Insurance Market Insights from Alliant Private Client Leaders

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The insurance market continues to evolve, making it a fitting time to address the challenges our clients may be facing. Over the years, we have found knowledge is the best way to help clients navigate uncertainty. As such, two of our senior leadership team members have come together to share their perspectives and insights on the current state of the market and what the future may bring.

Challenges in the current market

What worries you the most right now?

Cindy Zobian, EVP, Managing Director: While the challenging market was once contained to homeowner’s insurance, auto insurance and liability, rates are now also affected. We know this has all been very difficult for our clients. It’s understandably frustrating to see rates rise and hear about carriers leaving states. Mostly, I am always thinking about ways we can guide our clients through this market as seamlessly as possible.

Alliant’s response to the market challenges

So, how is Alliant meeting the moment?

CZ: We’ve gotten more creative, taking an even more holistic view of our insurance programs. We’re helping clients use deductibles and co-insurance to offset the hesitance in the market; high deductibles are more attractive to insurance carriers. We’re also getting multiple carriers to share the risk, minimizing the burden of any individual carrier.

The role of self-insurance

There’s more talk about self-insurance these days. What do you think about this option?

Mark Recht, SVP:  Some clients are inquiring about this option, in which they will take on the financial risk of a possible loss instead of purchasing insurance from a carrier. We are always happy to discuss this as an approach as part of the broader risk management strategy and sometimes it is the right choice. However, ultimately most people choose to have some insurance protection because it can be difficult to reenter the insurance market once you’ve opted out.

CZ: Yes, we are always going to walk clients through the good and the bad of self-insurance; in the end, we want them to be able to make the decision that is best for them.

The future of the insurance market

Do you see any bright spots in today’s market?

CZ: We know that insurance is not the most exciting topic however, the market conditions are providing us the opportunity to have more frequent and substantive conversations with clients to develop customized programs that meet their unique needs. Clients want to understand their insurance program better, so they are better equipped to make strategic choices. And that’s a win for everyone because it leads to better overall risk management.

MR: We continue to collaborate with wealth advisors and other professionals to discuss risk management because they want to ensure that their clients have risk management programs that best meet their lifestyle and unique set of needs.

Understanding the complexities of the insurance market

Which aspect of the market is most difficult for clients to understand?

MR: The market challenges are not just impacting specific regions anymore. The current situation started in 2018 in California, after the wildfires, and then impacted Florida because of the storms. This impact is now being felt nationally, if not globally. That said, clients outside of catastrophic-prone areas are now feeling the impact of these weather-related events like ice storms, flooding, and tornadoes. Conversely, those who reside in catastrophic-prone areas do have the additional concern of carriers leaving the state, in part because some state regulations don’t allow carriers to set mutually beneficial rates.

Looking ahead: The future of the insurance market

What does the future look like?

MR: We’re optimistic. As more reinsurance capital becomes available and insurance carriers continue to seek innovative solutions, we are finding creative ways to tackle the challenges.                

CZ: Yes, we’re going to continue to learn and evolve. Almost every day, we find additional ways to offset these challenges.

As Cindy and Mark shared, now more than ever, the proper insurance strategy is essential, both for property protection and wealth management purposes. As you review your goals and priorities, please don’t hesitate to reach out to your insurance advisor for guidance on your portfolio.

Topics Market Update

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