Call: 203-637-6655 or email – Kyle Shepard

How the Covid Virus will impact Prospective Costs

While insurance companies adjust to the Corona Virus, and refund auto insurance premiums for vehicles sitting idle during quarantine, a bigger dynamic is already in the works.

“All publicly traded insurers have watched their stock price drop”

All publicly traded insurers have watched their stock price drop from as little as 15% to as much as 40%. That pull back in equity price has a direct reflection on an insurer’s capacity to issue insurance policies, and then an insurer’s appetite to underwrite.

The capacity challenge will affect properties:

  • coastal or proximate to water
  • in flood zones
  • in excess of 1,000 feet from a hydrant, or 3 miles from a fire station
  • located in wildfire zones

We, as agents have already witnessed withdrawals of insurer’s from high risk areas and limitations on availability of coverage. Unfortunately, over the next 2-4 years this will put pressure on premiums for those at risk properties.

The lone type of insurer that should be unaffected by the pull back in the equity market is a Mutual insurer, or reciprocal, where the company is essentially owned by the insureds and not the stockholder. Our best guestimate is that over the next 2-4 years, capacity and then the resulting premium structure will be more stable with coverage with this type of company.

If you have questions about your insurance premiums over the next 2-4 years give Kyle a call at 203.698.9342 or kshepard@shepardinsgrp.com.


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