your desk. Prepare by understanding your Loss Ratio and keeping track of insurance industry trends with a subscription to some of the Industry Journals. Consult with your Risk Management Team to ensure your organization has claims under control and can keep premiums in check by moving deductibles upward. It’s all about preparation and understanding.
Remember Dylan… “the times they are a changing!”
We would like to take this opportunity to join us for a special webinar on July 22nd, 2020 that will dive into what you should expect this year at renewals. Sign Up for the State of the Dealership Insurance Market Webinar today.
Steven P. Gibson
President of Dealer Risk Services
Program Manager of Dealer Management Group
