Analysts and trade publications are noting how loss cost for MA insurers (and across the country) continue to increase, especially for auto insurers. This is a familiar tale:
- Inflation happens.
- Insureds have losses.
- The cost to repair damaged vehicles/property increases i.e. labor and parts are more expensive.
- Carriers increase rates to offset, but it takes a while for rates to flow through to earned premium.
- Profits and prosperity are elusive for all parties.
- Re-insurers put pressure on carriers to decrease/limit exposures.
- Carriers begin to decline new business risks.
No doubt you are seeing more declines or rejections when quoting in SinglePoint. We are getting a lot of calls, emails, and Live Chats from agents. They ask, “hey we can’t get a rate for this driver with a really good driving record…makes no sense!”
It often seems counter intuitive that a carrier does not want you to sell a new policy for a very good risk. But this is the world we are living in right now. Experts are saying things are trending in the right direction and companies will return to profitability in 2024.
In the meantime, SinglePoint will display what the carrier returns during the real-time rate service. (Click here to learn more about how real-time rates work.) We have spoken to and/or met with many carriers to discuss this increase in the number of declines for new business. They empathize with you agents but want you to stay optimistic that this will be a temporary road bump. They also tell us that some risks may be quoted but only after the carrier performs additional underwriting. They suggest agents contact their underwriters or marketing managers to discuss each specific risk.
IMPORTANT: What are customers doing in response to all this uncertainty and increasing costs?
Customers do what they always do: they look for value. So you can expect drivers will be shopping for better rates and coverages. They will be whittling their policies down to what they absolutely need. They will eliminate extra protections and higher limits. They will be more likely to ignore brand names (though solid brands may be reassuring to some customers in volatile market). This may sound a little scary, but a marketplace that is adjusting usually means there is a lot of opportunity out there. Be bold and seize it!
The trend has gotten worse this Spring and Summer
It’s true: more carriers have lost their appetite for new risks. You are likely seeing more declines (or even errors) in SinglePoint. There are a few things to keep in mind:
- The decline and the explanation for it comes directly from the carrier. As part of the Real-Time Rating call, SinglePoint simply displays whatever data (i.e. premium, coverages, declines, messages, etc) carriers send to us.
- There can be various reasons for the decline including a very specific factor related to the risk (e.g. age of roof) and thus we strongly encourage you to discuss each risk with your underwriter.
- Continue to comparatively quote in SinglePoint as it is often difficult to know which risks will be declined. And in many cases, you can bridge the quote over to the carrier portal for underwriting review.
Experts note how this hard market will likely pass as carriers adjust rates and the economy stabilizes.
- If you get an unusual message or decline from a carrier, please let us know about it. We like to track these and make sure all of us are aware of any latest changes.