Consortiums May Help Education Institutions Navigate the Hardening Insurance Market

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In a number of sectors, a hardening insurance market continues to be a major issue. This rings especially true in education, as there are several issues creating a negative impact on schools. 

As rates continued to increase in 2019 and 2020 for most lines of business, many carriers have started limiting coverage for abuse and traumatic brain injury. Others have exited the education market altogether. 

Along with factors affecting the market under normal circumstances, COVID-19 and the uncertainty surrounding it has left a number of institutions asking the question “what’s next?”


Issues Affecting Market

According to the Commercial Property/Casualty Market Report for 2020 Q1 from The Council of Insurance Agents & Brokers (CIAB), all major lines of insurance, aside from Workers’ Compensation, experienced moderate to significant premium increases in Q1 of 2020.

Commercial Property & Umbrella policies experienced the most significant increases with 12% and 17.3% increases, respectively. Many large property accounts are experiencing rate increases averaging more than 20%. 

The hardening insurance market couldn’t have come at a worse time, as the COVID-19 pandemic will surely effect admissions and overall financial strength. In addition to admissions, the return of room and board as a result of the pandemic further complicates many institutions’ financial situation.


Consortiums May Be an Option

For schools struggling to find appropriate coverage, a consortium can be a great option to find the best possible coverage at the right price. 

A consortium offers negotiation leverage, reduced rates and improved coverage while finding the best possible carriers by leveraging the collective buying power of a group of schools. 

Long term premium stability is also a benefit of consortiums, as the leverage of the group can help to mitigate the impact of a hard market as well as the impact of a large claim at a single institution. 
A consortium can also provide collaborative educational initiatives for institutions such as benchmarking, risk management roundtables, and educational conferences and webinars. 

These benefits may make consortiums a very attractive option for schools navigating through this uncertain point in time.

Other Recommendations

As the insurance market continues to harden, advance planning and strategic marketing of accounts is a must. Complacency must be avoided at all costs. Your broker needs to take every opportunity to “resell” you to the underwriters and highlight factors that can lead to better rates. 

Factors of this “resell” can include long term claim history, a summary of capital improvements that improve the property ratings and information related to risk management initiatives (driving training, safety training, property inspections, return to work programs, etc.) on campus that reduce the risk of future claims. 


Questions?

As market conditions continue to be turbulent, the RCM&D Education Practice will continue to be here for you. Talk to your trusted advisor today for more on your best options in the hardened market.
 

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